Why our communities are paying the price for George Osborne’s failure

Communities discovered this week that once again their local council – and the services it provides – are to be hardest hit by the Coalition government’s latest cuts. Let’s be straight; it is because of the Chancellor’s economic failure nationally that we will be seeing further, deeper cuts locally, and it is families and businesses in local communities that will pay the price for George Osborne and David Cameron’s mistakes nationally on growth and the deficit.

On top of the 33% reduction in government grant that councils have already been told they’d have to face in this parliament, local government learnt this week that there will now be an additional 10% cut in 2015/16. It is the largest reduction in any part of the public sector, even though local government is more efficient than Whitehall.

The Labour Leader on the LGA, and LGA Vice-Chair, Cllr David Sparks said:

“People will wake up in two or three years’ time and in many cases their local council will not be there as they know it.”

 Sir Merrick Cockell, the Conservative Leader of the Local Government Association, echoed this concern:

“Services on which people rely will have to be significantly reduced as a result… some services will be wound down entirely.” He warned his Tory colleagues in central government that “some councils will simply not have enough money to meet all their statutory responsibilities”.

 All this means that local authority leaders will now have to make unenviable choices between keeping streetlights on and libraries open, maintaining roads and Sure Start centres, and supporting schools. The way the Government is devolving the biggest cuts and the toughest decisions to councils is running away from its responsibilities.

And the way it is doing it is fundamentally unfair. On Wednesday, the Chancellor had the nerve to say:

“It is not possible to reduce a deficit of this size without asking all sections of the population to play their parts – but those with the broadest shoulders should bear the greatest burden.”

This will raise a hollow laugh in the most deprived communities and councils which have already been hardest hit by the cuts. One statistic tells the story; between 2010/11 and 2014/15 the ten most deprived local authorities in England will lose six times the amount in spending per head of population compared to the ten least deprived local authorities.

The Prime Minister says “we’re all in this together”, and yet in this financial year councils in some of the most deprived parts of the country like Burnley and Hastings are facing the maximum cut of 8.8% in spending power per head, while his own local authority of West Oxfordshire – one of the least deprived areas is the country – is actually getting an increase of 3.1%.

It doesn’t have to be this way. Instead of planning 10% cuts to local government, two years ahead, the Government should be boosting growth now. If they took action, there would be more money around and council services would not face such deep cuts. Boosting growth and living standards this year and next year would bring in more tax revenues and reduce the scale of the cuts to local government in 2015.

But they haven’t done that. Nor have they done anything on housing. After all the hype, the Government has announced no new investment in affordable home building for this year or next year despite the advice of the IMF. And as for Michael Heseltine’s radical recommendations to devolve funding to local areas, what was actually announced was a damp squib

Labour would act now to boost growth so that future cuts would not be so deep, and we would build homes. But if David Cameron and George Osborne fail to act, we will have to deal with a difficult inheritance in 2015. Ed Miliband and Ed Balls have said these spending totals for 2015/16 will have to be our starting point, but we will make different choices.

For example, we would not be paying for new free schools in areas where there are enough school places, while parents in other areas struggle to get their children into a local school. And there is no justification for the way in which the coalition has imposed the biggest reductions in local government grant on the poorest and most deprived communities. A Labour Government would ensure that the funding that is available is distributed much more fairly.

But even more importantly, we are going to change the way we do things in government. Ed Miliband announced at Labour’s National Policy Forum last weekend that he has asked Sir Richard Leese, Leader of Manchester council, Sharon Taylor, Leader of Stevenage council and Jules Pipe, Mayor of Hackney to lead a new Task Force to advise us on how we can make a difference even when there is less money around.

The case for bringing central and local government funding together – building on Total Place and community budgets – to get the best outcome in terms of services is now overwhelming. In many respects, the current system has reached the limit of its capacity to cope with less funding without radical change. Too much power in England is still wielded in Westminster, and change must involve moving away from the past when central government told local government what to do, to letting local government get on with it.

Hilary Benn MP is Shadow Secretary of State for Communities and Local Government.