It’s all about money & power: fund local communities, then empower them
We all want communities that are empowered and thriving. But over the last century, money and power has been stripped away from our communities. As the UK’s system of finance, exploitation, and massive inequality falls into entrenched crisis, our local governments have been taken down with it. The result is we’re all poorer, powerless, and watching our services fall apart. We can avert more bankruptcies by demanding the Chancellor fund local governments in what may well be the last budget ahead of the General Election – but to really change this, we need to empower communities with new models of local government.
We’ve all seen the headlines about the imminent collapse of local government – and even if you haven’t, you’ve seen your local council gradually fall apart, slowly at first, and then maybe all at once after the cost of living crisis hit. Local authorities all over the country, run by different parties, have been falling to bankruptcy and there’s a total agreement on the cause of the crisis: cuts since 2010 have decimated local governments. So clearly, we need to restore funding to local governments, but the roots of this go back much further: it’s only possible to decimate local government like this because our local government has been uniquely disempowered over the 20th and 21st centuries.
Empowered and independent local governments in the global north have introduced universal childcare and free public transport, reinvented their local economies after de-industrialisation or how public space is used. In the UK, local authorities must bid for central government funding to remove chewing gum.
However, just being in line with other countries is still not enough. The UK’s inequality crisis is among the worst in the developed world, but devolution alone is no barrier to inequality: the USA is far, far worse off, despite strong state and local governments. European economies have seen increasing levels of inequality and their social contracts have struggled with neoliberalism despite more equitable funding and powers for local governments.
This is also at the heart of why the UK has struggled to change course, despite the vow of governments from Thatcher onwards to devolve power to local levels: simply creating more layers of politicians and bureaucrats is not the answer. It’s all about power and money: both need to be in our hands.
Let’s take the City of Westminster, a London borough, as an example. Westminster contains many of the UK’s most expensive streets and most expensive homes, the second-highest disposable income in the country, and many of the UK’s billionaires. Large areas of it are owned by the Duke of Westminster, who inherited £9bn worth of property in 2016 (without paying inheritance tax). Russians accused of corruption alone own nearly £430m more property in Westminster, according to work by Transparency International. Huge amounts of money slosh around Westminster; so much that you can almost smell it in the air. Westminster Council, meanwhile, has kept their council tax the lowest in the country, and frozen throughout the cost of living crisis. Surely this is the well-run, efficient local government politicians keep talking about?
Take the 36 bus through Westminster and you’ll see for yourself. Starting in Pimlico, you’ll go through Knightsbridge and Belgravia, which enjoys the UK’s lowest rate of child poverty at under 5%. In a matter of streets, you’ll see incomes, outcomes, and life expectancy drop to some of the UK’s worst. As the bus goes along Edgware Road, in the north of the City of Westminster, it passes Church Street ward. It’s the most densely populated council ward in the UK and in the top 10% for most deprived. The premature death rate in Church Street is 50% higher than the UK average, the disability rate nearly twice London’s. After only 15 minutes on the 36 bus, you’re in a ward where half of all children grow up in poverty. Westminster City Council may have kept Council Tax the lowest in the UK, allowing a £20m home to pay less in tax than a 2 bedroom terrace in Nottingham, but it also cut funding for youth services by 91% from 2015-2019.
This isn’t to condemn Westminster Council, which is operating by the rules our centralised government and unrepresentative police system has created over 50 years. It’s to say that for anyone in Church Street to benefit from the enormous amounts of money in Westminster, or to rebuild our communities anywhere else in the country, we need new models that genuinely hand power to the people.
This doesn’t need to be as radical a break as it sounds. Many of these models have been tried or implemented to various degrees; we just need to roll them out.
On a micro level, for example, the spending power local governments already have could be used more effectively by investing in local people. Social procurement – requiring some element of local spending to be on services provided by local businesses and communities – has been embraced by cities from Preston to Plymouth, and has been hailed as a success that should be copied.
Much of the infrastructure built by local governments has been sold off and is essentially unrecoverable. Thanks to rising property prices, it will be difficult for local governments to buy back public spaces, even if properly funded. Instead, we should encourage the development of multi-use community spaces. If designed flexibly, for example with reconfigurable spaces (allowing for say a classroom in the day time and a theatre at night), local governments could rapidly begin providing the kinds of services we need to create a more equal society.
Even better, these spaces could be future-proofed – not just in how services are provided from them – but in how they are owned by handing assets over to co-operatives or community land trusts, safeguarding them from future austerity drives.
Encouraging greater development of a real community economy is another crucial element for a future, more equitable form of local government. Co-operatives, owned and managed by the employees, can help keep profits within the local area (by reinvesting back into the community) This could include retail co-ops, producer co-ops, worker co-ops, and more. Similarly, Community Land Trusts are non-profit, community-based organisations designed to ensure community stewardship of land. Communities can use CLTs to acquire and manage land and to create affordable housing, commercial spaces, and urban agriculture.
This would create a genuine community-owned, community led segment in local economies in a way that creating further layers of politicians cannot. It addresses one of the key complaints that people have about neoliberal societies: that they cannot take any control over their own lives.
But those political systems also need to be cracked open, allowing people a real say. As well as electing representatives, there’s a big role that methods like participatory budgeting can play. This process allows the community members to decide how to allocate part of a public budget, giving them a direct say in the financial governance of their community.