“We must demand the finances necessary to prevent a new phase of austerity in local Government”

Gateshead Council Labour Group has written to the Labour leadership calling for a national campaign for the funding necessary to prevent a new phase of austerity in local government.

“As Labour councillors who are opposed to a new phase of austerity we believe that unless there is a national campaign to press the government to fund local authorities sufficiently then, Labour councils will implement cuts which, after 10 years of austerity, will have disastrous social consequences.

If Labour leaves each local authority to its own devices, then the very people we should be supporting will suffer the consequences of job and service cuts. Some key workers who have played such a critical role in the pandemic will receive their thanks via redundancy notices and more people whose quality of life is dependent on social services will not receive them.

We therefore strongly believe that Labour should be opposing this new phase of austerity with a national campaign bringing together the Party with Labour councillors, local government (and other) unions and service users, to press the government to:

1. Honour its commitment to fund councils fully for the extra costs of dealing with the pandemic, and the losses of revenue resulting from lock-down.

2. Cancel loans to the Public Works Loan Board incurred in 2012, when they were imposed on Local Councils by Government changing from the Housing Revenue Account Housing Subsidy system, to one of being ‘self financing’. Writing off this ‘debt’ will mean that the Treasury will lose the annual payments. But, a commitment from Labour to write it off would be a recognition of the injustice of imposing this fictional ‘debt’ on tenants and the £8 billion windfall it delivered for Government. The consequences of implementing this write-off will be socially positive in that it will enable more work to be carried out by Councils, improve the homes of tenants and create jobs and more income to the Treasury via tax and national insurance.

3. Begin urgent discussions on a funding system based on an annual assessment of social needs in each locality.

4. Provide £10 billion annual grant to fund building 100,000 council homes a year, which is necessary not only to address the acute housing crisis, but will provide economic stimulus as we come out of the pandemic, putting people back to work, as well as providing public health and environmental benefits.

The government has been pressured into a number of U-turns. They can be forced into another one on local authority finances.

We must demand the finances necessary to prevent a new phase of austerity in local Government.”