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Tony Travers: Ministers cannot continue with austerity plans after Grenfell

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The Grenfell Tower fire represents a tragic failure of government. It has also become totemic of the stresses put on public provision by decades of pressure to minimise taxation and spending.

Government has been seen to fail partly because there appear to have been deficiencies in the management and regulation of the tower block, and also significant obscurity about who is responsible for what. Different levels of government are involved and the public cannot work out who to hold to account. Central government required social housing be provided at arms-length from councils, creating a further degree of complexity.

The response to the catastrophe was perceived by those affected to have been inadequate. Perception is reality. Both local and national government have come in for blame and will do so again when more facts are known. After the initial period, the London boroughs’ mutual aid arrangements have been effective. Whitehall, after a slow start, has provided cash for households affected. But none of this can disguise the implications of the horror on the London skyline.

Money is not the only issue, but the pressure on councils such as Kensington & Chelsea RBC in recent years cannot be ignored altogether. The borough’s revenue spending fell by 38% in real terms between 2009-10 and 2016-17. Central government determines these figures by the control of council tax, grant allocations and business rates. Other London and metropolitan councils have faced similar or bigger cuts.

It would be amazing if the capacity of local government’s core machinery had not been affected by the decision to protect much of the rest of public expenditure by applying disproportionate cuts to local councils. Similarly, the decision to abolish the Audit Commission, with its regulatory oversight of management capacity, is another line worthy of inquiry.

Sajid Javid now faces a stark choice. The government’s current plans show local government spending for services other than adult care dropping by 6-8% in real terms between 2017-18 and 2019-20. At the end of this, the ‘fair funding review’ would redistribute resources, producing many further losers. It would be a foolhardy government which now carried on as if nothing had changed.

Tony Travers, director, LSE London

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