Labour Led Birmingham Council Goes Bankrupt

Hi

We have had austerity for over a decade, which has meant reduced Government Funding for Councils.

Functions have also been moved from Central Government to Councils without proper funding.

There has a also been a huge rise in adult social care costs., we are living longer and the Govt has been insisting on Care in the Community.

Social Care costs in my Council are 65% of it’s total Budget.

I am not going to pretend that all Councils are good and careful at spending money, however the way the system works is that the most efficient Councils, the ones with least waste to cut, are the hardest hit by the system.

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I could be wrong (I usually am!) but weren’t councils originally set up to locally manage housing, rubbish collection and maintaining streets and byways? They never relied upon government handouts or funding as they were self sustaining. Now they have got too big for their breeches poking their noses into commercialism and investment. They also contract out most of their rubbish collection and street maintenance to greedy private companies. Our council has wasted millions on architects and planners on projects that never actually materialised. And when Peel Holdings closed Doncaster Airport the council spent more millions on legal fees trying to obtain a compulsory purchase order to buy the airport.
They close perfectly good local schools and don’t make good use of the buildings, and it causes local kids to visit schools some miles away from their homes and needing transport to get there…
And don’t get me started on net zero and this recycling nonsense, supplying everyone with three bins and a box and having several teams emptying each bin into three different million pound state of the art lorry’s. In my day a couple of blokes would tip one bin onto the back of a lorry, the same couple of blokes who would be seen filling in holes in the road or cutting the grass the next day

Hi

An explanation

All the other things where and still are Government Instructions, Privatisation mad, which costs ratepayers more and most refuse collection is now fench owned.

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That’s an excellent article and it makes many good points about how local government is hamstrung by central government … :+1:

Right at the beginning:

Local authorities have three main sources of revenue:

  • government grants – money from central government for local services
  • council tax – a property tax levied on residential properties
  • business rates – a property tax levied on business premises.

In 2019/20 (the last year before emergency Covid funding), local authorities in England received 22% of their funding from government grants, 52% from council tax, and 27% from retained business rates.

Unlike central government, local authorities cannot borrow to finance day-to-day spending, and so they must either run balanced budgets or draw down reserves – money built up by underspending in earlier years – so as not to exceed their annual revenue.

Local government in England has limited revenue-raising powers compared to other wealthy countries. In 2018, every other G7 nation collected more taxes at either a local or regional level.

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So what I said then… :069:

Local government may have started out simply but, following the Industrial Revolution, necessity required massive changes and, following World War II, national politics played an increasing part in creating complex layers of local administration.

Briefly:

History of local government in England - Wikipedia.

The history of local government in England is one of gradual change and evolution since the Middle Ages. England has never possessed a formal written constitution, with the result that modern administration (and the judicial system) is based on precedent, and is derived from administrative powers granted (usually by the Crown) to older systems, such as that of the shires.

The concept of local government in England spans back into the history of Anglo-Saxon England (c. 700-1066), and certain aspects of its modern system are directly derived from this time; particularly the paradigm that towns and the countryside should be administrated separately. In this context, the feudal system introduced by the Normans, and perhaps lasting 300 years, can be seen as a ‘blip’, before earlier patterns of administration re-emerged.

It was Henry II (1154-1189) who greatly expanded the separation of towns from the countryside. He granted around 150 royal charters to towns around England, which were thereafter referred to as ‘boroughs’. For an annual rent to the crown, the towns were given various privileges, such as the exemption from feudal dues, the right to hold a market and the rights to levy certain taxes. It should be noted however, that not all market towns established during this period were self-governing.

The self-governing boroughs are the first recognisably modern aspect of local government in England. Generally they were run by a town corporation, made up of council aldermen, the town ‘elders’. Although each corporation was different, they were usually self-elected, new members being co-opted by the existing members. A mayor was often elected by the council to serve for a given period. The idea of a town council to run the affairs of an individual town remains an important tenet of local government in England today.

