Starmer: Covid and government inaction created “perfect storm” for councils

The coronavirus pandemic and government inaction have created the “perfect storm” for local authorities, Keir Starmer will say as he pledges to build a “new relationship between national and local government”.

In an online speech to the Local Government Association this afternoon, the Labour leader is expected to warn of a “black hole of around £10bn” in council finances if central government fails to act.

Starmer will set out plans to give local councils a “much bigger say over investment and services”, and reiterate a commitment to replace the House of Lords with a “democratic second chamber representing the nations and regions”.

Addressing the party’s plans for local government, he will say: “A Labour government would win power in order to hand it back to the nations, regions, cities and towns across our country.

“We would give local government a much bigger say over investment and services, not through plans devised by someone in an office on Whitehall, but ones created and rooted in communities, so that they truly serve the people.

“We would put local government, its power and its innovation, straight at the heart of Westminster by replacing the House of Lords with a democratic second chamber representing the nations and regions of the UK.

“And we would give councillors, communities and people on the front line in our public services a bigger say over the decisions that affect them.

“Because at the heart of the broken trust in national politics and politicians is a feeling that we aren’t listening. But working with you, we want to prove this wrong. And truly empower local communities.

“So, where services people use in their daily lives are no longer a source of convenience but frustration – let’s make them truly accountable to the people they serve.

“And where politics feels distant or remote or like something that is ‘done to’ people rather than ‘with them’ and ‘for them’ – let’s break down those barriers to make sure people have the power to make their voices heard.

“And where government in Westminster imposes decisions and cuts that trample on innovation, put business out of action or damage people’s lives and livelihoods without fully understanding the consequences – let’s offer a vision of a fairer Britain that will be better for everyone.”

Steve Reed told LabourList that despite Boris Johnson claiming that austerity has not been pursued as a policy by this government, it “never went away” and is currently being imposed on local councils.

The Shadow Communities and Local Government Secretary warned: “The government is forcing councils to make cuts of up to 20% in year, in the middle of a global pandemic, just as we slide into what could be the worst recession in 300 years.”

Councils across the UK have come under significant pressure in the pandemic. Of 173 councils who responded to a recent survey, 148 predicted a budget shortfall and at least five have warned they may issue a section 114 notice.

If a council fails to balance the budget, a section 114 notice is issued under the Local Government Act 1998, which prevents any new expenditure and gives a council 21 days to make an alternative budget that fits the criteria.

A budget made after the issue of a section 114 notice would involve significant cuts to existing services. Several local authorities have said that they are weeks away from issuing a section 114 notice.

During the Labour leadership contest, Starmer called for an “end the stifling over-centralisation of power in our politics, in our party and in parliament” and pledged to place local political figures “at Labour’s heart”.

The Labour leader set out five principles that he said would guide his policy in relation to local government. He pledged to:

1. “Devolve power to councils and communities;
2. “Give councillors a bigger voice in our party;
3. “Let councillors lead on campaigning;
4. “Involve councillors and mayors in policy development;
5. “Promote diversity.”