“There is likely to be at least a 10 per cent budget squeeze [in local government] from next year, possibly more if the Conservatives win the next general election”, reports the Financial Times (11 November).
Since much that local councils do is a matter of legal obligations, with their costs largely fixed beyond each council’s control, ten per cent is a huge squeeze.
It comes from probable cuts by the New Labour government in the local government “settlement” for April 2010 (tax money redistributed from central government to local government); from reductions in local income, from fees and charges, already suffered by councils; and from losses by some councils in the collapse of the Icelandic banks.
Share prices have been going up since March. Bankers’ bonuses will be fat again this Christmas. There is talk of the economic crisis being over.
But, for working-class people rather than bosses and bankers, the worst of the crisis is yet to come.
The Tories say that if they win the general election — as they probably will — they plan cuts that within three months will make them the most unpopular government in Britain since World War Two.
New Labour plans cuts, too, starting with local government.
The cuts in services are sure to bring more cuts in jobs, and more contracting-out, and will spill over into further job cuts outside local government, in suppliers, contractors, etc.
All these cuts come from a drive to offset the huge borrowings made by central government in order to bail out the banks. Their urgency comes not from the government having exhausted its ability to borrow, but from the desire to keep the British government’s standing good in the international financial markets where it borrows.
The issue is what gets priority — the revenues of bosses and bankers, or the services and jobs on which working-class people depend.
Local labour-movement campaigns against cuts already exist in some areas, usually where gung-ho councils have tried to make an early start on the cuts. They have won some victories.
For the avalanche of cuts coming over the next months, we need a whole network of labour-movement campaigns against the cuts, pulling the local government workers’ unions into action alongside them, and fighting for a workers’ plan in response to the crisis and for a workers’ government as the political answer.