There were further changes in The Later Middle Ages (1300–1500) and beyond (1500–1832)

The Great Reform Act 1832

The development of modern government in England began with the Great Reform Act of 1832. The impetus for this act was provided by corrupt practices in the House of Commons, and by the massive increase in population occurring during the Industrial Revolution.

The Reform Act (and its successors) attempted to address multiple issues by abolishing rotten boroughs (as both constituencies and administrative units), enfranchising the industrial towns as new parliamentary boroughs, increasing the proportion of the population eligible to vote, and ending corrupt practices in parliament. Although this did not directly affect local government, it provided impetus to reform outdated, obsolete and unfair practices elsewhere in government.

The Municipal Corporations Act 1835

After the reform of parliamentary constituencies the boroughs established by royal charter during the previous seven centuries were reformed by the Municipal Corporations Act 1835. The Act required members of town councils (municipal corporations) in England and Wales to be elected by ratepayers and councils to publish their financial accounts.

Before the passing of the Act, the municipal boroughs varied depending upon their charters. In some boroughs, corporations had become self-perpetuating oligarchies, with membership of the corporation being for life, and vacancies filled by co-option.

The Act reformed 178 boroughs immediately; there remained more than one hundred unreformed boroughs, which generally either fell into desuetude or were replaced later under the terms of the Act. The last of these were not reformed or abolished until 1886. The City of London remains unreformed to the present day. The Act allowed unincorporated towns to petition for incorporation. The industrial towns of the Midlands and North quickly took advantage of this, with Birmingham and Manchester becoming boroughs as soon as 1838. Altogether, 62 additional boroughs were incorporated under the act. With this Act, the boroughs (thereafter “municipal boroughs”) began to take a more noticeably modern and democratic form.

Public welfare reforms

During the industrial revolution there were massive population increases, massively increased urbanisation (especially in previously unimportant towns), and the creation of an urban poor, who had no means of subsistence. This created many new problems that the small-scale local government apparatus existing in England could not cope with. Between 1832 and 1888, several laws were passed to try and address these problems.

In 1837 laws were passed allowing rural parishes to group together as Poor Law Unions, in order to administer the Poor Law more effectively; these unions were able to collect taxes (“rates”) in order to carry out poor-relief.

In 1848, a Public Health Act was passed, establishing a Local Board of Health in towns, to regulate sewerage and the spread of diseases.

In 1873 and 1875, further Public Health Acts (Public Health Act 1873 & Public Health Act 1875) were passed, which established new quasi-governmental organisations to administer both the poor law, and public health and sanitation.

The Local Government Acts 1888 and 1894

By 1888 it was clear that the piecemeal system that had developed over the previous century in response to the vastly increased need for local administration could no longer cope. The Local Government Act was therefore the first systematic attempt to impose a standardised system of local government in England.

The Act established county councils as well as newly created areas for those councils, to be known as administrative counties. Each administrative county and county borough was governed by an elected county or borough council, providing services specifically for its own area.

A second Act in 1894 (the Local Government Act 1894) created a second tier of local government by dividing all administrative counties into either rural or urban districts, allowing more localised administration.

Attempts at reform (1945-1974)

Local governments across the United Kingdom lost power after the Labour Party won the 1945 general election and formed its first majority government under Clement Attlee. Under Labour’s post-war social and economic reforms functions traditionally operated by local governments such as gas, electricity, and hospitals were nationalized under regional boards or national government institutions such as the National Health Service. A government white paper published in 1945 stated that “it is expected that there will be a number of Bills for extending or creating county boroughs” and proposed the creation of a boundary commission to bring coordination to local government reform. The report was not acted upon.

The next attempt at reform was by the Local Government Act 1958, which established the Local Government Commission for England and the Local Government Commission for Wales to carry out reviews of existing local government structures and recommend reforms. Some borough changes were implemented.

