The March Toward Austerity

Things seem to be moving in Boris Johnson's direction. John Harris writes:

It may be neither fair nor particularly rational, but in the past three weeks or so Boris Johnson and his allies have been buoyed up by rising public optimism. Thanks to the vaccination programme and the expectations swirling around the somewhat provisional back-to-normal date of 21 June, the government’s dire handling of so much of the pandemic has receded from view.

The prime minister looks both very lucky, and a more formidable leader than he seemed in the grim days of late 2020; Keir Starmer seems to have stalled. Meanwhile, even people with an understandably cautious sense of the immediate future can surely warm to the prospect of packed pub gardens, revived music festivals and family reunions.

But one shouldn't be too quick to jump to conclusions. Rishi Sunak, the man in charge of Britain's finances, isn't sounding very generous. He says that "government borrowing to finance greater spending is 'morally, economically and politically' wrong. Indeed, in Wednesday’s budget the chancellor will reportedly pledge to keep a tight grip on day-to-day spending, introduce tax rises and point towards an eventual fiscal reckoning."

So the March Towards Austerity continues. The consequences have been catastrophic:

Despite some emergency help from central government, the financial gaps that councils are facing remain huge – and urban areas seem to be particularly affected. Manchester city council is facing cuts in the next financial year of £41m; in nearby Bolton, the figure is £35m. The London borough of Newham will put through “cuts and savings” of £43m by April 2023, £30m of it this year. The council in Leeds is now facing mind-boggling economies of £87m, the single biggest amount to be taken out of its spending since the start of austerity – and which, according to the city’s new leader, James Lewis, could be followed by further cuts of as much as £60m unless the government takes decisive action. As he told me last week: “It means that any ambition we have to do anything other than the basics will be really limited. It’s an incredibly grim picture.”

The path that has led to all this is plain enough. Unlike the government, councils have to set balanced annual budgets for spending on services. Over the last decade, the money they receive from the centre has been cruelly hacked back. Ever-changing Tory plans for local authority funding have made them more and more reliant on council tax and business rates – both of which have been squeezed by the pandemic. Now, the social crises let loose by Covid are putting renewed pressure on the most essential services, not least help for older people, those with disabilities and at-risk children.

The result is something that almost defies belief: despite everything we know about the inequalities highlighted by the pandemic, and the vital role councils have played in dealing with it, the dire local cuts that have defined the last decade are grinding on.

And Johnson is confident that he's doing the right thing.

Image: Bloomberg.com