Brighton & Hove Council Budget Crisis

Brighton & Hove Council failed to set a Budget at its meeting last Thursday.

What happens next is extremely important for politics in the City over the next few years. It brings to a head the different political strategies of the main political parties.

Why no Budget?

The budget-setting process is very complicated. But in a nutshell, no party was able to win a majority at the full Council meeting for its proposed Budget as the Greens have 21 councillors, Tories 18 and Labour 14 – ie no one has a majority.

The Tories proposed a Budget based on freezing Council Tax and making cuts to adult social care services, Trade Union facilities, the travellers budget and other areas. Labour proposed less cuts (but disgracefully, still included cutting the travellers budget) and one-year grants to various voluntary organisations that were under threat) coupled with a 1.99% Council Tax rise.

The Greens proposed a Council Tax rise of 4.75% (which requires a Referendum) to avoid making any of the cuts proposed by Labour or the Tories and to keep the voluntary sector organisations budgets permanently in the Budget.

Usually, one party ends up compromising and abstaining to allow proposals from the other parties to go through. Not this time. There is a good blog on the background to what happened here: Rebel Yarns blog on Budget.

What happens now?

The Budget meeting has been recalled – to this Wednesday 5th March. And the war of words has begun as each party jockeys for position.

The background

Let’s recall – the Conservative/LibDem Coalition has made staggering cuts to local government finance (and thus to local democracy). No one envisaged  this level of cuts. So far, councils have lost around 40% of their budget since 2010.  Just imagine what would happen if you lost 40% of your budget !

It is going to get worse – MUCH WORSE. Next year a further huge cut of around £25m is expected to the local Council Budget.

We have gone way beyond the time when more efficient services could plug the gaps. We are now in the realm of closing down whole swathes of council services to make the books balance. And it is going to get worse – MUCH WORSE. Next year a further huge cut of around £25m is expected to the local Council Budget.

And by 2020, the Government grant to the Council is likely to have disappeared altogether, leaving the Council having to finance all its services from Council Tax and other charges – an impossibility without stopping lots of its core services altogether.

Labour leaders nationally have made clear repeatedly that they will stick to the Coalition’s spending plans: Ed Balls confirms Labour commitment to spending cuts. So, we face “the end of local government as we know it” as the Labour Leader of Birmingham City Council has argued: Albert Bore

The options are very clear

There are two clear strategic options for how to respond to this. The Tories locally support cutting back the local state and privatising services – regardless of the impact on the poor, the vulnerable and those most in need. Hence they support a freeze on Council Tax and lots of cuts to services.

The Greens believe we should use every lever possible to keep services going and mobilise opposition to the Government’s increasingly unpopular austerity drive. Hence the Greens support raising Council Tax and campaigning to win popular support for the idea via a city-wide Referendum.

Decision time for Labour

Labour is in a mess. It has no strategy other than opposing the Greens. It says it opposes cuts but is proposing to make them. It won’t allow local people to have a say through a Referendum. In the end though, Labour will have to choose – siding with the Tories to make a cuts Budget, or siding with the Greens to campaign for a small Council Tax increase to save services.

Labour councillors locally argue that a Referendum is unwinnable. They “know” because they have spoken to people on the doorstep. Well my day job is encouraging citizen participation and my reaction is that this is utterly unreliable.

If you knock on people’s doors and say: “Have you heard about the nutty idea of the Greens for a massive Council Tax rise, spending a fortune on a Referendum – isn’t that crazy?” Then the chances are that people will agree with you. And we know from people whom Labour have canvassed that this has been their script.

But campaigning means you adopt a different approach. If you ask people whether they would be prepared to pay 61p a week extra (on average) in order to ensure that vital services for vulnerable social service clients can be maintained, then you get into a dialogue and people weigh up the difficult choice. All the work I have done over ten years on participatory budgeting shows me that people are often much more altruistic than you might think.

Labour joining the Tories in refusing to let people have a say is disgraceful and patronising. It says we already know what people think so we won’t bother to let them speak.

Labour has become completely wedded to a “focus group” approach to politics: you ask people what their views are and shape your policies to fit in with them. A radical and campaigning approach to politics does the reverse: it attempts to engage with people where their views are now in order to change their minds. It is an interactive approach. People can and do change their minds but they have to hear the arguments.

That is why Labour joining the Tories in refusing to let people have a say is so disgraceful and patronising. It says we already know what people think so we won’t bother to let them speak.

The fear of Eric Pickles stepping in

Successive governments (including, shockingly, the last Labour government) have retained the power to step in and override local councils and the wishes of local people. And if no Budget is passed at Council, there is a real possibility that Government will send in a set of officials to set a budget. No one knows for sure as this power has never yet been invoked. But if it did happen, it would cause a huge outcry locally and nationally and become a cause celebre for all those opposing the Government’s cuts to public services.

If Labour refuses to back either the Greens Referendum/No Cuts Budget or the Tories Council Tax freeze, there is a real possibility this will happen. So Labour needs to come off the fence and decide: is it a radical party opposed to Government cuts and in favour of local people having a say, or does it side with the Tories and cuts to public services? There is no other alternative.

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