The crisis facing La bour councils

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LOCAL government cuts did not start with the Thatcher government, It was the 1974-9 Labour government which dramatically reversed the expansion of local authority spending and services characteristic of the early '70s.

In 1975-6 local authority spending was 15.5% of national income; by 1978-9 it was down to 12.8%, the same percentage as 1982-3. Big cuts by right-wing Labour councils, and big rate ises by more left-wing ones (like Lambeth), had already started long before the Tories took office n May 1979.

The present Tory government, however, is concerned not only to cut expenditure but also to beat down non-conformist councils. Thus:

1. it has continued and sharpened the Wilson-Callaghan policy of cutting central government money for local councils. In 1975-6, central government grant accounted for 66.5% of local authority spending. By 1978-9 it was down to 60.8%. For 1984-5 it is scheduled to be 52%.

According to the Guardian (21.10.83):

«'The severity of this regime is compounded by the way the Government has fixed the spending targets. Low-spending councils were told in August that they could spend 3% more in cash in 1984-5 than their budgets this year. After allowing for inflation, this means that they are being asked for a difficult but achievable squeeze.

'The highest-spending councils have been told, however, that they must spend 6% less in cash next year. After allowing for inflation, this implies a real terms cut of 11 or 12%.

"It is privately admitted in Whitehall that cuts of this magnitude are totally unrealistic in a single year. Mr Jenkin's AS THE Tory government prepares to force through another round of legislation "capping" the rates of local authorities and attacking the metropolitan councils, the fight against cuts in local government services remains a live issue for the labour movement.

In this first part of a discussion article on the lessons of the struggle so far, MARTIN THOMAS looks at the record of the Labour left in the council chambers.

new penalty system, however, will ensure that councils failing to achieve them will be severely punished."

2. The Tories have specifically targeted 'high-spending', Labour controlled, inner-city authorities. These authorities have suffered disproportionately in the grant cuts. In addition the Government has acquired, and is acquiring, further direct powers to penalise them.

Three sources Councils have three sources of income: charges (rents, etc.), central government grant, and rates. Rates are a property tax levied on occupiers. Each property has a "rateable value' corresponding to a notional rent, and estimated every so many years by a central government valuer. The council can then fix a 'rate' of so many pence in the pound on those rateable values.

The Tory scheme means that central government fixes target level of spending for each authority. For each amount that the authority spends over that target level, the government Become a supporter of the Socialist Organiser Alliance - groups are established if most large towns. We ask £1.50 a withdraws an amount of central government grant equivalent to so many pence on the authority's rates.

To get an idea of the effect, suppose we have an 'overspending' council with a rate of about 150p in the pound. Suppose it wants to take an item of expenditure which would amount to an extra 1% on its spending. If rates cover half of its budget, that means a 2% - or 3p -increase in the rates. But then the council loses the equivalent of a 5p rate (this year) or a 9p rate (next year) in central government grant. So in fact it has to raise the rates by 8p (this year) or 12p (next year). To offset the Tories' demanded 11% real cut, it has to raise rates by 132p (next year).

The GLC is 53% over its target expenditure (1983-4), so it gets no central government grant anyway and cannot be further penalised in this way. Greenwich is 21% over, Southwark 17% Lambeth 10%, Islington 9%.

The government is now seeking to introduce powers which, as from 1985-6, will enable it directly to instruct individual councils to cut their rates. It has had such powers in Scotland since 1982. In July this year, for example, four authorities, including Lothian region and Glasgow district, were ordered to make rate cuts totalling £19 3. Other Government measures to restrict councils in specific areas include legislation restricting Direct Labour Organisations, and the anti-union laws, which make unionlabour-only clauses in council contracts unlawful.

4. The Government plans to abolish the Greater London Council and the metropolitan authorities as from 1985-7. Their functions will be transferred partly to lower-tier councils, and But Lambeth's leaders turned to ratt this.

More interesting has been the record of the Labour left in local government.

The late '70s and early '80s saw a whole stream of Labour leftists displacing right wingers in Labour council seats. Many of these leftists, typified by Ken Livingstone, were markedly to the left of the traditional Tribune Labour Left mould.

This new left, however, has failed the test of the class struggle. That, it seems to me, is the necessary conclusion from a serious examination of the record.

Launched

A convenient starting point is summer 1978, when the Socialist Campaign for a Labour Victory (the initial sponsor of SO) was launched. The SCLV platform included the call to 'freeze rents and rates'. A wide range of Labour leftists signed it without complaint. Some - like Ted CLAMBETA A increases! ference signed by 35 councillors, including Ted Knight, Val Veness and Ken Livingstone, stated that, "Rate rises can only be a stop-gap measure."

An amendment from Workers Action, proposing instead immediate organisation for a fight against central government was lost by a two-to-one majority. In the next issue of SO Mike Davis theorised the rate-rise line: 'We opposed rate rises as the solution. But we also argued that if rate rises were used as a means ... of buying time to prepare popular resistance, they could be defended among those most vocal preaching this line was led Knight, leader of Lambeth council, and the most prominent 'local government leftist' of that period. Rate rises, he argued, were the only serious way to fight for a policy of 'no cuts' What did he 'buy time' for?

A few weeks later, at the beginning of July, he ordered a BUND STOP TON ahead, include cuts and rate rises in next spring's budgets -and claim they have no alternative."

And so it proved. In April 1980 Lambeth went for a 49% rate rise and a £1.60 rent rise. In April 1981, panicking in the face of working class anger against the rate rises, they went for 10% cuts.

This first short cycle of events contained many of the essential elements which were to recur later.

A leftist group 'took power' in the established structures of local government, without a clear perspective, without a prior mass campaign on the basis of that perspective. In Lambeth this feature was especially marked: Knight's 'base' was essentially nothing more than a personal power position within a not-very-left-wing council Labour Group.

Unclear as to their perspectives, the leftists went for rate rises as a way of 'buying time' and in the meantime hoped for another force to launch the desired struggle. When that other force - the industrial 'big battalions' - failed to turn out on schedule, the leftists opted for 'doing the best they could' within the existing structures.

This capitulation had a demoralising effect on the whole Lambeth labour movement and especially the left. Asked in 1981 to speak at a Socialist Organiser day school on the role of Marxist councillors, one of the very few councillors in Lambeth who opposed the rate rises replied bitterly, 'The role of Marxist councillors these days seems to be making cuts"

Cynical

In the course of 1979-80, Ted Knight had re-established strong connections with the degenerate 'Marxists' of the

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TIGNTE STOP TORY LUCAN STILL TURNTOUS