openDemocracyUK

'Freeing' local councils from government grants would wind the clock back a century

Something sinister lurks below the coalition's announcement that they are going to 'free' a number of local authorities to operate independently of government grant by 2015. It sounds like winding the clock back to the 'free' London councils over the early 20th century.
Stuart Weir
25 February 2011

Something sinister lurks below the coalition government's proud announcement that they are going to 'free' a number of local authorities to operate independently of government grant by 2015, allowing them to retain the bulk of their revenue from local business rates and other council tax revenue.  What this presages is that rich councils will become richer and poor councils poorer, even though we are promised 'an element of redistribution between wealthier and poorer councils’.

At the moment, something like 300 councils receive subsidies from the national pool of business rates that central government collects from local authorities and then redistributes, while about 80 larger and wealthier authorities put resources in. The whole business of sharing out central government and business rates resources between local authorities is a political football, obscured by complex formulae, but the reality is that governments of course reward their local authorities and penalise the others.

The government's new initiative sounds like winding the clock back to the early years of the 20th century before the newly elected Labour council in Poplar rebelled in 1919 against the existing rating system of 'free' councils in London, arguing that it was wrong that the poor in their deprived east London borough were obliged 'to keep the poor'.  The Poplar councillors campaigned for more equal distribution of rates income across the London County Council area, their Poor Law Guardians paid generous outdoor relief and ultimately refused to pay the central levy of rates to the LCC.  Thirty Poplar councillors were jailed in 1921 for defying the District Auditor and the courts.

They were denounced as Bolsheviks and their own party was embarrassed by their defiance.  For years the word 'Poplarism' was defined in the Shorter Oxford English Dictionary as 'the policy of giving out-relief on a generous or extravagant scale . . . which lays a heavy burden on the ratepayers.'  Later the definition was modified to read 'generous or (as some alleged) extravagant outdoor relief. . . .' But by then policies and ideas that were denounced at the time as extremist were becoming the stuff of enlightened policy thinking.  Many of their arguments for change were to become part of the welfare state - child allowances, out of work benefits, rates equalisation, and so on - though the 'household means test' which the councillors fought hardest against survived right through the 1930s.

We need similar principled defiance allied to vision now, against the way this government is set to undermine public services and the NHS by the wholesale adoption of competition policies designed to undercut public and universalist provision by privileging private sector providers.  Unfortunately, whatever Ed Miliband’s good intentions may be, his Labour Party seems to be as inhibited as it was in the 1920s and 1930s by the damaging desire to be politically respectable. Their opponents talk the talk - 'freeing' rich local authorities, creating a 'big society' - while they bury the poor in miseries and squeeze middle-income families. Too many young people I talk to are in despair, and many older people too. Those of us who wish for a genuinely participatory democracy and social justice must offer them honest and uplifting alternative actions and policies in which they can play a part.

 

Who's getting rich from COVID-19?

Boris Johnson's government stands accused of 'COVID cronyism', after handing out staggering sums of money to controversial private firms to fight COVID-19. Often the terms of these deals are kept secret, with no value-for-money checks or penalties for repeated failures which cost lives. And many major contracts have gone directly to key Tory donors and allies – without competition.

As COVID rates across the country surge, how can we hold our leaders accountable? Meet the lawyers, journalists and politicians leading the charge in our free live discussion on Thursday 1 October at 5pm UK time.

Hear from:

Dawn Butler Labour MP for Brent Central and member of the House of Commons Committee on Science and Technology

Peter Geoghegan Investigations editor, openDemocracy, and author of 'Democracy for Sale: Dark Money and Dirty Politics'

Jolyon Maugham Barrister and founder of the Good Law Project.

Peter Smith Procurement expert and author of 'Bad Buying: How Organisations Waste Billions through Failures, Frauds and F*ck-ups'

Chair: Mary Fitzgerald Editor-in-chief of openDemocracy

Who is bankrolling Britain's democracy? Which groups shape the stories we see in the press; which voices are silenced, and why? Sign up here to find out.

Comments

We encourage anyone to comment, please consult the oD commenting guidelines if you have any questions.
Audio available Bookmark Check Language Close Comments Download Facebook Link Email Newsletter Newsletter Play Print Share Twitter Youtube Search Instagram WhatsApp yourData