How can councils fight cuts?… Salford, Preston or Liverpool?
Since 2010, local council budgets have been cut by more than a quarter. The results have been devastating for many local communities. Libraries have closed. Youth services have been decimated. Thousands of jobs have been destroyed. But in many parts of the country, those implementing this brutal austerity wear red rosettes. Labour councils have dutifully carried out cuts across Britain, and have participated in the selling off of vital services.
Now, with Johnson’s government enjoying a substantial parliamentary majority, fresh cuts are on the agenda. This is the context in which a number of figures in Labour local government have made noises about councillors opposing further cuts. Some have even put forward so-called ‘alternative models’, supposedly designed to mitigate the effects of Tory austerity. In this feature, we examine the realities of some of these supposed alternatives and point towards the ‘Liverpool Road’ – the approach taken by the Militant-led Liverpool City Council, which won more than £60 million in extra funding for the city from Margaret Thatcher. STEVE NORTH looks at the model advocated by the self-proclaimed ‘Corbyn Council’ in Salford, BECCI HEAGNEY examines the Preston Model, which has received some attention and JACK YARLETT responds to a recent statement by the mayor of Liverpool Joe Anderson, and looks back at the city’s tremendous history of struggle.
It is to be welcomed that some Labour council leaders now seem to be talking about opposition to Tory cuts that have blighted communities for the past decade. Salford City Council is ahead of the curve in this regard.
Since the election of Corbyn supporter Paul Dennett as Mayor in 2015, Salford has made attempts to reduce the impact of cuts on its citizens. Nonetheless, to this point, the council has not set a “no cuts” budget, but has engaged in work with trade unions and community groups to keep cuts to a ‘minimum’ – they have found ways, such as using reserves, to avoid closing services and cutting jobs in most cases. The most significant step taken was in 2018, when the mayor and his council colleagues abandoned plans to close five threatened council-run day nurseries and instead campaigned with trade unions, parents, carers and the wider community to fight for the requisite resources to keep them open. Words were turned into deeds, which saw over 1,000 people march in support of the joint campaign, of which the council were part. Chants that would previously have been directed towards the council, were instead directed towards the government.
This showed the huge potential that there would have been to mobilise mass support if the council had been prepared to go even further, and to take this approach not just on the nursery closures but on all of the services which are under threat because of central government cuts. It shows in particular the effect that a mass campaign for extra funding could have in mobilising the workers and service users, alongside the council, to win extra money from the government.
This is an important aspect of the “no cuts” budget strategy – setting the budget needs to be coupled with a huge struggle to get the funding needed.
That campaign was won and it has had an impact. This year Salford City Council will pass its first “no cuts” budget since 2010. This has been partly achieved through population growth, but also through the use of reserves and the decision to end a 15 year-long joint venture with Capita that has drained money from vital services. Clearly, however, a growing population means that even maintaining funding for services at its current level, while a welcome step, in reality means services facing growing strain and pressure, and being unable to deliver at the same level.
The city still faces millions in cuts from central government, but has pledged not to pass these on to its workforce and those it is elected to represent.
Due to his experiences with the nurseries campaign, Dennett increasingly recognises that he will have to go further to prevent any future cuts going forward. There is genuine discussion with the council workers’ trade unions about what a campaign to support the council in such an endeavour would need to look like, and how to fight for Labour councils elsewhere to refuse to pass on further cuts.
However, in many areas, councils would have to use not only reserves but also borrowing powers in order to stave off cutbacks. Dennett and others have raised the possibility of “pooling reserves” with other councils (for example, neighbouring Manchester city council has well over £300m in its reserves) but this would only be a temporary measure. Especially in the areas hit hardest by the cut to the central government grant, it can also rapidly become necessary to go beyond the legal restrictions on councils setting “balanced budgets”, in order for councils to stop making cuts. The slogan first coined in the Poplar rates rebellion in 1921 – the gains of which this government is attempting to reverse – still applies: it’s better to break the law than break the poor.
Though not implementing a sufficiently fighting strategy, Dennett has moved beyond the crocodile tears being shed by most Labour council leaders. For example, the council has told the public sector union Unison that they will support a drive to secure a pay increase for the city’s social care workers. Dennett attended (and strongly encouraged councillors to attend) a meeting to launch such a campaign.