The Local Government Commission was wound up in 1966, and replaced with a Royal Commission (known as the Redcliffe-Maud commission). In 1969 it recommended a system of single-tier unitary authorities for the whole of England, apart from three metropolitan areas of Merseyside, Selnec (Greater Manchester) and West Midlands (Birmingham and the Black Country), which were to have both a metropolitan council and district councils. This report was accepted by the Labour Party government of the time despite considerable opposition, but the Conservative Party won the June 1970 general election, and on a manifesto that committed them to a two-tier structure.

The Local Government Act 1972

The reforms arising from the Local Government Act of 1972 resulted in the most uniform and simplified system of local government used in England so far. They effectively wiped away everything that had gone before and built an administrative system from scratch. All previous administrative districts - statutory counties, administrative counties, county boroughs, municipal boroughs, counties corporate, civil parishes - were abolished, with the exceptions of Greater London and the Isles of Scilly.

The aim of the Act was to establish a uniform two-tier system across the country. New counties were created to cover the entire country. Many of these were based on the historic counties, but there were some major changes, especially in the North. The tiny county of Rutland was joined with Leicestershire; Cumberland, Westmorland and the Furness exclave of Lancashire were fused into the new county of Cumbria; Herefordshire and Worcestershire were joined to form Hereford & Worcester; the three ridings of Yorkshire were replaced by North, South and West Yorkshire, along with Humberside. The Act also created six new metropolitan counties, modelled on Greater London, to address the problems of administering large conurbations; these were Greater Manchester, Merseyside, Tyne & Wear, West Yorkshire, South Yorkshire and the West Midlands. The new counties of Avon (the city of Bristol, North Somerset and South Gloucestershire), Cleveland (the Teesside area) and Humberside were designed with the idea of uniting areas based on river estuaries.

Each of the new counties was then endowed with a county council to provide certain county-wide services such as policing, social services and public transport. The Act substituted the new counties “for counties of any other description” for purposes of law. The new counties therefore replaced the statutory counties created in 1888 for judicial and ceremonial purposes (such as lieutenancy, custodes rotulorum, shrievalty, commissions of the peace and magistrates’ courts); and replaced administrative counties and county boroughs for administrative purposes.

The second tier of the local government varied between the metropolitan and non-metropolitan counties. The metropolitan counties were divided into metropolitan boroughs, whilst the non-metropolitan counties were divided into districts. The metropolitan boroughs had greater powers than the districts, sharing some of the county council responsibilities with the metropolitan county councils, and having control of others that districts did not (e.g. education was administered by the non-metropolitan county councils, but by the metropolitan borough councils). The metropolitan boroughs were supposed to have a minimum population of 250,000 and districts 40,000; in practice some exceptions were allowed for the sake of convenience.

Where municipal boroughs still existed, they were dissolved. However, the charter grants made to those boroughs (where transfer had not already occurred), were generally transferred to the district or metropolitan borough which contained area in question. Districts which succeeded to such powers were permitted to style themselves ‘borough councils’ as opposed to ‘district councils’ - however, the difference was purely ceremonial.

The new system of local government came into force on 1 April 1974, but in the event the uniformity proved to be short lived.

Further reform (1974-)

Local Government Act 1985

This uniform two-tier system lasted only 12 years. In 1986, the metropolitan county councils and Greater London were abolished under the Local Government Act 1985. The Conservative government’s stated reason for the abolition of the MCCs was based on efficiency and their overspending. However the fact that all of the county councils were controlled at the time by the opposition Labour Party led to accusations that their abolition was motivated by party politics.

Local Government Act 1992

By the 1990s, it was apparent that the ‘one-size fits all’ approach of the 1974 reforms did not work equally well in all cases. The consequent loss of education, social services and libraries to county control, was strongly regretted by the larger towns outside the new metropolitan counties, such as Bristol, Plymouth, Stoke, Leicester and Nottingham. The abolition of metropolitan county councils in 1986 had left the metropolitan boroughs operating as ‘unitary’ (i.e., only one tier) authorities, and other large cities (and former county boroughs) wished for a return to unitary governance.

