Councils are using their reserves to plug funding gaps. Here’s what that means

Surrey County Hall. We have no reason to suspect Surrey is running out of money, but it’s a nice building. Image: Getty

Local government is part of the fabric of our country. Councils are the ones who can make a difference to people’s lives by building desperately-needed homes, creating jobs and school places, providing dignified care for our elderly and disabled and boosting economic growth.  

But the money local government has to maintain these vital services is running out fast.

Councils have experienced disproportionately large reductions in government funding over this decade, in comparison to the rest of the public sector. Councils will have lost almost 60p out of every £1 the government had provided for services.

But what does this actually amount to? The bigger picture is that councils in England are now facing an overall funding gap of £8bn by 2025. And this is just to stand still and incorporate additional demand, and does not even take into account important improvements in local services and councils’ prevention and early intervention work. 

Very often it is those who are most vulnerable and need support across a range of services to improve life chances that rely on our local services the most. Pressures are growing in children’s services, adult social care, and efforts to tackle homelessness. This is leaving less and less money for councils to fund other services, like fixing potholes, improving roads and transport links, bus services and cleaning streets. 

It is unsurprising that more and more councils are struggling to balance their books. Money is increasingly having to be diverted from optional services, which help build communities people want to live in, to plug growing funding gaps, while some councils have already been forced to cut their services back to the legal minimum “core offer”. 

Some councils are facing a choice between using reserves to try and plug funding gaps or further cutting back local services in order to balance the books. This is unsustainable and does nothing to address the systemic underfunding that they face. Ongoing funding gaps facing local services are simply too big to be plugged by reserves. 


Reserves are used to make long-term investments, such as job-creating regeneration schemes, infrastructure projects and creating school places as well as to invest to save, for example in technology. Use of reserves can also help councils manage growing financial risks to local services, which is increasingly important given the financial uncertainty they face. 

Without a doubt, the Spending Review will be make or break for vital local government services. 

That is why the Local Government Association has launched its #CouncilsCan campaign to build support among the public, councils, parliament and central government for long-term investment in local government at that Spending Review.  

Local government needs a sustainable funding system which provides the resources councils need to deliver local services. With the right funding and powers, councils can continue to lead their local areas, improve residents’ lives, reduce demand for public services and save money for the taxpayer.

But while the funding is critical, our campaign is not just about asking for more money – it’s about highlighting how councils can achieve the best for their communities with the right powers and investment. In many cases councils have already got proven track records of how they have managed to keep successful local services running through improvement and innovation despite a lack of funding.  

And while these many examples show how councils are doing what can with what they have, many efficiencies and savings have now been made and the right powers and funding are needed for councils to make a positive difference to residents’ lives and continue to reduce pressures on the rest of the public sector.

Without urgent changes, it is the people who rely on and value council services that will suffer. Councils make our communities places we want to live in and people rightly look to their council to support them and their family and to be at the heart of their community. This campaign wants at put the issues councils are facing to the top of the government’s agenda. It is crucial that the government addresses the issues councils are facing in the upcoming Spending Review. 

Richard Watts is a Labour councillor for the London Borough of Islington and the chair of the Local Government Association’s Resources Board.

For more information on the #CouncilsCan campaign click here.

 
 
 
 

Jane Jacobs and Le Corbusier would agree on one thing: we need more social housing

Unite d’Habitation, Marseille. Image: Iantomferry/Wikimedia Commons.

Much has been written in CityMetric and beyond about the urban planning debates of the 1950s and ‘60s, that came to be characterised as a battle between master-planning and preservation. One side of the debate was personified by the father of modernist architecture, Le Corbusier, whilst the counter-argument was advanced by writer and journalist Jane Jacobs.

But when it comes to London’s housing crisis, aren’t there a few things that these two would actually agree on?

Jane Jacobs’ writing about the organic nature of self-organising communities, demonstrated, in her words, by the “intricate sidewalk ballet” of inner city neighbourhoods, should be required reading for anyone interested in how cities function. But today, Jacobs is increasingly invoked in attempts to oppose new developments of any kind. Her role in conceiving Manhattan’s West Village Houses, a low cost rented housing scheme built through New York State’s Mitchell-Lama Program, is unfortunately much less well known. It’s been suggested that if Jacobs were around today, she’d be working with New York’s housing activists. When her seminal work The Death and Life of Great American Cities was written, there were almost 2 million rent-controlled or rent-stabilised apartments in New York City; nowadays, there are fewer than half that number.

