The need for a 'Needs Budget'

Mural to celebrate the Poplar rate rebels who used the powers of local government to stand up to a Conservative and Liberal coalition government in the aftermath of the First World War

Guest blog by William Quick, a Green Party member in Bristol. This posting was orginally published on his blog A Green Trade Unionist - In Bristol

I’ve just been selected by the Bristol Green Party to be their candidate for Bedminster in next May’s Council elections.  I’m really excited and want to thank all our local members who voted for me; we came second to Labour in Bedminster by only 3% this year and we have a really good chance of getting atleast one of the two seat in the ward.  I intend to do a longer post on my priorities for the ward, but for now I thought I’d dwell on something that came up in the hustings, my opposition to any and all cuts budgets and the need for a ‘needs budget’.

As you should know the Green Party completely opposes Austerity as a failed economic model, that has held back the economy, and punished the poor and most vulnerable in our society whilst forcing ordinary people to pay for the bailout of the banks.

Nationally our MP has been fantastic in continually voting against cuts and austerity and has one of the best voting records of any Left wing MP.

However, on the local level, the limited options available to resist the imposition of cuts has seen Green Councillors – most famously in Green controlled Brighton – adopt a ‘dented shield’ approach to try and minimise the worst excesses of local cuts and vote for cuts budgets (so they can amend and tinker with them).

The amount of money in the budget is imposed on local authorities by central government and its austerity agenda.  To set a legal budget within those confines means passing on cuts.

The alternative is setting a ‘needs budget’.  Disregarding the limit set by Whitehall this would set a budget adequate to cover provision for all the services local people need (hence a ‘needs budget’).  Such actions have been made illegal under section 114 of the Local Government Finance Act 1988 which then obligates the councils financial officer to alert Whitehall as to what’s happened.  After that the council would have 21 days to set a legal budget or supposedly civil servants from central government would depose the council and set a cuts budget themselves.  

That being the case many feel they have no option but to pass cuts budgets that have minimised the threat to vital services as much as possible.

However, to me, and many others, this seems a very improbable course of events.  This is a government with a wafer thin majority, and deposing the democratically elected council of one of the largest cities in the UK would be a deeply unpopular move.  The drama would dominate the news and could be a spark that ignites the disparate movements we’ve seen trying to resist austerity these last 5 years.

Should it even get so far as civil servants being sent into the city, they would be met with large scale protests and no doubt a strike from local government workers who would then refuse to help them carry out their dirty work (and many civil servants are PCS members who would be unlikely to cross a picket).  With all that going on, the likelihood of the worst case scenario (the deposition of the council) happening seems very low.

Instead they’d no doubt try and reach a compromise, in which we’d be able to win a better deal for Bristol.

One way this might work has already been laid out by our Mayoral candidate Tony Dyer.  The Conservatives have said councils can keep their business rates (probably from 2020).  Tony has challenged the government to give Bristol its business rates from 2016, which would allow us to reverse the cuts and invest in the many many infrastructural projects Bristol urgently needs (chiefly social and affordable housing).  If we set a needs budget and demanded we be given our business rates early to pay for it, it seems likely central government would, to some extent, give in.

It’s not as far fetched as some might have you believe.  Remember despite the apparent dire state of the nations finances, in the last budget the Conservatives magicked up £12 billion in extra defence spending (the exact same amount they’re cutting from welfare, coincidently), and another £10 million for a private jet for the PM (among many other things).  Last year they found money for an 11% pay rise for every MP, and £15 billion for Osborne’s ‘Road Revolution’.  In short, they’re very good at finding extra money when they need it.  And in the kind of constitutional crisis they’d provoke by trying to depose Bristol Council, they’d no doubt decided they’d need the money.

Furthermore, councils have already had their budgets cut by so much that there simply isn’t that much more they can cut before statutory services start to fail.  The so called ‘low hanging fruits’ of council expenditure have already been picked.  If councils continue to live within the dictates of the law and refuse to try and set ‘needs budgets’, at some point in the next 5 years we’re going to see a significant failure of the basic services many people depend on.

The main argument against ‘needs budgets’ is that civil servants aren’t going to know our communities needs and their cuts will be far worse than the more compassionate cuts our Council will do itself.