The other dynamic in Salford is the presence of Salford and Eccles MP and Labour leadership candidate, Rebecca Long-Bailey. Despite initial suspicion from the unions and ourselves when she was first elected, she has taken a refreshing approach on many issues, especially when compared to her predecessor, arch-Blairite Hazel Blears.
Long-Bailey has so far not once refused to side with workers in the city. She was even prepared to do so when it meant being critical of the council before Dennett agreed to back the nurseries campaign.
It is disappointing, however, that up until now Long-Bailey – who Socialist Alternative is critically supporting in her leadership bid – has said very little about the question of local government cuts outside of Salford as part of her campaign. The failure of Labour councils to offer any alternative to a diet of cuts and privatisation, despite Corbyn’s anti-austerity leadership, was surely an important factor in many working-class people feeling skeptical about Labour’s popular manifesto pledges actually being implemented. What’s more, this situation has contributed to the long-term undermining of Labour’s support in many of its working-class ‘heartland areas’ – especially those most devastated by neoliberal policies and deindustrialisation.
Long-Bailey ought to make reversing this approach a central pledge for her leadership campaign, calling on councils to refuse to implement further austerity – instead leading a struggle based on the mass mobilisation of working-class people. Such an approach would not only be a vital step in regaining the trust of communities up and down the country, it would have the potential – especially if taken up widely – to create a huge crisis for the government, and even to bring Johnson’s government to an early end.
Locally, she should advocate that such an approach be spearheaded in Salford, where vital ingredients such as the presence of well-organised trade unions with strong links to wider communities and a base of left activists, particularly around Socialist Alternative, who haven’t been unafraid to challenge the council and Salford’s MPs over their past failures to stand up for the people of the city, already exist. The pressure these forces have generated have impacted on the Labour Party and ultimately the mayor and council themselves. This already provides the basis for some genuine joint campaigning, based on the right to disagree and organise independently where necessary.
We call for the council to use the next 12 months to organise a full democratic discussion among working-class people, trade unions and community campaigners in Salford on the real needs of the city’s residents – using this as the basis for setting a ‘needs’ budget, and mobilising a mass movement behind this that can demand the Tory government pays up.The announcement of the latest budget which for the first time does not include any further direct attacks on jobs and services is a welcome first step in the right direction, but there is still a way to go.
Nonetheless, the fact that Salford has been able to set a budget which includes no further cuts, demonstrates the falsehood of the refrain that has come from so many Labour councillors until this point that there is “nothing we can do”.
However vicious a Tory government, there is no excuse for passing on hardship to working-class people, as the Militant-led Liverpool City council from 1984-87 proved most emphatically (see below).
What is the Preston Model?
The Preston Model of local government has been described in the press and by Corbyn supporters, including John McDonnell, as an “example of Corbynomics” and “guerrilla localism” – a way of tackling continuing Tory austerity.
Preston, a small city in Lancashire, and it’s Labour-controlled council have been the centre of discussion on “alternative models” for local government. The idea is taken from the US approach called “community wealth building”. “Anchor institutions” – things that can’t leave the area such as the council, university, colleges and leisure – are encouraged to spend locally. This means that they put emphasis on tendering contracts to local businesses, rather than national ones.
Supporters of the Preston Model will say it works. Preston was the ‘most improved city’ in Britain in 2018. The six Anchor Institutions increased spending in Preston from £38m in 2013 to £111m in 2017, at the same time as their budgets were being cut.
The council is an accredited Living Wage employer (along with many other councils), has set up a Credit Union and a council-owned energy supplier. This has led to some increase in money being spent in Preston, helping the local economy, and some marginally better options for residents struggling with the big banks and energy companies, although these local initiatives will not be able to compete with national and multi-national cartels. The appearance of the city has also undergone a significant improvement, with a record number of renovation projects taking place in the city centre, most importantly to the bus station and surrounding areas.
The aim is to invest in the local economy, which will in turn create more jobs and attract more businesses, generating more income which can be reinvested. Socialists would of course support the creation of new jobs in the local area. However, attracting more shops and restaurants to the city centre will only create low-paid, zero hours jobs unless it is linked to the trade union campaigns for a higher minimum wage and proper contracts. Meanwhile, the main flagship of this policy, of contracting a local construction company to build the new market, created only five jobs!
