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Tony Travers: the magic money tree will bear councils few fruit

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‘An end to austerity’ appears to be one of the many implications of the general election. 

The Democratic Unionists campaigned for retention of the triple-lock on state pensions and winter fuel allowances, while many Conservative MPs privately report that Labour’s breezy promise of higher government spending was popular with voters fed up with public sector pay constraints and service cuts.

So the magic money tree will produce fruit after all. Or will it? The truth is, that unless chancellor Philip Hammond now agrees to push up the UK’s deficit, there is little or no room for largesse. We are more than seven years out from the coalition’s first efforts to reduce the deficit to zero, and austerity is still required to drive the number down. But even if Mr Hammond was willing to allow flexibility about government borrowing (ie to allow it to drift upwards) there is little room for substantive spending increases.

After seven years of cuts, local government spending is 30-40% lower than in 2010. Entitlement to social care has been rationed, refuse is collected less frequently and potholes are deeper. The starting-point for any ‘increase’ is one where public squalor is increasing by the day. There is no chance whatsoever that the government could reverse cuts made so far. Indeed, for services other than adult social care, council spending is heading downwards at least until 2020.

The NHS and schools, along with state pensions, will get the first tranche of any cash from a ‘post austerity’ spending spree. If it happens, that is. Northern Ireland will have to be given extra cash, whatever happens. Scotland is also in a good bargaining position. But local government never is. Unless the sector’s lobbyists can articulate a case for their share of any additional resources, there is a risk that austerity is softened for central but not local government services.

Local authorities can use their MPs to put pressure on a minority government. This was done before about ‘academisation’ and school funding. The consequences of further cuts to council services may create local conditions which convince voters that austerity is never-ending and that might just carry Jeremy Corbyn into Downing Street.

Tony Travers, director, LSE London

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