George Osborne’s austerity gutted local councils to shrink the state – don’t forget

Tories would rather people die on the street than pursue social justice

 

It is now clear that the austerity programme of former chancellor George Osborne failed even its own terms as a means of returning the UK’s budget to surplus.

What is often forgotten, though, is that Osborne’s austerity approach was modelled on a now largely forgotten (and failed) experiment by the Canadian government in the 1990s.

This experiment loaded public spending cuts on to its local government for political reasons to deflect blame from central government for painful local decisions.

Unsurprisingly then, local authorities in the UK saw some of the largest proportional cuts in their spending during Osborne’s stewardship of the economy. And this is continuing. A Financial Times analysis summarises:

“…council spending over the past five years has revealed that local government services are creaking under the weight of growing demand as local authority budgets have been cut by £18bn in real terms since 2010 — with at least another £9.5bn expected by the end of the decade.

This is equivalent to a fifth of spending by England’s 300-plus local authorities, whose budget for running services, from social care to road sweeping, has been reduced at twice the rate of cuts to UK public spending as a whole.”

These cuts to local services continue unabated despite a de facto admission that austerity hasn’t worked and that the most vulnerable people are bearing the brunt of cuts.

Harrowing decisions are having to be made by Birmingham City Council, for example, which has just announced that services to homeless people and for domestic violence will lose £10 million over the next two years just days after a rough sleeper died of cold in the city centre.

Birmingham has already made £800 million of savings because of loss of central government funding and has halved its staff to 12,500.

The effects of years of local government cuts were described by Birmingham City Council chief executive Mark Rogers in a recent interview with the Guardian.

Only the ‘super-deprived’ were now being supported with ongoing cuts deadly serious for many vulnerable people. He said that:

“We are fast reaching the point where there could be catastrophic consequences for some people…

Deficit reduction enabled first the coalition and then the straight Tory government to pursue a straight Tory objective of a smaller state.”

So there we have it. Under the guise of saving the UK from a non-existent bankruptcy, the Tory-led governments of the last six years have piled cuts onto local services with local councils taking the flak.

Meanwhile, Osborne’s failed austerity experiment has doubled the national debt while vulnerable people pay the price.

The UK, one of the richest but most unequal economies in the industrialised world, could have made different choices – to apply a wealth tax, not to reduce the higher rate of income tax, to let council tax rise based on a more realistic assessment of property value banding.

But the government would rather that those with little or nothing die on the street or languish in bed and breakfast hotels, while local services for the old and young alike wither on the vine.

Kevin Gulliver is Director of Birmingham-based research charity the Human City Institute, writing in a personal capacity. Follow him on Twitter @kevingulliver

See: As Shelter marked its 50th birthday a rough sleeper died of cold in Birmingham

Like this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.

7 Responses to “George Osborne’s austerity gutted local councils to shrink the state – don’t forget”

  1. Craig Mackay

    It is quite extraordinary that the vast majority of economists now accept that the austerity discipline so popular throughout the world for a number of years has been an abject failure, yet the British government goes on cutting and cutting and cutting. They simply cannot see that the state of the British economy and particularly of the poor is so dire because of their policies of austerity. No doubt today’s reduction in unemployment and increase in mean wages will be used by the government as proof that their economics are working.
    The view that national economics are the same as home economics and that debt has to be paid off because all debt is bad is fundamentally wrong. You can only run an economy when you have a significant amount of debt so that banks can lend and organisations including public organisations can borrow and invest for the future. This view is now widely agreed but the British government simply hasn’t noticed that that is the case.

  2. NHSGP

    30% of state spending goes on debts. Hence austerity

    12,000 bn total debts.

    Nothing like ignoring the big debts eh!

  3. Michael WALKER

    >Craig Mackay
    “The view that national economics are the same as home economics and that debt has to be paid off because all debt is bad is fundamentally wrong. ”

    The Government have paid off NO debts. They keep borrowing more.

    Your line of argument is reinforcing Tory economic policy..

    Well what do you want? 10% unemployment, large benefits and an economic collapse?

  4. Craig Mackay

    I wouldn’t want NHSGP or Michael Walker to be confused by the actual numbers, but here they are. As of Q1 2015, national debt stood at £1.56 trillion. The interest on that is approximately £43 billion or 3% of GDP. If you want to understand how national economies work then you need to read around the subject. I would recommend an excellent and readable book “The Joy of Tax” by Richard Murphy which explains these matters in a very straightforward way.
    The only way to grow an economy is to invest in it. That investment is then used to fund activities which will produce more benefit than the debt repayments cost. If you can fund these investments then nothing will happen and unemployment will keep on rising as jobs are lost. It is austerity that is increasing unemployment, increasing the benefit bill and has led to a remarkable economic collapse in the UK.
    If it was such a good idea to pay off debt at all costs is it true that Tory MPs are frantically trying to pay off their mortgages they have on their own properties? Of course not. They understand that inexpensive loans (and the government gets them particularly cheaply) properly invested will grow by much more than the cost of the loan.

  5. Craig Mackay

    Above comment: “If you can fund these investments then nothing will happen and unemployment will keep on rising as jobs are lost.” Should have read “If you cannot fund these investments then nothing will happen and unemployment will keep on rising as jobs are lost.”

  6. Martyn

    The title of this article isn’t really quite right. You don’t “shrink” the state by reducing budgets – the state is a mechanism for organising and using power. by controlling the money available and channelling it in specific directions, the state exerts more power. what is happening is that the government is exercising greater power over some sections of society! and some parts of the state such as local government! and by franchising/ using private corporations to undertake the functions originally undertaken by parts of the state, they are integrating the state and big business – this form of corporatism was one of the hallmarks of Italian fascism – so not shrinking the state, but extending.

  7. Mike Stallard

    “Birmingham has already made £800 million of savings because of loss of central government funding and has halved its staff to 12,500.”
    Says it all really.

Leave a Reply