Despite the eye-catching slogans of “workers co-operatives” and “democratic economy” that the council use to advertise their approach, just a small scratch beneath the surface reveals that the Preston Model is not as revolutionary as it sounds.
In fact, when you look at the “achievements” on the council’s website, they include: investing the council’s property assets into other property companies in order to receive investment back; selling the bus station (a listed building) to the county council; merger of and cuts to the city’s museum and art gallery; privatisation of community centres and parks to “community groups”; selling of the Old Post Office to a private hotel developer; giving a contract to a private company to build a leisure complex; and using the county council’s pension fund to invest in private housing developments and private student accommodation.
Some of these measures, such as the 2014 privatization of the Guild Hall, which houses a theatre, shops and bars, had a catastrophic effect on the city’s economy. The buyer, multi-millionaire Simon Rigby, ran the Guild Hall into tremendous debt, resulting in the laying off of 20 staff members, without full payment and hundreds of thousands of pounds in ticket sales left uncompensated. Only under community pressure did the council eventually buy it back, while the council’s leader Matthew Brown defended it as being “necessary at the time”.
For bigger contracts, like those to provide school meals for the whole county which local companies couldn’t do, they broke it down into smaller contracts – one for sandwich fillings, one for milk, one for yoghurt etc.
Far from being a model for fighting back against Tory austerity, this is actually exactly how Tories see the role of local government. Similar to the model in the US and other countries, rather than councils being the providers of services, they are tendering bodies. This is a problem not just because generally private companies (whether they are local or national) are based on generating profit, which inevitably leads to “money saving”, by cutting jobs, pay, conditions, training or by introducing costs to services which used to be free, but by outsourcing services, it also makes it less democratic, not more so. Councillors are elected and can be removed from office at the next election, lobbied and petitioned by residents, whereas there is very little democratic accountability over the boards of private companies. Council budgets can be viewed openly on the website and can be voted against – this is not so easily the case with private companies.
This was seen nowhere more clearly than in the Council-led drive to renovate Preston’s central streets over the last five years. While, as mentioned previously, it did improve the appearance of the city, the renovations have since been revealed to have deep design flaws, with misplaced roundabouts, shabby pavements and shallow street curbs leading to a higher instance of accidents and posing a danger to passenger and pedestrian safety. A genuinely democratic council-led initiative, funded with public money from a mass campaign to restore council funding would not have resulted in this.
Leisure centres in Preston have all been sold to Greenwich Leisure Limited, a company based in London which runs leisure centres, sports clubs and libraries across the country, and which Unite members in Greenwich itself have been striking against, over their use of zero-hours contracts, low pay and refusal to recognise trade unions. Privatisation is privatisation, even if the private company is a so-called “not-for-profit” organisation.
The only co-operative that appears to be functioning in Preston at the moment is one called Link Psychology, which offers support to schools for children with Special Educational Needs. It’s impossible to find out where the money comes from and how it is spent for this “not-for-profit” group as there is no public information on it.
At the same time as these initiatives are being taken, the council is still making cuts. “Efficiency savings” to waste collection services, such as introducing charges for garden waste, has led to a reduction to the recycling rate. The council backed the Lancashire Sustainability & Transformation Plan in the NHS which will mean the merger of services and massive cuts to hospitals. The main budget proposal this year is that council tax will increase by 1.99% (after an increase of 2.99% last year), which of course will hit the poorest the hardest.
There are well over 2,000 families on the housing waiting list (in a city with a population of around 145,000), with 198 of them being reportedly in “unsanitary, overcrowded or unsatisfactory” living conditions. On average, 600 houses a year are being built in Preston, 89% of them funded by private companies, with less than a third of them being “affordable” (80% of market rate).
This year, 168 councils will receive no revenue support grant at all from the government. By 2025, local government will have lost the following central government grants: revenue support, adult social care, rural services delivery, public health and education services. All their funding will come from council tax and retained business rates, with a small, and reducing New Homes Bonus – to incentivise private house building – and Better Care Fund – for health and social care services.
