Surrey, They Haven't a Clue

Local government finance isn't the sexiest subject in politics, but it should be right up there. Councils provide the services and maintain the infrastructure all our communities, whether heavily urbanised or scattered across the countryside, depend on. And the demented cuts the government have foisted on councils have stripped services to the bone, and most noticeably precipitated an adult social care crisis that has seen the displacement of vulnerable people who should be managed by social services into hospital wards reeling under the impact of staffing and resource shortages.

Under the late and unlamented Dave, local government was in Tory sights from the off. The appointment of the execrable Eric Pickles to the Department for Communities and Local Government saw him hailed as the first minister determined to make his portfolio obsolete. Rather than straight funding cuts to the block local government grant, they went down the route of fiddling with the formula that determined monies to be dispensed. It shifted from a formula that allocated resource with an appreciation of different levels of need per locality to a scheme that funded authorities by head of the population. On paper, it looked like the Tory/LibDem plans offered a "fairer" settlement as grants were shared out per head. In the real world it saw authorities covering some of the most deprived areas of the country, such as Stoke, lose money while some wealthy areas in the South saw an increase in their grant. All in it together?

The overall Tory objective was and remains to make local authorities entirely self-sufficient. They want to abolish the grant completely and see it replaced by a mix of council tax, business rates and council housing rent receipts. The Darwinian dream is for councils to fight it out to offer low council tax and rates to attract residents and businesses. It's sink or swim, with areas with high deprivation and correspondingly smaller private sectors disadvantaged from the outset. But because these were the Tories, and because Osborne's much-hyped but missing-in-action political genius couldn't resist, the government introduced council tax caps to prevent big rises to make up the shortfall. Initially this was through one-off bribes to keep rises down that were not guaranteed from year to year, followed by a rule change whereby councils would be required by law to hold local council tax referendums if they wanted to levy more than whatever that year's arbitrarily-determined threshold was. This, Osborne and Pickles reasoned, would wallop Labour councils. They had pressing financial needs, and win or lose they could be singled out by ministers as more proof of Labour profligacy.

Funny how things turn out.

Because of the pressing crisis in adult social care, Dave allowed for bigger rises in council tax: up to 2.99% for general revenue and a further 2% on top to go to adult social care. It was a belated recognition that social services were left badly damaged by years of unrelenting cuts, but was also an amount that fell well short of the monies required to make things good.

This is where Tory-run Surrey County Council enters the picture. Like many county authorities, the government are expecting them to make big cuts. For the financial year 2017/18, they were budgeting for savings of £93m. To help pull this otherwise wealthy county out of the mire, the council had approved a 15% rise in council tax and were all set to put it to a referendum as per the Osborne/Pickles trap. In the words of council leader David Hodge, the council simply couldn't cope with cuts of this scale without the shortfall getting made up from somewhere else.

Everything in place and then, boom, to everyone's surprise the referendum was off. The tax rise had been scaled back to the permitted 4.99% after much singing and dancing. Also interesting to see the sudden disappearance from the council's website of criticisms of centrally-imposed cuts. Hmmmm, what had happened? All was unveiled in a zinger of a Prime Minister's Questions. Texts accidentally sent to Newcastle's council leader from Hodge showed a deal had been hatched with Whitehall. No details, but it meant the referendum would go away. According to Channel 4 News this evening, it looks like Surrey was "coincidentally" selected as a pilot area for a new scheme aiming to integrate health and social care. How handy.

The government, clearly, had no choice but to cave. They were about to be caught in a trap of their own making. Seeing a Tory council ramp up council tax by such an amount would have damaged the party's claim to fiscal responsibility and cost them votes in a county area playing host to senior ministers, like our friends Jeremy Hunt and "call me" Philip Hammond. Secondly, win or lose it would have drawn media attention to an area of policy the Tories would rather not speak about. In short, it lays bare the inadequacy of present funding arrangements. By making the referendum disappear, the crisis can be swept under the rug for a little longer. It might be left to Jeremy Corbyn to raise it at PMQs but, they reason, few pay attention to what he has to say anyway. And thirdly, if this can be headed off now it might, with a stroke of luck, be a Labour council next time who puts a referendum to its people, allowing the government to jump in with both feet and make the cheapest of political points.

In all, this is one of the most tawdry spectacles this government has put on. That even now, despite the shared society idiocy and, more importantly, the full blown crisis in A&E and winter beds they are quite prepared to shilly shally around with political games than provide the support the situation demands. Even if everything else was tickety-boo, this alone damns them. But with everything else going on, their lazy attacks on doctors and their stated preference for Wrexit, this should - and they deserve to be - damned all the way to oblivion.