As I’ve said this seems unlikely, and if it got to the point where implementing cuts will result in the failure of services how can civil servant driven cuts be any worse?  Also it would focus the blame for these cuts squarely back where it belongs with central government, and would make the Tories do their dirty work themselves.

We’ve already seen massive mobilisations against the government and its austerity program since the election. If unelected civil servants started deposing local authorities to implicate savage cuts; the protests, strikes and civil disobedience it would cause would be a significant challenge to the government.  

If several councils refused to set cuts budgets at the same time, their likelihood of success would be even higher.  The blowback from them attempting to depose multiple authorities at once could likely bring down the government (so they’d probably give in).  For that to happen we need people elected onto those councils making those arguments and willing to make a stand against austerity. 

If elected I will be one of those people.  I pledge to never vote for a budget containing cuts, and to consistently make the case for the alternative whenever possible.

Butt's bleak Brent budget forecast for 2014/15 and beyond

In a presentation to the Labour Party's Brent Forum at the weekend, current leader Council leader Muhammed Butt, warned members of a looming budgetary crisis in 2014/15. There was an expected 11.8% cut (£19.3m).

Even worse, there would be 7% annual cuts until 2020 threatening the future of local government as we know it.

In 2014 the Council would have to bring forward difficult decisions that they had not expected to have to make until 2015/16. He promised 'more and better consultations' and put forward the idea of a 'community budget - giving residents the choice of which servces to protect' over a 6-9 month consultation period 'using innovative methods to reach more residents'.

This of course falls far short of a 'needs budget' that would be used as a campaigning tool against the Coalition cuts and benefit changes, uniting the Council with voluntary organisations, community groups, trades unions and residents.

The Brent Fightback slogan 'Enough is Enough' seems justified by Butt's bleak view of the future in the sldie entitled 'What Future for Local Government?'

• •Growing demand for social care services
• •By 2020 – ‘non statutory’ spend will be reduced from 2/3rd to 10% of total budget
• •This means: no youth centres, no parks maintenance, no street cleaning, no employment support, no arts funding & no voluntary sector support

The options he then gives, in the absence of any widespread national campaign against the cuts and in defence of local government,  do not measure up to the enormity of the challenge.

•National 

• •Increased funding from central government
• •Allow us more freedom over tax and revenue
• •Remove Statutory Obligations 

•Local

• •Integration with partners – voluntary sector, businesses, NHS, police
• •Greater involvement of local residents in the design & implementation of services

•

Butt on the rack says "We want to go back to what Labour stands for"

Speaking at an open meeting of Brent Trades Union Council yesterday evening, Brent Council leader Muhammed Butt admitted that some of the decisions the  council had made could have been made more wisely and that things could have been done differently. He said that he wants to take residents' views into account more in the future and that desire had caused some 'push back', which had culminated in the argument with Gareth Daniel.

He said that he wanted to take a detailed look at the council's budget, "How we provide services and why, reviewing every service."  He said that all directly employed council workers would receive the London Living Wage from October 1st  and that the council would be writing to schools to urge them to pay the LLW. He would be meeting with the London Living Wage Foundation to find ways of ensuring all the council's suppliers were London Living Wage compliant. He said that given the current difficult times the council had to do something positive to put money in people's pockets.

Other initiatives were to look at tenancies and how the council could improve standards without increasing rents, extend collective  energy procurement to include residents as well as council buildings and schools, and find ways of strengthening voluntary organisations such as the Credit Union, Private Tenants Group and the Law Centre.

He said, "We want to go back to what Labour stands for and why we are here."

In the discussion Butt was urged to recognise that the Labour Party was much more than just a council, it was part of the labour movement, and thus should be a campaigning  organisation against the capitalist system. He was asked how he was planning to organise a fightback alongside trades unions and the community.

Butt responded, "Me being here is just a start. I am willing to go anywhere, whether to a warm reception or a hostile one, to have a dialogue."

 He said that the Labour Group had appointed a new local organiser who would help get their message across and have a dialogue to move things forward, "We are starting campaigning and need to raise awareness. We want to make that change and if we don't our residents will suffer."

