Electoral Dysfunction: Budget did little to defuse ticking time bomb for local councils

Published

2 years ago

March 8, 2024

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All my bandwidth this week has been given over to the spring budget, the moment of the year when Chancellor Jeremy Hunt tells us his plans for the economy – how he’s going to cut our taxes, or increase and set out where he’s going to spend some of our money.

But this week was a tale of two budgets: the one obsessed over in Westminster and then the budget of Birmingham Council, which has huge repercussions for the city’s one million plus population.

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I didn’t think much about the Birmingham story over the past few days as I joined the rest of the Westminster village in obsessing about whether the chancellor was going to cut national insurance or income tax, administer further public spending cuts to boost tax giveaways (and give a future Labour government a headache) or nick the opposition’s plan to abolish tax breaks for so-called wealthy “non-doms” who live in the UK with a permanent home overseas (FYI: Hunt didn’t shave more off future spending plans but they did nick Labour’s plan to scrap non-dom plan to raise £2.7bn for tax cuts).

But the dire situation of many councils across England is perhaps what is closer to the hearts of our Electoral Dysfunction listeners.

Sure the national budget matters hugely in setting the economic direction of our country and deciding on what public services with prioritise.

But local council budgets service much of our daily bread and butter: Our bin collections, childcare services, adult social care, leisure centres, parks and libraries, our carparks and road maintenance.

Between 2010 and 2020, local government fund suffered a 40% real terms cut in grants from central government.

In December nearly one in five council bosses said they thought it “fairly or very likely” they will go bust in the next 15 months as funding fails to keep pace with inflationary costs, and rising demand for a raft of services – be in child protection or adult social care.

And it was Hayley’s email that landed in our Electoral Dysfunction inbox that pulled my attention out of Westminster.

Hayley, who has been an officer in local government for the last 20 years, emailed in to talk about how “the last few years have been difficult”.

“In a district council setting, that I have always been incredibly proud to work in, I’m now left feeling like I might need to move on – mentally exhausted, emotionally drained,” she said.

“It’s impossible to feel like you are delivering anything meaningful because of reducing finance and increasing demand.

Good people are leaving and the public perception is at an all low – and I have a huge amount of sympathy for that.”

She added: “I’d love to know Jess and Ruth’s view on the present state of local government, what they think the future holds – and what they think the current government’s intentions for local government are.”

It’s so pertinent this week, because this was the moment, away from Westminster, that Birmingham City Council – the city in which Electoral Dysfunction’s Jess Phillips is an MP, signed off £300m in cuts ahead of a 21% rise in council tax over two years, after declaring itself effectively bankrupt.

Financial measures described as “devastating” to people living in the city, Europe’s largest local authority could not afford to meet its financial obligations – after facing equal pay claims of up to £760m, and an £80m overspend on an under-fire IT system.

Jess, who knows the Birmingham situation all too well, talks about how councils – and this is not politically party specific – have been “massively defunded” but also says “as somebody who lives in Birmingham”, the [Labour-run] council has not been well managed.

Ruth says local government is the “bit of politics that affects people’s lives 100 per cent” and thinks the largest council in all of Europe going bust “should have been a bigger story”.

She also points out that Scotland’s local government is funded by Holyrood, where the row between central and local government over funding is very much live.

We are, says Jess, “sitting on a time bomb” with vulnerable children and adults struggling to access services now, that will only service to build up a bigger bill later.

Communities secretary Michael Gove last month announced a 6.5% increase in funding for local councils in England, but the £64bn settlement is unlikely to quell fears of a wave of de facto town hall bankruptcies, with the Local Government Association saying it was not enough to meet “severe pressures”.

The budget in Westminster did little to defuse this ticking time bomb on Wednesday.

The Institute for Government concluded in its budget wash up that the Conservative administration would “bequeath a dismal public services legacy to whoever wins the general election”, adding “it is also likely that more local authorities could issue section 114 [bankruptcy] notices, necessitating further painful cuts to services.”

Problems likely to be passed to Labour should they win the next general election.

But it’s going to get much harder for Westminster to ignore the continued problems of local government budgets if more council dominos continue to fall, especially in an election year.

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Politics

PM issues warning to European leaders ahead of ECHR talks

Published

26 mins ago

December 10, 2025

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PM issues warning to European leaders ahead of ECHR talks

Sir Keir Starmer has called for a tougher approach to policing Europe’s borders ahead of a meeting between leaders to discuss a potential shake-up of the European Convention on Human Rights (ECHR).

The prime minister said the way in which the ECHR is interpreted in courts must be modernised, with critics long claiming the charter is a major barrier to deportations of illegal migrants.