The Local Government Act (1992) established a commission (Local Government Commission for England) to examine the issues, and make recommendations on where unitary authorities should be established. The commission recommended that many counties be moved to completely unitary systems; that some cities become unitary authorities, but that the remainder of their parent counties remain two-tier; and that in some counties the status quo should remain.

Whilst these reforms had removed unpopular new counties, they created a rather haphazard situation, which was for the most part like the old counties & county borough system; but in which areas taken to make the abolished new counties was not returned to the historic county.

Creation of additional unitary authorities after 2000

The years after 2000 saw further substantial changes, leading to a still more varied (some might say haphazard) system. Various Counties were made into unitary authorities: some by abolition of Districts (e.g. Cornwall, Northumberland), others by geographical division into two or more unitaries (e.g. Bedfordshire).

The Labour government (1997–2010) of the United Kingdom had planned to introduce eight regional assemblies around England, to devolve power to the regions. This would have sat alongside the devolved Welsh, Scottish and Northern Irish Assemblies. In the event, only a London Assembly (and directly elected Mayor) was established. Rejection in a referendum of a proposed North-East Assembly in 2004 effectively scrapped those plans.

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Only until the 20th century then, in summary:

Changes to English local government revenue finance systems

Before 1900, most of the spending of local bodies was financed locally. With the exception of police forces (which were supported by a 50 percent Home Office grant) and some primary education grants, there were few grants from central government. Various rates were levied for specific services (for example highway rates, poor rates and school rates) and not all were assessed in the same way.

Following the abolition of the separate poor rate in 1929, rates became a single unified tax. By then, sizeable central government grants were being paid to encourage different areas to provide services of a consistent standard. These were usually made for specific purposes, rather than as general unhypothecated) financial support for local spending.

The position in 1945

Nearly 80 percent of central government grants were in the form of specific grants. The remaining 20 percent was an unhypothecated or block grant. Approximately equal amounts obtained from government grants and local rates.

1948 Transfer of responsibility for the setting of rateable values of all properties to the Inland Revenue Valuation Office. Previously, each local authority set its own rateable values, resulting in substantial
differences between average rateable values for similar properties in different parts of the country.

1948 Block grant to be paid only to authorities whose means or rate resources were below the national average and renamed Exchequer Equalisation Grant.

1958 Many specific grants replaced by General Grant, a new form of unhypothecated block grant so specific grants accounted for less than 30% of government grants. Exchequer Equalisation Grant renamed Rate Deficiency Grant.

1966 General Grant, Rate Deficiency Grant and specific grants for school meals and milk incorporated into Rate Support Grant (RSG) with three elements: domestic, needs and resources.

1974 Following structural reorganisation, proportions of resources and domestic elements of RSG increased. Needs element paid to upper tier, resources and domestic elements payable to lower tiers. More specific grants incorporated into RSG. About 20% of government grants were specific grants. Ratio of government grants: local rates approximately 17:10.

1981 Needs and resources elements of RSG became Block Grant - payable to both upper and lower tiers - and calculated to penalise high spending authorities for the first time. Its distribution was based on each authority’s Grant-Related Expenditure (GRE) as calculated by the Department of the Environment.

1984 Rate limitation (capping) introduced. During the 1980s, the method of grant allocation was adjusted to provide a disincentive to overspending.

1989 Non-domestic rating revaluation. New national rating system came into effect from April 1990.
1990 Domestic rates were abolished and community charge (poll tax) and nationally determined uniform non-domestic rate introduced. Revenue Support Grant replaced rate support grant. Aggregate external finance (AEF) replaced aggregate exchequer grant (AEG). SSAs replaced GREAs. Ring-fenced housing revenue account introduced. Districts collected RSG for the area and passed a portion of this and of community charge to county councils.

1991 An additional £140 per charge payer was provided in central government support, thereby increasing the proportion of local government spending funded by central government.

1993 Council tax replaced the community charge as the local domestic tax. RSG and non domestic rate entitlements were paid into the General Fund of each billing and major precepting authority rather than into the Collection Fund of billing (formerly charging) authorities.