The problem with the Preston model, and the approaches being discussed by Salford and Liverpool city councils, is that the starting point is “there is nothing we can do” about the cuts coming from central government. In Preston, it is trying to make the best of a bad situation – by trying to generate as much income locally to compensate for the cuts. However, it is not possible to be able to generate enough to build affordable housing and provide the necessary services, particularly when they are relying on the private sector as this is always more expensive in the long run than running services in-house.
Preston is also a relatively small city, and the council is not responsible for funding many services such as adult social care. It’s hard to see how it can be a model for local councils across the country, which have had a total of £16bn cut from the funding since 2010, if every council were to privatise services to local companies.
Despite these huge limitations to and problems with the Preston Model, it seems to have had an impact within the Labour Party. Not only that, but, coupled with the national policies of Corbyn, it likely contributed to the fact that in the 2017 election Labour got its highest share of the vote since 1997. This is a small glimpse of what is possible – imagine what could be done if councils took a strong anti-cuts position? If Labour went beyond promoting these alternative models and carried out the tried and tested method of mass struggle? By setting a no cuts budget and the mobilising the working class, trade unions and young people in the city, to fight for the money needed to provide services, jobs and decent housing, then Preston could become a true model for the labour movement.
Last week, Joe Anderson, the mayor of Liverpool, announced that he would no longer be passing on any further cuts to the budgets of public services in the city. He claimed that he is prepared to make a stand on this issue even if it means a legal confrontation with the government. Specifically, Anderson vowed that he would not allow any libraries or children’s centres to be shut. Such fighting talk is all well and good, but we will have to wait until we see it to believe it.
In the meantime, this news will come too little too late for many working-class people in Liverpool and across the country who have seen their living standards and public services wrecked by austerity.
Joe Anderson was the leader on Liverpool City Council from 2010-2012, and has been the city’s mayor ever since. The time for making announcements like this was a decade ago, when the Tories first came to power in 2010. Since then, £444 million has been taken out of the city council’s budget.
As a direct consequence of that, along with the introduction of universal credit, cuts to services at a national level and stagnant wages, poverty has skyrocketed. 110,000 children in the city are growing up in poverty, that’s 1 in 3 children in the Liverpool region! In North Liverpool alone in the 2018/19 financial year, 11,236 people were fed by food banks because they could not feed themselves – a 40% increase on the year before. Homelessness has increased sharply, with over 2,000 people in the Knowsley area alone appealing to the local council for housing assistance in 2018/19. Yet it has been Anderson’s council which has led the charge to downplay the issue of homelessness in the city, making absurd claims that there are just a few dozen actual rough sleepers.
The result of Labour-controlled local authorities like Liverpool’s implementing cuts at the behest of the Tories is not just to ruin the lives of thousands of people, it also harms the prospects of bringing down the Tories and preventing further attacks on working-class people in the future. Between the general elections of 2017 and 2019, the Conservative government was one in a permanent state of crisis, teetering and propped up by a deal with the DUP in Northern Ireland. If Corbyn and McDonnell had called for Labour-controlled councils to refuse to implement cuts, if even one or two councils in places like Liverpool had re-discovered their spines, then they could have opened up another front against the embattled Tory prime ministers May and Johnson and brought their tottering governments down.
Instead, the disconnect between Corbyn’s anti-austerity message and working-class people’s own experiences of Labour councils passing horrible cuts to local services was likely one of the factors behind Labour’s failure to oust Johnson in December’s general election.
Of course, the topic of a Labour council in Liverpool refusing to implement a cuts budget invokes the spectre of the Labour right’s old foe, Militant, a predecessor organisation of Socialist Alternative.
However, comparing Anderson to Militant would be insulting to Militant, which led the city’s Labour council from 1983 to 1987 and not only refused to make cuts, but set a needs budget. In that time, the council spent millions in much-needed investment in housing and public services in the city. 5,000 high-quality new houses were built, with front and back gardens, replacing decrepit and decaying slum housing. Seven sports centres, six nurseries and new public parks were opened. Redundancies among council staff were cancelled and thousands of new jobs were created. The council introduced reforms to improve the number of black and asian people employed by the council and local public services. As a result of the mass struggle that the councillors helped lead in support of this stance, more than £60 million worth of additional funding was won for the city from Thatcher’s government. This is the ‘Liverpool Road’, and it is this approach that ought to be adopted now by councillors serious about standing up for working-class people.
