Rob Pettefar, Swindon Socialist Party

Thirty councils in England have been granted ‘Exceptional Financial Support’ (EFS) by the Labour government. This is not fresh money from central government, so desperately needed by councils which have dutifully implemented cuts from Tory and now Labour governments instead of fighting back. No, it is permission to borrow more money to make up for spending shortfalls of councils closest to the brink.

The support includes allowing capital funds raised through borrowing and the sale of assets to be used for day-to-day expenses. It is expected that the funds are to then be repaid through the sale of council assets, cuts to spending and increases in council tax, while pleading with councils not to sell their ‘historic buildings’ and artworks.

Taxes and more debt

The most in-need councils have been granted permission to raise taxes by up to 10%. Almost a quarter of London councils face financial collapse without this support, but loans can only keep the wolf from the door for so long. Borrowing to support running costs is not sustainable in the long run. But, along with using reserves, it could be used by a council fighting the cuts while building a campaign to demand adequate funding.

Real funding for local councils is needed. A restoration of the pre-financial crisis grants would be a start. Budgets have been cut to the bone since 2010, and that funding has never been restored. Instead, councils were encouraged to be more ‘entrepreneurial’. Several councils have lost big money on property ventures such as Thurrock, Croydon and Woking. Cuts to all services except the minimum required by law have left residents suffering, public spaces poorly maintained while service fees are increased.

My council, Swindon, has a £18.9 million budget shortfall this year. It is getting access to the support, but only £14.7 million. The rest is going to have to come from even sharper cuts on top of £12.1 million of ‘savings’, i.e. cuts that have already been proposed.

What more to cut?

With the gristle on the bone already carved off, it’s hard to know what councils can even cut. Council tax rises push the burden onto already over-stretched household budgets. It’s time that this ludicrous and cruel austerity programme is ended. The rich have never been richer, while overworked public service providers struggle to put food on the table. The working class foots bigger and bigger bills for worse services as private operators and contractors pay themselves huge bonuses and share buy-backs.

We need an end to austerity and the proper funding of public services. Socialist Party members stand in elections as part of the Trade Unionist and Socialist Coalition and call for councillors to set needs-based budgets and build working-class campaigns to demand the money from central government. For Labour-controlled councils there are no more excuses, with Starmer’s Labour now in power, get to work demanding the resources their constituents need!

Allowing borrowing and letting councils skyrocket council tax rates shows the Labour government can change the rules when councils are on the brink. Councils could be providing the services we need, kicking out the outsourcing profiteers and campaigning alongside council unions for decent jobs and pay instead of attacking council workers. And if Labour, or Green, councillors aren’t prepared to do this we need ones who will.

SEND funding

One contributing factor to the local government financial crisis is the ticking time bomb of SEND (Special Educational Needs and Disabilities) funding. A special financial arrangement called a ‘statutory override’ allowed councils to not put deficit spending on SEND on the books. This expires next year with no plans to renew it. The deficit nationally is estimated to be around £2.7 billion for 2025-26, dwarfing the EFS support of £1.5 billion granted this year.

In Swindon the SEND deficit totalled £8.4 million at the end of 2023 and by 2027-28 could total £18.5 million. A report by the County Councils Network estimates that 26 of England’s largest councils could declare themselves effectively ‘bankrupt’ by 2027 because of this. A survey by the Local Government Association put that estimate at one half of councils.