Le Corbusier, on the other hand, is too often blamed for drab high-rise blocks. But regardless of how well his followers across Europe interpreted his ideas, Le Corbusier’s vision for cities was about high quality residential blocks that also contained shops and leisure amenities and were surrounded by parkland – the original mixed use development if you like. His most famous building, Marseille’s Unite d’Habitation, consisted of 337 apartments with views of the mountains and the sea together with shops, a restaurant and a nursery school. The building was originally intended to be public housing, but the French government eventually sold off the flats to recoup costs. Alton West Estate in Roehampton and Park Hill in Sheffield are just some of the examples of Le Corbusier’s influence on the design of post-war council housing here in the UK.

Building homes for a serious business in post-war Britain. Under Attlee’s 1945 Labour Government, 700,000 new council homes were completed. In 1952, the largest architectural practice in the World was at London County Council, with 1,577 staff including 350 professional architects and trainees. These were the days of consensus, and very quickly Tory governments were actually competing with Labour governments about who could built the most council homes.

Some of the council homes built post-war have stood the test of time better than others. But what’s not in doubt is that building council homes on such a scale immeasurably changed the lives of so many families in desperate need of a decent, secure and affordable home. And so many of the post-war modernist high-rise blocks so despised by Jacobs quickly took on the organic self-organising traits that she held in such high regard and have become some of the most enduring and closely-knit communities in London.

Fast forward to 2019 and Right To Buy continues to decimate council housing stock, but perversely home ownership seems more out of reach than ever for so many. An entire generation is being forced to embrace long term private ting in a country that has some weakest protections for private tenants in Europe. Meanwhile, government spending on building new homes fell from £11.4bn in 2009 to just £5.3bn in 2015 – from 0.7 per cent to 0.2 per cent of GDP – and since then, the housing minister’s desk has been occupied by no fewer than six people.


So what would a comprehensive drive for new council and social housing on the scale of the 1945 government’s efforts look like in 2019?

Lubetkin, the architect responsible for Islington’s Spa Green Estate and Bevin Court, summed up the spirit of post-war council home building with his maxim that “nothing is too good for ordinary people”. It’s a vision that we’re trying to recreate through our own council home building programme in Islington.

One of the best opportunities for small council home building schemes is to expand upon existing communities. The vast majority of Islington’s new council housing takes the form of infill, construction on existing estates; in unloved spaces, in old garages, and in old undercrofts. These projects often involve landscaping and new amenities to enhance rather than reinvent local communities. We have built community centres and even rebuilt a library as part of council housing schemes. One Tenants’ and Residents’ Association had an idea for a new specialist over 55s block for the older residents of the estate who wanted to stay in their community.

But there’s a place for large-scale place making as well. When the Ministry of Justice closed Holloway Prison and announced that the site would be sold, Islington Council published a Supplementary Planning Document (SPD) on the site. We had one aim – to send a clear signal to the market that anyone who was looking at buying the site needed to be aware of their planning obligations. Most importantly, any development on the site needed to include at least 50 per cent genuinely affordable homes. The speculation around the site came to an end on 8 March this year when Peabody Housing Association announced that it had bought it. It has committed to going well above and beyond our planning requirements, by making 600 out of a total 1000 homes genuinely affordable homes, including 420 homes for social rent. We need to see more detail on what they are proposing but this is potentially brilliant for the borough. A local grassroots group, Community Plan for Holloway, have been instrumental in ensuring that the community’s voice is heard since the site was sold.

To recreate the scale of the massive post-war council home building programmes would require a Jane Jacobs inspired level of community activism combined with the architectural idealism of Le Corbusier. But it would also need the political will from central government to help local authorities get council housing built. And that, sadly, feels as far away as ever.

Diarmaid Ward is a Labour councillor and the executive member for housing & development at the London Borough of Islington.