Fighting for the future of local government

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2023 National Local Government Service Group Conference
15 February 2023

The last thirteen years of austerity have decimated local government budgets, meaning councils are struggling to provide the services that the communities they represent need and are failing to give local government workers the job security and pay rises they need and deserve.

Rather than responding to the crisis facing local government by increasing funding, the Chancellor chose to freeze funding in cash terms, while inflation continues to push up prices and demand for services. Furthermore, much of this funding requires councils to increase council taxes on residents already struggling to make ends meet.

Research by UNISON shows that UK councils face a collective funding gap of £3.145billion across all councils in 2023/4. This means that councils will need to cut more services, as well as using dwindling reserves and borrowing to make up the difference unless more funding is forthcoming. This is only going to get worse – the cumulative funding gap for 2023/4 and 2024/25 rises to over £5bn. The research conducted by UNISON found that 86% of councils in England, Wales and Scotland have a predicted budget gap.

The responsibility for the funding gap lies squarely with the Westminster government. The Westminster government controls how much is sent to local authorities in England, while in Scotland and Wales both the Westminster government and devolved governments take responsibility for distributing dwindling local government budgets.

Local authorities are left to try and raise some of the shortfall themselves through local taxation – but local tax varying powers are unfair and inadequate. Council tax bands in England are still based on property values in April 1991 and reform is long overdue. While the Welsh government took the positive step of undertaking a review of council tax, the governments in Westminster and Holyrood have kicked the issue into the long grass. Additionally, business rates punish physical shops and businesses while allowing online companies to profit.

As well as seeing their budgets squeezed, councils across the country are facing huge reorganisation as new devolution deals and combined authorities change the face of regional and local government in England, and Holyrood pursues a centralising agenda in Scotland. UNISON Scotland has undertaken important work with the Jimmy Reid Foundation on countering Scottish government centralisation of local government.

In Autumn 2022 of a new wave of devolution deals in Suffolk, Cornwall, Norfolk, and the Northeast were announced, following the conclusion of talks with council leaders in August 2022 in North Yorkshire and the East Midlands. Over half of England will soon have a directly elected mayor, while the Levelling Up and Regeneration Bill seeks to expand the devolution framework and enable the creation of County Combined Authorities in England through new devolution deals.

Power shouldn’t be hoarded in Westminster or devolved governments, but it is important to engage in debates on English devolution to ensure that these deals deliver for everyone, and that local government staff do not lose out. It is also important to continue making the case that not only should Westminster increase local government funding to devolved nations, but that devolved governments in Holyrood and Cardiff Bay should be held to account on how they choose to distribute funding and power to councils.

It’s also critical that the local government workforce is involved in developing plans. Conference believes that the local government service group’s campaigning in this area should be based on the following principles:

1)Full consultation with local government workers and the public on any devolution deals, so they are not imposed on an area;

2) Devolution deals should not result in any job losses, erosion of terms and conditions for staff, outsourcing of services or reduction in collective bargaining rights. Regional and city-level devolution should give greater union representation on regional bodies including regional pay negotiations;

3) Devolution deals should include a predictable, secure and sufficient funding stream based on need and above-inflation pay rises for workers;

4) Devolution deals should not be at the financial expense of the provision of public services in the region or in other regions not included in the deal, and should not impose any preconditions over the implementation of public services;

5) Devolution deals should form part of an equitable constitutional settlement – meaning there should not be a ‘race to the bottom’ on local/ regional taxes or regulations and funding should be allocated based on need not as part of a reductive competition for inward investment between places.

Conference calls on the Local Government Service Group Executive to develop resources to support branches, regions and activists to apply these principles in any local discussions on devolution deals.

Conference also calls on the Local Government Service Group Executive to develop forward-looking proposals on local government funding to support pay campaigns including:

a)Working with the TUC, the WTUC, the STUC and ICTU, Labour Link and other like-minded organisations to develop progressive alternative models of local taxation, campaign for regressive taxes such as council tax and business rates to be scrapped in favour of fairer alternatives, and make the case for greater redistribution from the centre based on community and workforce needs;

b) Commissioning analysis into the funding needs for local government to deliver in these areas on top of delivering good quality statutory services, and to enable UNISON to lobby for a credible, forward-looking and needs-based funding settlement that is greater than 2010 levels;

c) Writing to ministers setting out UNISON’s principles for English devolution and asking for trade unions and the local government workforce to be represented in any devolution negotiations.