1999 Pre-announced universal capping limits were discontinued to be replaced with reserve powers, which allowed local authorities budgets to be looked at over more than one year. Non-domestic rating
revaluation. New rateable value came into effect from April 2000. Central Support Protection Grant introduced to ensure minimum levels of grant support for billing and precepting authorities.

2002 A new formula grant distribution system was introduced, based on Formula Spending Shares (FSS), instead of SSAs, from 2003-04.

2003 The Local Government Bill 2003 received Royal Assent on 18 September. The Act is a deregulatory measure which includes new borrowing freedoms, expenditure grants designed to allow all authorities more flexibility in the use of existing resources, the introduction of the new small business rate relief, powers to charge for discretionary services, new trading powers, the introduction of Business Improvement Districts, and the introduction of a fixed 10-yearly cycle for council tax
revaluation.

There’s more but increasingly specific.

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Omah has kindly shared some facts which means this sentence quoted might be better updated to “They once a long, long time ago did not require government handouts but for decades the onus of responsibilities beyond bin collections has necessitated central government support”. Now we are all happy.

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Hi

The unseen work

This one part of Environmental Health, it is a Statutory Duty and the costs of inspections are not chargeable.

Funding has been cut on average by 30% over the last 10 years.

The costs to the NHS of rising medical costs from food from these places is more than the money saved on Enforcement.

That is the stupidity of Austerity.

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That is very valid and worthy of a whole thread of its own. 13 years of cost cutting yet costs go up while the quality of services goes down - so how is that a benefit?

Quite … :+1:

From swimfeeder’s link:

Local authority ‘spending power’ – the amount of money authorities have to spend from government grants, council tax and business rates – fell by 17.5% between 2009/10 and 2019/20, before partially recovering. However, in 2021/22 it was still 10.2% below 2009/10 levels.

The fall in spending power is largely because of reductions in central government grants. These grants were cut by 40% in real terms between 2009/10 and 2019/20, from £46.5bn to £28.0bn (2023/24 prices). This downward trend was reversed in 2020/21 and 2021/22 as central government made more grant funding available to local government in response to the pressures of the pandemic. Though even including Covid grants, the fall in income was still 21% in real terms between 2009/10 and 2021/22; without, the fall was 31%.

Between 2010 and 2015, the coalition government encouraged councils to freeze council tax rates by offering them higher grants. In effect, councils who froze council taxes did not lose revenues. In some years, these grants were a ‘one-off’ – local authorities were given additional money for a single year – whereas in others they were permanently ‘rolled in’ to central government grants to local authorities.

All local authorities have had to find ways to do more with less in the face of cuts to their spending power. But the size of the cuts since 2010 have varied across different types of local authorities.

The deepest cuts have been to shire districts. In part this is because they did not benefit from the 2019/20 and 2020/21 social care uplifts for upper and single-tier authorities – which include all metropolitan, county, unitary and London authorities.

Upper and single tier authorities have faced particular difficulties because of rising demand for social care, even though since 2016/17 they have been allowed to increase council tax rates more quickly. Social care is a statutory responsibility – that is, local authorities are legally obliged to provide it – and so they have protected spending on social care for children and adults, often at the expense of other services, such as libraries and road maintenance.

Cuts also fell more heavily on more disadvantaged local authorities. The most deprived local authorities experienced the largest falls in spending power between 2010/11 and 2019/20. This is because of the way that central government allocated funding cuts. Grant funding was cut by a uniform percentage across all local authorities in the first half of the 2010s, but because grant funding made up a greater proportion of more deprived local authorities’ funding, this approach meant that their spending power fell by more.

All those “austerity” cuts saved the Tory governments billions, which was fortunate really, because then BJ’s government was able to use those savings to fund the VIP lane for alleged PPE suppliers and the abortive NHS Test and Trace system during the COVID crisis, profligacy which has already been covered in previous threads.

