Editorial of the Socialist issue 1300
The New Labour government’s first budget was just three short weeks ago. The Socialist called it a ‘smoke and mirrors budget’. It was portrayed as different from all the recent Tory budgets but behind the charade, it was more of the same.
NHS waiting lists will continue to grow, millions will fall deeper into poverty, schools will have to make further cuts and councils will also struggle.
Chancellor Rachel Reeves’s Budget listed an extra £1.3 billion in funding for local councils. But that will not alleviate the crisis. Councils are predicted to have a shortfall of over £4 billion next year. And even that masks the scale of the funding crisis and what has been lost from council services.
Over the last 14 years, councils have lost an average of 26% of their spending power. Many services that are vital, but which councils aren’t legally obligated to provide, have been cut and will continue to be slashed.
Just look at the impact of Storm Bert. Hundreds of homes are flooded and thousands are without power. Alongside the more well-known services that councils are responsible for, such as adult social care, they are also in charge of many roads and clearing drains, which can help prevent flooding. But as austerity hit, these services were some of the first to get cut. Today those cuts are having a disastrous impact on some people’s lives. And this is just one example.
Last year, a survey by the Local Government Association predicted that as many as one in five councils could go “bankrupt” and issue section 114 notices. But again, this still hides the real scale of crisis in funding. All the services which aren’t legal requirements for councils to provide have already been slashed.
So how can we fight for these services? This is more urgent than ever today as austerity and the funding crisis continues. Council cuts will be a growing arena of struggle, politically and industrially.
For the last 14 years, Labour councils have used the excuse that there was nothing they could do about disastrous cuts to services because they were not in power in government nationally.
Millions of people have lived life with a cutting Labour council, had a taste of Labour austerity and reject it. It’s one reason why, despite the almighty hatred of the Tories, the number of votes for Labour in the general election actually decreased from its 2019 level.
Electoral alternative
A growing layer of people are looking for an alternative voice to Labour and the Tories including in elections.
Therefore, the 2025 May council elections will be an important battle ground. A third of the population will be able to go to the polls, largely for county council elections outside of the major cities. Socialist Party members are preparing to stand as part of the Trade Unionist and Socialist Coalition (TUSC), fighting for no-cuts people’s budgets and on a socialist programme.
These elections are six months away. Between now and then, councils will set new cutting budgets, essentially on the same basis as throughout the last 14 years, with reduced spending power. However, they could face significant opposition from workers and service users who had been told that cuts were as a result of the Tories, and are not prepared to accept more cuts under Labour. The workers’ movement in local areas should coordinate opposition, starting by drawing up and fighting for ‘needs budgets’ that summarise all the services required by the community.
The attack on pensioners’ Winter Fuel Payments has showed Labour’s true colours. Meanwhile, Tower Hamlets council in east London, controlled by Aspire, has promised a £175 hardship payment this winter for those affected, to make up for some of the £200-300 cut. Other councils have pledged similarly under pressure.
The £175 payment is one of several positive measures implemented by Aspire since it ousted a cutting Labour council in 2022. It also extended free school meals to all students up to age 16. The council also still pays Education Maintenance Allowance for eligible sixth form and college students, cut by the Tories in 2010.
Tower Hamlets council
The pro-austerity character of Starmer’s Labour is summed up by the fact that the Labour local government minister Jim McMahon is sending in ‘ministerial envoys’ to Tower Hamlets, citing a failure of the council to “comply with its best value duty”, but not to the councils that top league tables for closing libraries, youth centres or other vital services.
However, If Aspire is going to play a role in spearheading a struggle against New Labour austerity, it would have to mobilise the local community and trade union movement around an anti-cuts programme, as well as looking to other councils to fight the government collectively for further funding.
Cuts aren’t the only option
Councils can absolutely fight back for the funding they need. Despite years of austerity, even just the councils with elections in May 2025 have £7.538 billion in general fund and capital receipt reserves that could be used to resource a fightback. A fraction could be used to extend the Household Support Fund to ensure no one is negatively impacted by the cuts to the winter fuel allowance, for example.
By passing a no-cuts people’s budget, using all its spending and borrowing powers, a council could defend services and mobilise popular support from working-class communities and trade unions to demand the money from the government. That is the approach the Socialist Party and TUSC have been campaigning for.
Council unions can fight back
Unite the Union has already been campaigning for Labour to reverse the Winter Fuel Payment cut and taken action against Labour councils cutting staff, attacking terms and conditions and freezing wages. It, along with other public sector unions, could play an important role in campaigning for proper funding of local government.
The website of the biggest local government union, Unison, highlights the dire state of services. On a local level, many Unison branches are part of campaigns to fight the cuts. But at a national level, Unison’s website article about how to fight council cuts simply says people should write to their MPs. And they continue to offer cover for the attacks on services which Labour is complicit in. Unison’s own website says: “Labour has inherited a mess, with essential services battered and bruised”.
Rather than making apologies for them, a much more serious struggle is needed to force Starmer’s government to properly fund council services. Local councils employ 1.3 million workers. Collectively they are the second-biggest employer after the NHS, meaning the industrial weight of council workers properly mobilised could force Starmer and Reeves into big concessions. After all, it was a desire to avoid further public sector strikes that made the Labour government offer bigger pay rises than it otherwise would have done in the public sector.
Such a fight will need to be properly organised to ballot members on funding and pay. Despite the fact that, previously, local government union branches struggled to surpass the anti-union law’s turnout thresholds, if a new struggle was launched alongside other unions, including mobilising the growing anger against the Starmer government, then it would be possible to win. Given that Labour has promised to repeal the turnout thresholds, they will not have the same power to cow local government trade unionists as in the past. And, of course, one important part of that struggle will be demanding that the government repeals them, along with all anti-trade union laws, not at some indefinite point in the future – but immediately.