His deputy, David Lammy, will today be in Strasbourg, France, with fellow European ministers to discuss reforms of how the agreement is interpreted in law across the continent.

In an opinion piece for The Guardian, Sir Keir and his Danish counterpart, Mette Frederiksen, said the change was necessary to prevent voters from turning to populist political opponents.

What’s the issue with the ECHR?

The ECHR, which is the foundation of Britain’s Human Rights Act, includes the right to family life in its Article 8.

That is often used as grounds to prevent deportations of illegal migrants from the UK.

There has also been a rise in cases where Article 3 rights, prohibiting torture, were used to halt deportations over claims migrants’ healthcare needs could not be met in their home country, according to the Home Office.

The Conservatives and Reform UK have both said they would leave the ECHR if in power, while the Labour government has insisted it will remain a member of the treaty.

But Sir Keir admitted in his joint op-ed that the “current asylum framework was created for another era”.

“In a world with mass mobility, yesterday’s answers do not work. We will always protect those fleeing war and terror – but the world has changed, and asylum systems must change with it,” the two prime ministers wrote, as they push for a “modernisation of the interpretation” of the ECHR.

What is happening today?

Mr Lammy is attending an informal summit of the Council of Europe.

He is expected to say: “We must strike a careful balance between individual rights and the public’s interest.

“The definition of ‘family life’ can’t be stretched to prevent the removal of people with no right to remain in the country [and] the threshold of ‘inhuman and degrading treatment’ must be constrained to the most serious issues.”

It is understood that a political declaration signed by the gathered ministers could carry enough weight to directly influence how the European Court of Human Rights interprets the treaty.

The UK government is expected to bring forward its own legislation to change how Article 8 is interpreted in UK courts, and is also considering a re-evaluation of the threshold for Article 3 rights.

The plans have been criticised by Amnesty International UK, which described them as weakening protections.

“Human rights were never meant to be optional or reserved for comfortable and secure times. They were designed to be a compass, our conscience, when the politics of fear and division try to steer us wrong,” Steve Valdez-Symonds, the organisation’s refugee and migrant rights programme director, said.

Sir Keir’s government has already adopted several hardline immigration measures – modelled on those introduced by Ms Federiksen’s Danish government – to decrease the number of migrants crossing the Channel via small boats.

Starmer-Macron deal ‘a sticking plaster’

Meanwhile, French far-right leader Jordan Bardella told The Daily Telegraph he would rewrite his country’s border policy to allow British patrol boats to push back small vessels carrying migrants into France’s waters if he were elected.

The National Rally leader called Sir Keir’s “one-in, one-out” agreement with Emmanuel Macron, which includes Britain returning illegal arrivals in exchange for accepting a matching number of legitimate asylum seekers, a “sticking plaster” and “smokescreen”.

He said that only a complete overhaul of French immigration policy would stop the Channel crossings.

Mr Bardella is currently leading in opinion polls to win the first round of France’s next presidential election, expected to happen in 2027, to replace Mr Macron.

Politics

Trump to begin interviews with Fed chair finalists this week: FT

Published

3 hours ago

December 10, 2025

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Trump to begin interviews with Fed chair finalists this week: FT

The race for the new US Federal Reserve chair is nearing the finish line, with US President Donald Trump reportedly set to begin interviewing finalists for the top job this week.

According to a report from the Financial Times on Tuesday, Treasury Secretary Scott Bessent has presented a list of four names to the White House.

One of these is former Fed governor Kevin Warsh, whom Bessent is scheduled to meet with on Wednesday. Another is National Economic Council director Kevin Hassett, who is seen as the frontrunner for the role.

Another two names would be picked from a list of other finalists, which includes Fed governors Christopher Waller and Michelle Bowman, and BlackRock chief investment officer Rick Rieder.

Trump and Bessent are expected to hold at least one interview next week, as a decision looks likely to be announced in January.

However, Trump has revealed he already has his eye on one particular candidate.

“We’re going to be looking at a couple different people, but I have a pretty good idea of who I want,” Trump said to journalists on Air Force One on Tuesday.

Kevin Hassett is a frontrunner for Fed chair role

The upcoming round of interviews suggests that Hassett may not be the clear lock in for the role as previously thought, though he is seen as the favorite.

Earlier this month, prediction market odds on Kalshi and Polymarket shot up for Hassett significantly following comments from Trump at the White House on Dec. 2.

While welcoming guests, Trump labeled Hassett as “potential Fed chair” leading many to assume the president had let a major hint slip.

With Hassett’s odds spiking to 85% after Trump’s comments last week, they have since declined to around 73% for Hassett, while Warsh’s odds sit at 13% on Kalshi at the time of writing, which has floated around this range over December.