Complete Hunt: the Chancellor on his way to the Commons yesterday. His Autumn Statement does nothing for teachers, the NHS or local councils
TV politics pundit ANDREW FISHER, pictured right, 
assesses the fine detail of the Chancellor’s Autumn Statement, and amid the tax giveaways for the already wealthy, identifies the glaring gaps in financial provision for the NHS, teachers and local authorities like cash-strapped Croydon
The NHS is in crisis, there’s an acute teacher shortage in schools, child poverty is rising and, in Croydon and across the country, councils left, right and centre are in a state of financial collapse.
Yet in his 52-minute Autumn Statement delivered to the House of Commons yesterday, Chancellor of the Exchequer Jeremy Hunt did not mention local councils once.
But with a cheery smile for the cameras, Hunt did announce that he was slashing £12billion of taxes for business and that he was reducing disabled people’s benefits by £1.2billion.
Of course, not every policy detail makes it into the headline announcements, so I trawled through the full document from HM Treasury – all 116 pages – and the only commitment on council funding that I could find was an oblique reference to “funding simplification implementation”. Phase One of this includes a commitment to: “roll out a new designated departmental funding glossary page to make sure all bidding terminology has a consistent explanation to support authorities in any funding application process”.
Thin stuff: the Treasury’s document was full of holes…
Hang out the bunting! The crisis in town halls is over!
The Office for Budget Responsibility – the independent body which assesses the Government’s performance – contained a rather more pertinent fact, one that should have spurred Hunt into action. The OBR’s Economic & Fiscal Outlook document highlighted that, “since 2018, there have been 11 ‘Section 114’ notices issued by local authorities”.
As the good people of Croydon know only too well, Section 114 notices are issued by councils when they simply can no longer deliver services on budget. They are issued when the council is de facto bankrupt.
From 2000 to 2017, only two such notices were issued across the country. So something has gone very wrong in local government finance. This is not just a few cases of mismanagement, but a systematic collapse of councils across England, mostly caused by the central government defunding local services.
In advance of the Autumn Statement, the Local Government Association warned that councils in England had a £4billion shortfall in their budgets just to stand still. Commenting afterwards, LGA chair Shaun Davies said, “There isn’t a penny of extra investment into local government, so we think this is a missed opportunity.”
In recent days I’ve spoken to two councillors, from different parts of the country, who tell me their council is on the precipice and could soon join the likes of Thurrock, Slough, Woking and Croydon in issuing a Section 114 notice.
One of the pressures on councils is the rising levels of homelessness. More families are in temporary accommodation: it’s up 10% in the last year, with 131,000 children destined to spend this Christmas without a home to call their own.
Councils have a legal duty to provide a home for people who are homeless. This includes those evicted by private landlords issuing Section 21 notices, the so-called “no fault” evictions. Hunt’s Government promised to ban S21 notices in 2019. But they still haven’t done so.
Some brief respite was afforded by Hunt yesterday when he increased local housing allowance rates, which have been frozen for years. But the move still leaves the system far less generous than in 2010.
Banker: Andrew Bailey
Financial pressures on local councils will also be exacerbated as unemployment rises and therefore more households become eligible for Council Tax support. This, in turn, reduces the revenue paid into council coffers.
London Councils, the body representing the 32 boroughs in the capital, said: “Many are struggling to balance their budgets and the Autumn Statement leaves them teetering on the edge.”
More bad news for councils with large debts, like Croydon (£1.6billion, at the last count), came in the form of Bank of England Governor Andrew Bailey who said yesterday that it is “far too early to be thinking about rate cuts”. Bailey suggested thatb interest rates would likely stay at 5.25% for some time. Croydon Council’s “toxic debt”, as Mayor Perry likes to call it, won’t be helped by interest rates staying high.
There is apparently some thinking in Katharine Street that Croydon could issue its fourth Section 114 in three years, since there is no chance of balancing the books for 2024-2025 either – despite the Conservative Mayor and his cabinet member for finance imposing a 15% Council Tax rise during the worst cost of living crisis on record.
There was some good news on that.
