By Julie Walton, Socialist Alternative Leicester
In September, Birmingham City Council joined an increasing list of local authorities to issue a Section 114 notice (bankruptcy, in layman’s terms). According to the website In Your Area, “recent budget data reveals that nearly 100 other local authorities in England carry an even greater debt burden.”
Jonathan Carr-West, Chief Executive of the Local Government Information Unit (LGIU) argues that the current funding system “is driving dozens of councils across the country to financial ruin” also adding that “central government has kept councils living from hand to mouth and from year to year for far too long… unless something changes it won’t be the last.”
Local government in crisis
He is correct – Birmingham isn’t the only council to have filed for bankruptcy. Among others are Northamptonshire in 2018, Slough in 2021, Thurrock in 2022, Croydon in the same year and Woking in 2023. These bankruptcies and council cuts are going to mainly affect working class people and areas of the cities. Cuts to housing and lack of affordable council or social housing means that many people are facing homelessness, or inadequate housing that is unfit to live in – never mind the fact that most people who rent have seen their rents increase in this cost of living crisis.
Cuts to libraries and Sure Start centres affect the people who use these services. The UK has a nursery provision crisis too, where there are either not enough places or it is too expensive to use. This has impacted mainly working class women who have had to either cut back on hours they work or leave their jobs in order to look after their children.
Unfortunately, rather than launch a struggle to defend local services, Labour councils like Birmingham have refused to take a stand against more than a decade of cuts.
Lifting the cap on bonuses for the rich
With food costs and energy costs growing, and hourly wages not keeping up with inflation, people are increasingly angry with the lack of support and action from their representatives in government. And now we have seen the cap on banking bonuses lifted by Rishi Sunak in late October. The TUC has rightly accused the government of promoting a ‘greed is good’ culture among bankers who will be able to cash in on unlimited bonuses. The cap was introduced in 2014 to curb risk-taking in the wake of the global financial crisis, but bankers were still able to claim twice their base pay in bonuses, giving the City workers an opportunity to pocket as much as £120,000 in extra payouts.
Compare this to the average pay of a care worker (£17,780), or even the median salary for a UK worker (£33,000). Many of these workers were described by the Tories as ‘selfish’ for striking for an above-inflation pay rise – it is clear which side this government is on.
While working-class people see our pay and public services ground down, the UK’s richest are making a fortune! The wealth exists to end the crisis in council funding, for immediate investment into services like childcare, housing, and transport, and for a real pay rise for all workers. But to do that, we need to build a movement to tax the rich and take control of the wealth currently being hoarded by a tiny elite. What’s more, the big banks, alongside the big corporations which are raking in record profits, should be nationalised under democratic control of working class people in order to lay the basis for a socialist society in the interests of workers, youth and the planet.