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Thanks Omah, however, I still think councils have got far too complex for their own good.
Our council in particular is labour run and has always been. A bit of the ‘old boys club’ and ‘closed shop’ Councils should not be politically biased and should be controlled by someone who knows a bit about finance.
Doncaster council succeeded in getting city status for Doncaster. Doncaster is not a city, and never will be. Did they ask the residents? No. They assumed that if they build a couple of thousand new houses and increase the population of the town we should qualify.
Councils should all become bankrupt and sacked, cut out the deadwood and start again. There are more backhanders and misappropriation of funds (our money) going on in councils nowadays that all councils are just rotten to the core.

they became a city and closed the airport…lol…sorted.

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The ‘Rotten Boroughs’ column in the Private Eye shows that there is a real problem in many councils. Entrenched parties who are in charge for decades, regardless of left or right, do seem most susceptible to these issues. However there is also a problem of a disconnect between councils, counsellors, and the people of a district. Voting is terribly low in local elections. Very few people seek to stand as a counsellor outside party activists. Large councils fail to connect with small communities. I’m not sure the complexity is the issue as the range of responsibilities councils have to deliver is so wide that complexity seems inevitable.
What goes on in other countries?

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There’s the rub - people are willing to complain about local councils but only idealists and activists with time on their hands are willing to spend time in the chamber, on committees and on the streets.

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then Doncaster broke away from their norm and voted in a maveric mayor who did untold damage…lol… the first thing he did was cut the mayors salary, now that impressed everyone… but then he never mentioned that he cut to the maximum that he could earn before it effected his headmasters pension…he cancelled the fianancial times and all the daily papers and instead got ‘The Racing Post’ or some racing paper. he ordered the old oak trees on the golf course be cut down because from his seat in the racecourse stand he couldnt see the horses racing ‘out in the country’ even when it snowed and the pavements in town were sheets of glass he refused permission for the guys cutting down the trees to be allowed to clear the snow/ice from the towns pavements… the rest of the UK thought he was a fine example to their ellected Mayors… what a croc…

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I had not heard this story. So I did a quick search on the background and events. I think you are referring to Peter Davies who was mayor from 2009 to 2013. He actually stood as an English Democrats candidate in 2009 and only left this party in 2013. He very, very narrowly beat an independent candidate in 2009. The English Democrats are a far right wing nationalist party. I’m sure the people of Doncaster knew that voting for this party was going to work out splendidly. Peter Davies does not believe in global warming, wanted to ban Doncaster’s gay pride event, does not believe in political correctness (another way of saying he like using offensive terms), praised the Taliban for ordering society (presumably meaning he want women to stay in the kitchen). Either this reflects the views of your average person in Doncaster or they got conned. I’m not sure which is worse.

lol voting is a con, it shouldnt be but it is they promise you the world, get elected and ignore everything they promised, there should be something in place that when they lied to the electorate they should be prosecuted. example?
i have a friend who lives in India and gets his old age pension every month, i know people in Canada who get a partial pension [depending on their contributions] and yet
during the Scots indenendance Referendum Blair Brown and Darling went round Scotland telling pensioners that as soon as Scotland declared Indepenence their old age pensions would cease… these three should be stoned never mind prosecuted

Its dismal that voting is held in such low regard. I see your point but I do not think it is always quite as bad as you describe. Mostly we vote for a political party who set out broad aims, changes of direction and policies. To an extent these are put into place during their terms of office - ok, never fully, often different from commitments, etc. But the principle goals are often stepped towards. This is for nation wide elections.
Local elections are different - I do not see how a left leaning local party can deliver on promises if a right leaning central party holds back funding, for example.
Worse are referendums. Especially ones without a clear definition of the yes/no outcomes. No-one is held to account, ever. So everyone feels free to make whatever claim they feel they need to make. I’m not sure stoning is the right answer for this behaviour but perhaps the opposite of a peerage. Precede their name not with ‘Sir’ or ‘Lord’ but with ‘Liar’ and make it compulsory to be used at all times.

how about if we use little stones

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