Then as now, however, the Labour right cared more about preventing the spread of socialist ideas than they did about getting into power. Neil Kinnock famously stood up at the 1985 Labour party conference to accuse Militant of “hiring taxis to scuttle round the city handing out redundancy notices to its own workers” a total misrepresentation of reality – as not one single council worker was made redundant.
The Labour leadership set about waging a civil war against Militant even as Liverpool became one of the few places where Labour was gaining ground against the Tories in both local and general elections. Labour increased its vote in local elections in Liverpool from 54.000 in 1982, to more than 90,000 in 1984. Terry Fields, a Militant-supporting MP won the Broadgreen seat in 1983, and again in 1987 with an increased majority. Meanwhile Kinnock led Labour to successive general election defeats in both 1987 and 1992, he and the Labour right claimed that by expelling Militant supporters from Labour they were making the party more electable! This topsy-turvy argument is still used by right wingers today against Corbyn, despite Labour winning more votes in 2019 than they did under Blair, Brown and Miliband in 2005, 2010 and 2015 respectively.
Journalist Michael Crick appeared recently in “The Brink” a podcast by the Liverpool Echo dedicated to Militant and attempted to smear the organisation. Such an approach is all-too easy for someone who, like Crick, has built a career as a journalist based partly on writing hit pieces on behalf of the ruling class. But for those of us who are affected by the poverty, exploitation, inequality, bigotry, wars and environmental crises inherent to capitalism, building a determined socialist movement is the only sane option.
The media of the ruling class prefers to only mention Militant when in reference to Liverpool, as a cautionary tale of what happens to people who try to resist the Tories. But Militant’s successes and legacies go beyond the Liverpool City Council struggle.
Arguably its greatest success was in leading the anti-poll tax federation in opposition to Thatcher’s poll tax. “The Fed”, as it was known, promoted non-payment of the hated tax, again in the face of staunch opposition from figures like Neil Kinnock, and organised demonstrations outside the courts where those facing charges for non-payment were on trial as well as demonstrations to protect homes from bailiffs. Militant MP Terry Fields went to jail in 1991 for not paying the poll tax, and it was the Militant-led “Fed” which helped organise the mass demonstration in March 1990. The poll tax was defeated, with around 18 million people breaking the law by refusing to pay it. This was central to bringing to an end Thatcher’s premiership after 11 years in office.
This legacy has much to offer fresh generations entering the struggle at a time of huge turmoil across the world – with mass movements rocking the globe, from Chile, to Hong Kong, to France.
The left candidates in the Labour leadership and deputy leadership races should also embrace this history – advocating a fighting approach for local government, in the model of Liverpool and, before it, Poplar. The much-needed remedy for Labour’s recent election defeat is not a lurch to the right, but the completion of the ‘Corbyn revolution’. In other words, what’s needed is the complete transformation of Labour into a party of campaigns and struggle – based around a clear, socialist programme and on the real democratic participation of workers and the trade unions. Such an approach, were it wholeheartedly adopted, could see Labour not only reverse the losses of 2019 but win deep and lasting support among working-class people the length and breadth of the country.
What we fight for :
- Stop ALL cuts. Labour councils must refuse to pass on further austerity – using reserves and borrowing powers to set no-cuts budgets, and mobilising mass campaigns of working-class people to demand the government provides the funding necessary
- Take the Liverpool road – councils should follow the example of the heroic Liverpool 47, refusing to make cuts, mobilising mass struggle, and setting budgets based on meeting the needs of the population
- For mass council house building. Councils should begin building housing now making use of reserves and borrowing powers, mobilising to fight for funding from the government, on a scale needed to meet the demands of the huge housing crisis that exists, especially in the major cities
- Fight to kick the Tories out. If even one council were to take this road of mass struggle, it would in itself pose a major problem for the government. The more widespread such a struggle, the greater the challenge it would pose. We call for mass struggle to bring down Johnson’s government long before 2020
- Deselect pro-cuts councillors. Those unwilling to take up this fight must stand aside for those who are
- Labour’s leadership must point a way forward. As the only pro-Corbyn candidate in the leadership election, Rebecca Long-Bailey has a duty to outline how anti-austerity policies can be made a reality right now in local government. No more concessions to the Blairite right in the name of so-called unity