Asked about the budget process and council tax increases and urged to construct a needs budget as a campaigning tool,  he said that with the changes in the consultation system (The Area Consultation Forums have been replaced by Brent Connects) with a member/officer Any Questions type panel there would be more of a dialogue. Council Tax rises of 2.5% and 3.5% had been factored into budget planning but the council were waiting to see what other London councils were doing. The government's announcement of the settlement had been delayed until December but the council wanted an  indication before then. The council were also lobbying the government over the additional 60,000-70,000 extra residents indicated by the latest census which could be worth an additional £4m . This could negate the need for a rise in council tax because the council would only get 65% of the money raised by an increase He indicated that because of the delays the statutory consultation may run out of time.  He invited people to feed specific suggestions and questions into the budget making process.

When others present pursued the issue of making a needs based budget (ie deficit budget)  Cllr Butt said they were looking at campaigning  against the cuts. However, "We can oppose the cuts but budgets have to be set. We wouldn't be doing anyone any favours if the commissioners came in. They would keep only statutory services such as schools and adult social care. We would lose Sports Centres for example. We would land ourselves in more problems by taking that route. Instead we will have a dialogue which may mean working with other London boroughs. If you are asking us to take a lead, we will take a lead."

Outlining the sums the council needed to run services he said that government funding to Brent  was now £152m, was £192m, and by 2016 would be £110m.  Schools and Adult Social Care took £140m of this. The council needed £250m to run services so this total had to be made up from Council Tax and fees and charges.

Another speaker told Butt that a needs budget could not be set in the Town Hall, the council need to go out to voluntary organisations, trades unions and community groups - that was real democracy. He claimed that Labour had "forgotten what democracy looks like". In the absence of a fightback all sorts of rightwing nastiness and racism could arise.

Another speaker returned to the issue asking, "Are you considering a needs budget. It is a good propaganda tool showing what is needed and where the gaps are. Are you considering this or just administering cuts? We can't wait for the next Labour government. We need concrete exmaples of how you are going to fight."

Butt said that he was not ruling out a needs budget which would "show how much we have lost and how much we need". . Muhammed's new political advisor  he would be lobbying the Labour Party over how much cash needs to be put back into local government after the disproportionate cuts it had suffered.

On the issue of Willesden Green Library, raised by three members of the audience, Cllr Butt  said that he had met with Keep Willesden Green campaigners and had passed on their concerns to Galliford Try, planners and the Regeneration Team, and their points will be taken into consideration for the new plans being presented in December.. He said that the old Willesen Library was now being retained and this meant internal redesigns. The council were still looking at 92 private units at the back of the site and this was the only way to fund it.

He was challenged with  the alternative of a small amount of building and refurbishment and the loss of the cinema,  bookshop and car park in the current plans.   The questioner said, "It's like saying I need a new boiler so I will knock my house down! I've heard it called asset stripping."  Butt responded that a lot of the 'stuff' in the 80s building had come to the end of its natural life and the building was unfinished. The cafe and cinema  had closed as a result of not being used. "We need a mini Civic Centre in Willesden so people from this area don't have to travel all the way to Wembley and we need it an no cost to us."

On the plight of the disabled he said that he took the point about how they were being hit and that he was looking at helping them through the Council Tax Support Scheme: "If we have to lobby the government we will do so."

In answer to another questioner about the council's ambivalent attitude to free schools and academies and a possible forced academy in the borough, Butt said that they were a last resort to address the shortage of school places. He said that for free schools the council had set out criteria for partners that would keep the essential principles in terms of admissions, ethos and teachers conditions of service. He was urged to consider federation of schools and extending schools as an alternative.

Asked about the Counihan family, Muhammed Butt said that it was a difficult case. Brent had 18,000 families on the waiting list and only 900 properties available. The council hoped to provide 1,700 affordable properties by 2014. He said the only way  to tackle the problem was through regeneration and Section 106 funds  and the council needed to find developer partners. The situation would be exacerbated by the new Right to Buy scheme which would take out larger properties.

Clr Butt concluded by saying that the council had been rubbished by the press and had to admit it had got its messages wrong: "We need to get better, even if it means starting from scratch."

Pete Firm, chair of Brent TUC said that he felt the council were rolling over in front of developers. Labour seemed to be assuming it was going to win the next election, However, it should not be a matter of voting Labour because the alternatives were worse but Labour putting forward policies that people would be enthusiastic about.