Official: the squeeze in living standards has gone on for longer than at any time since 1955, according to the Office for Budget Responsibility
Although still the worst cost-of-living crisis on record (since at least 1955), it was not as deep as previously thought.
It’s not really good news, but when you’re a Conservative government that is 20 points behind in the polls, delivering zero growth, with rising unemployment, rising poverty and record NHS waiting lists, any crumb of comfort is worth clinging to.
The bad news, however, is that it has continued for longer than forecasts had originally predicted.
It was in his delusional mindset that Jeremy Hunt proclaimed this as “an autumn statement for growth”, even though the OBR revised downwards the nation’s economic growth prospects for 2024, and 2025, and 2026.
Hidden in the small print is that in future years, huge public spending cuts are already pencilled in. Among the hardest hit areas will be schools, whose core budget will fall by 1.2% a year after 2024 on current plans.
This is at a time when there is a teacher recruitment and retention crisis, leaving many pupils taught by either unqualified teachers or have their curriculum narrowed as schools struggle to recruit. At one local school, two separate year groups have this week been told to stay away because there simply are not enough staff to take their lessons.
In Croydon next year, schools will lose £10.3million of funding. That’s the equivalent to £207 being cut from the education spend for every Croydon schoolchild. You can see how your child’s school is affected on the schoolcuts.org.uk website.
Despite the longest waiting lists in NHS history, in Hunt’s announcement there was only an extra £25million found for next year – equivalent to 0.015% of the NHS budget. Much of the reason why more people are claiming disability benefits is because more people are stuck on waiting lists unable to get treatment.
Hunt’s solution to this was to cut disability benefits by £1.2billion a year by 2028. The Nasty Party never really went away.
The country remains mired in a low growth slump, with seriously underfunded public services and rising social need.
If this was a pre-election stunt, as was touted, then it has failed.
As well as the BBC’s Politics Live, Radio 4’s Today and various other broadcast outlets, Andrew Fisher is a regular guest on The Croydon Insider, the podcast that analyses the latest news from inside Croydon. Click here to listen to his contribution in this month’s episode (requires subscription)- From 2015 to 2019, Andrew Fisher was the Labour Party’s Director of Policy under Jeremy Corbyn. He is a former chair of the Croydon Central Constituency Labour Party. Fisher is also the author of The Failed Experiment – and how to build an economy that works, and now writes regular columns for InsideCroydon
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ROTTEN BOROUGH AWARDS: Croydon was named among the country’s rottenest boroughs for a SIXTH successive year in 2022 in the annual round-up of civic cock-ups in Private Eye magazine
I have been a staunch Tory voter for all of my life (and it has been a long one) next election I will be voting for Labour. Perhaps a change of Government is genuinely needed to shake up this decrepit system.
Are you sure?
The Tories only have 30% of all the councillors in Great Britain, and control only 30% of all councils.
Abandoning their core voters is nothing new for the Conservative government, as proven by their cynical attitude towards older people during the pandemic. Rishi “Dr Death” Sunak was quoted as saying the government should “just let people die”, while Boris Johnson said he’d prefer to “let the bodies pile high in their thousands” than have another lockdown.
Forcing mainly opposition councils and councillors to inflict service cuts on the public is politically acceptable to Tory toffs who went to Eton and don’t like paying taxes to look after us plebs. If some Conservative councillors lose their seats in “shit-hole” areas like Stockton-on-Tees, that’s a price well worth paying in their class war against the less well off.
Anyone with a gram or perhaps to the Tories an ounce of sense knows that the public spending framework set out by Hunt was a fantasy. Tory Councils like Havering are begging to be recapitalised before having to deliver their required bankruptcy notice. This is no longer a credible Central Government administration and the aim of this political pitch was to try and hold the ruptured Tories together until at least the next election with the illusion of tax cuts when they are inflicting a level of fiscal drag on the country which has taking taxes back to the level when Attlee was setting up the NHS and nationalising large sectors of the Economy. At least they got some assets for their money. This current rabble with their half baked economic ideology are just creating a never ending debt pile with no strategy at all to get out of this mess.