As we approach the local elections, things are not as they may seem. Local issues are being shaped perhaps more than ever before by wider national and even international contexts in the wake of a worldwide financial crisis that saw the banks on the brink of collapse, threatening to take our own money down with […]

As we approach the local elections, things are not as they may seem. Local issues are being shaped perhaps more than ever before by wider national and even international contexts in the wake of a worldwide financial crisis that saw the banks on the brink of collapse, threatening to take our own money down with them until the bailout that has since cost the country £1.5 trillion.

You’ve got to give it to David Cameron, though: the former public relations whizzkid became Prime Minister and, aided by much of the corporate press, set about shortening memory spans and re-writing the causes of the national debt to suit the agenda of his Party.

As recently as 2008, the Tories vowed to match Labour’s levels of government spending, but in the aftermath of the crisis seized the moment as an excuse to slap a price tag on what was left of the state since Margaret Thatcher’s big sell-out of the 1980s that saw British Gas, British Telecom, British Airways and British Rail all up for sale to private companies, skimming off profits from these newly-privatised services.

But this cut in state spending said to be due to the deficit didn’t just allow the Tories to act out their small-state, pro-privatisation ideology. While the spin says they’re doing it because they’re concerned about national debt – which isn’t, in fact, even as high as it was in the post-war years that saw the creation of a welfare state and national health service – they also manage to pass the buck down to local government.

In towns all across the country, councils are being forced to spend less. But northern areas are losing £150 to £200 a head this year, while in the south-east, West Country, and some of the Midlands, the cuts range from between £0 and £50. Northern urban areas with more poverty and higher unemployment are losing 9% of their spending power, while more affluent towns such as Wokingham are losing less than 1%.

And so, in many disadvantaged parts of Britain, much of which don’t happen to vote Tory, these subsequently leaner services are seen as the fault of the councils themselves. Conveniently, statistics now show that Labour local authorities are under greater pressure to shed 50% more jobs than Tory areas. In Sheffield – with 61p in every council purse pound coming from central government – the effects are devastating. Last year, the city council had £50 million less than in 2010.

Given this, what options do councils have to offset their significantly decreased budgets while ensuring the maintenance of key services and protection of vulnerable groups?

While the Green Party recognised at their conference last year the need to set ‘balanced budgets’, several members recently left the party seemingly as a result of the Green councillors in the only Green-run council – Brighton – passing their budget despite the Labour and Tory opposition removing the Greens’ proposed council tax rise. However, the reasons for members leaving are rooted more in the fact Green councillors hadn’t tried to set an illegal budget.

Illegal budgets have the tendency to detract from the reality of the political situation, as the central government imposes drastic austerity measures, but cleverly passes hard decisions to local councils who have limited ability to raise revenue to offset such prolific cuts. However, the rate-capping rebellion of 1985 – where several councils attempted to set illegal budgets – largely failed.

Legally, central government will likely take over the running of a council if that council is unable or unwilling to set a legal budget, most likely setting a precedent as a warning to other councils. Essentially, illegal budgets aren’t practical, given the nature and constraints of the current political system.

So how do councils set a legal, fair budget? One method is for councils to utilise their reserves. But, as outlined, there is a postcode lottery of local government cuts, with Secretary of State for Communities and Local Government Eric Pickles’ own research even recognising that wealthier councils are more likely to have access to their reserves. For instance, if Birmingham were to spend all it can from its reserves, it would still only cover a third of its £33 million budget cuts for 2011-2012.

Nevertheless, this hasn’t stopped Pickles attacking councils for not using their reserves, despite the fact that most of these cannot be spent on plugging the gap between spending and cuts. Nor would such an option be sustainable, given the fact that these reserves would eventually run out.

Another potential method for councils to raise revenue is to increase council tax. More than 25 councils have rejected the government’s £675 million fund set aside to cover another council tax freeze due the risk of this causing greater debt for councils in the long-term.

For example, Brighton rejected this fund, arguing that a council tax freeze would still leave them £5.4 million worse off, while an increase would only cost the average household 57p more per week.

The problem with council tax is that it hits the poorest the hardest. A household earning £15,000 a year pays the same rates as their neighbour, who lives on the same street but earns £30,000.

The Liberal Democrats under Charles Kennedy championed the cause for an income-based council tax, so those who couldn’t afford to pay so much wouldn’t have to. But, of course, this policy that the LibDems had kept through at least three general elections was dumped with the rise to power of Nick Clegg, MP for Sheffield Hallam.

In the May elections, the concept of localism is being undermined, given the limited options that councils have when they are dealing with budget cuts imposed upon them by central government. While we should always hold councils to account, it’s probably more important than ever to consider this broader context when casting our votes and to raise awareness about the concentrated powers in Westminster, and the effects this has at a local level.

Jay Baker and Jane Watkinson are directors of the Sheffield-based social enterprise, SilenceBreakers, who collect used computers and recondition them for use in disadvantaged communities, giving a voice to the voiceless.

Jay Baker & Jane Watkinson.