London borough grants slashed
Outrage not enough to beat Brent Cuts
By Mark Findlay and Pete Firmin
The government has rightly been under pressure to increase the grant to communities where coalfields have closed resulting in increased poverty. However, they have done so at the expense of some of the poorest boroughs in London.
One of the biggest problems is that 80% of local authority income is from central government grants (the rest being mainly Council Tax). The government has said it has no intention of reintroducing local business rates which might begin to shift this.
Instead it is sticking by the Tory system of crude Standard Spending Assessments (SSAs), while making it clear that it does not trust local authorities with decision-making, and is taking as much as possible away from them.
Brent Council in North West London is faced with cuts of £17.4 million in its 1999-2000 budget if the final grant allocation from central government, to be announced on February 4, is the same as the provisional figure.
This despite the fact that as well as a Labour government, Brent has a Labour Council, 3 Labour MPs, and the MEP for the area is also Labour.
Grants scrapped
There are several causes of this crisis. In its wisdom, the government has decided that while the proportion of ethnic minority children under a council will continue to warrant extra grants for education, they have cut it completely for children’s personal social services. This is despite all the evidence that language, health and other factors contribute to increased spending.
This cut particularly hits some London boroughs (and areas like Leicester), with Brent, Hackney, Lambeth, Haringey and Newham accounting for £30million of the £40 million cut from London grants for this reason. Brent alone is losing £8.3million, a 30% drop.
Other problems stem from the fact that when the Tories controlled Brent council (until a Labour-Lib Dem coalition took over in 1996) their prime concern was to keep down spending, sell off council assets and keep the Council Tax as low as possible. Apart from appalling services, one result of this is that Brent has spends well below the government’s Standard Spending Assessment, supposedly what the government considers it necessary for a council to spend to provide services.
However, the government is proposing a new scheme whereby Council Tax Benefit subsidy is clawed back from authorities which increase their Council Tax by 4.5% or more than their cash increase in Standard Spending Assessment, whichever is higher.
Penalised
This penalises any low-spending council which attempts to bring its spending up closer to the SSA, but not high-spending councils which don’t increase their Council Tax by much. In addition, the level of clawback grows with the proportion of people on Council Tax benefit, which penalises councils like Brent with high levels of poverty.
Meanwhile, Prescott, the minister in overall charge of this shambles, has said that he is abolishing the "universal and crude" capping of Council’s spending used by the Tories. This is to be replaced by a totally arbitrary decision to be taken after a budget has been set, with no guidelines.
Despite being the 20th most deprived local authority in England and 13th in London on the government’s own figures, Brent’s SSA for this year increases by just 1.35%, as against 4.4% for London as a whole, 4.84% for England and 8.5% for an affluent borough like Bromley in south London.
Unlike some other authorities, Brent cannot cushion the cuts by using up its reserves. A major result of the Tories years is that Brent only has about £3 million in reserves, unlike neighbouring Westminster which has £55million.
On January 21 a large and angry meeting was held to protest against the proposed £17 million cut in Brent’s government grant. Over 200 people crammed into Willesden Library to hear representatives from the Brent Law Centre and council leader Paul Daisley. Jamie Ritchie from Brent Community Law Centre gave a graphic account of how the new cuts will come on top of years of low spending from the Tories, resulting in already appalling services.
A desperate housing shortage results from council home sales and the reduction in housing on estates like Chalk Hill and Stonebridge. Ritchie said we should call the cut in children’s personal social services grant what it is, a racist cut.
Paul Daisley, leader of Brent council, spoke next and naturally defended the Labour council’s record (to howls of rage from the audience!). He described how the Tory council ran the reserves run down, charged high rents and sold some £95m worth of assets. Their general expenditure was below even the mean spending limits set by Tory governments. However he did outline the devastating effect that the further cuts would bring. He also stated that the main gainers were, incredibly, the wealthy Tory strongholds of Westminster, Kensington and Chelsea, and Wandsworth, although there has been a general shift of expenditure to the North and Scotland. To roars of disapproval, he (and his deputy) stated their absolute intention to set a legal budget.
Speakers from the floor raised the possible cuts to come – hitting the library service, youth service, mental health and more. Pete Firmin from Socialist Outlook called for a march to Whitehall, and unity with the other affected boroughs.
There was a large and militant pensioners contingent at the meeting, as well as numerous trade unionists and users’ groups.
The meeting overwhelmingly agreed a motion put by the Law Centre condemning the government’s cut and calling for a rethink and agreed there should be a demonstration to Whitehall.
Brent’s Labour councillors have made it clear they cannot defend what "their" government is doing to them.
"Fall-back"
They have been protesting and lobbying ministers, putting forward a ‘fall back position’ which would mean that the money is cut in stages rather than all at once. They have even called on all three MPs not to support the grant settlement if it comes to a vote in parliament, which has caused a stir because one, Paul Boateng is a minister.
However they are beginning to put cuts through committees in preparation for the budget-setting meeting. Plans include closing libraries, cutting home helps, making 300-500 staff redundancies, and making substantial reductions in grants to the voluntary sector.
There have already been sizeable lobbies of committees discussing cuts, and the Trades Council and Law Centre have called a lobby of parliament on Monday 1 February and a demonstration has been called for Saturday 6 February. An anti-cuts committee is being set up to co-ordinate the activities.
Between now and 8 March when the council sets its budget for the year the demand has to be for the councillors to refuse to pass on the government’s cuts – and if the council officers or a commissioner step in to do so, then the councillors should lead the fight against the cuts.
Maximum support has to be built for the workers and users of the services to prevent any cuts going through, including strike action by council workers and occupation by users of facilities being closed.