Austerity is about to hit us thanks to Johnson’s coronavirus chaos

Boris Johnson Tory government
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UK lockdown restrictions may be easing. But at the same time it seems that austerity is about to come knocking at the doors of millions of people. And so far, the government is doing nothing to stop it.

Council chaos

As The Canary previously reported in April, Liverpool City Council is in dire financial straits. It was facing a £44m black hole in its budget due to “increased costs and loss of income”. This is despite the government giving it £34m as part of its £3.2bn package to support local authorities. The council warned at the time it would have to start reducing services. And the mayor Joe Anderson said it was potentially facing ‘bankruptcy’. And now, the extent to which other councils across England are in similar positions has been revealed.

The Centre for Progressive Policy (CPP) thinktank has done research into local authorities’ finances. The Local Government Association (LGA) said there was likely to be a £6bn shortfall in local authority funding. But the CPP went further. It found:

  • 131 out of 151 English upper tier councils don’t have enough financial reserves to make up for increased expenditure and loss of income.
  • This figure includes 18 out of 19 councils which have former “Red Wall” Labour constituencies in them; the very areas the Tories pledged to help “level up”.
  • Councils have “in effect” £5.5bn in reserves. This is 7.1% of their budgets. But the CPP says coronavirus has increased upper tier councils’ costs by 10.8%.

This is where the problem lies. In short, councils are paying out more than they can afford. The CPP gave Hackney as an example. It said the council:

has already publicly stated they expected the cost of the crisis to be £72m or a 13% increase in their expenditure. This shows that unallocated reserves are highly unlikely to solve the gap in funding caused by Covid-19 for either individual councils or the sector as a whole.

Austerity looming?

The Guardian reported that councils are facing a stark choice: cut spending on all but essential services or face bankruptcy. For example, Bath and North East Somerset Council has already said it will have to make £22m in cost savings. ITV News reported that this includes:

reviewing the timetable for delivering capital projects, and reducing the council’s salary budget by leaving vacancies unfilled and offering reduced hours.

Read on...

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Kent County Council is already considering an increase to council tax and “major cuts”. Then, according to BBC News, Luton Borough Council is saying it may plug its £50m shortfall by:

stopping the school meals service, reductions in highways maintenance, charging for green waste collection and reduced funding for adult social care and mental health support services.

Essentially, councils are going to impose austerity to make up for the lack of government help. But there is another way.

Another way

The Socialist Party is calling on councils to pass “no-cuts” budgets. It says:

It has always been feasible for councils to stop all cuts and invest in services, and use their reserves and borrowing powers.

This would have created the space for individual councils to technically produce ‘balanced budgets’. These anti-austerity budgets could then be used to build public support for a campaign to win back the money from the government, and to coordinate with the other Labour councils around the country.

As The Canary previously reported, before the pandemic, Wirral council did this. Admittedly councils’ budgets have got bleaker since coronavirus hit. But instead of imposing austerity on some of England’s poorest people, councils should work together to force the Tories’ hands. After ten years of austerity, many communities may not cope with more cuts. So now is the time for councils to take a stand.

Featured image via YouTube – 10 Downing Street

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  • Show Comments
    1. Not sure you can pin this on Johnson. The lockdown was always going to mean economic hardship afterwards – you can’t shut down an economy for three months without major consequences. Politicians across the political spectrum supported the lockdown so they should share some of the blame for aftermath.
      It was the same with the Iraq War – Blair made the scapegoat for a war which the Tories and media fully supported.

    2. Ignorance is bliss when knowledge is impotent

      1. A sovereign govt can finance anything we have the people and resources to make happen, without risk or cost. Increase economic activity and everything is paid for.

      2. A local govt can NOT. It must rely on taxpayers AND national govt financing, which can be done without problem or risk. The Tories simply refuse to invest in British people, our communities or the economy

      3. The law that members of govt can’t be held responsible for gross negligence is going to kill hundreds of thousands more British people. The Tories are responsible for approximately a quarter of a million excess deaths in the last decade

      This descent into barbarism is too tragic and idiotic to watch.
      And for what? For aristocrats to ‘win’ the class war?
      Britain is a failed state

    3. Just to re-emphasise; ‘The Tories simply refuse to invest in British people, our communities or the economy’. Very succinct sir. I remember discussing T B Liar with a retired civil servant that had in her time been a government adviser. The question I posed was; ‘why did he want to be the leader of the Labour Party?’. The answer I received was; ‘because he couldn’t become the leader of the Conservative Party’. It put our political system into perspective and re-emphasised the continuity between the two main parties. A continuity that Corbyn&Co challenged and continues to challenge.

    4. Forgoting about the economic consequences of Brexit here.
      I’ll bet more than a few people are planting gardens, as England goes bankrupt? Its debt load was near Greece’s before all this happened before Greece succumbed to its bailout rather than forge an alternative way, after gross negligence/corrutpion by its politicians.
      They should make politicians responsible for gross negligence in the loss of lives?
      What a good idea.
      Certainly saves bringing out the guillotine, or impalling their heads on the spikes of cast iron railings, all of which people used to do just a short while ago in history.
      It wouldn’t be barbarism then.

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