Thirty years ago, Neil Kinnock electrified the Labour party conference with his denunication of the “grotesque chaos” of Liverpool council’s defiance of the Thatcher government. “I am telling you,” the Labour leader thundered, “no matter how entertaining, how fulfilling to short-term egos – you can’t play politics with people’s jobs and with people’s services or with their homes.”
It’s a message that resonates still with Joe Anderson, Liverpool’s executive mayor, as the council contemplates its options for absorbing the further draconian funding cuts expected in this parliament. “We’re looking over the abyss,” he says. “In 2017, we fall in.”
Liverpool is taken to be one of “12 to 14 councils that are very close to the edge now”, in the words of Gary Porter, the Conservative peer who chairs the Local Government Association. They are not all Labour-led: some of the deepest concerns surround Tory-run Northamptonshire, which is falling more than halfway short of its savings target this year.
In respect of Labour councils like Liverpool, however, there are always going to be suspicions of posturing; and with Liverpool’s history, suspicions that it wants to engineer the kind of confrontation that in the 1980s involved the council’s leadership, key figures of which were supporters of the Militant faction, refusing to set a balanced budget and being surcharged and barred from office.
Anderson is no Derek Hatton, one of the chief targets of Kinnock’s attack in that 1985 speech. Indeed, the mayor tells me that he last week assured Labour leader Jeremy Corbyn, who was visiting the city, that Liverpool would not consider setting an unlawful budget that would allow “some Whitehall mandarin to come in to run the city and cut without the values and principles we hold to”. But he stresses that even Corbyn was shocked by the council’s plight.
When Anderson became leader of the authority in 2010, two years before he became mayor, it was spending £222m a year on adult social care services. Today, it spends £172m. By 2017, it will be £150m – a further cut that, he says, will mean reducing the number of people receiving care packages from 15,000 now to 9,000.
After 2017, he maintains, the council will not only have no money for any discretionary services beyond what it is legally required to deliver, but “we will also have to cut some statutory services”. Scaremongering? The council’s auditors, Grant Thornton, put it almost as strongly: “It is possible that during 2017/18 the council will no longer have sufficient funds to deliver any discretionary services. A tipping point could be reached in 2018/19 when the council could struggle to fund all its mandatory service provision.”
Liverpool’s special problem is that it raises only 10% of its total £1.3bn funding through council tax, owing to the city’s low property values, which makes it particularly dependent on government grant that is being cut by 58% between 2010 and 2017.
Anderson has borrowed heavily to fund road repairs and to make investments designed to generate income, buying the famous Cunard Building in the city and taking a stake in its airport. He has also been drawing on the council’s reserves, something that ministers accuse councils of failing to do, but they will be down from £248m in 2010 to £37m in 2017, most of which is ringfenced for schools, insurance and legal claims.
With the council seemingly running out of road, it is perhaps surprising that Anderson wants to stand for re-election as mayor next spring. But he insists that with a regional devolution deal imminent, and with the local economy on the up, he is best placed to steer the city through the next four years and mitigate the impact of further cuts.
When Liverpool’s 1980s rebels took on Margaret Thatcher, they adopted the slogan of jailed councillors in Poplar, east London, in 1919, that it was “better to break the law than break the poor”. Anderson sees that as a false prospectus. But the more you look at the choices he faces, the more you think that Marx got it the wrong way round: history does repeat itself, but first as farce and then as tragedy.
