‘We are all localists now,’ it is said. Actors across the political spectrum claim the mantle. Yet chancellor George Osborne’s ‘devolution revolution’ provokes serious misgivings, with good reason. The Boxing Day 2015 edition of the Independent led with news of another attack on local democracy. Government proposals to strip councils of their power to ‘boycott and sanction’ amount to a ban on ethical investment. With the Greater Manchester devolution deal going live in April 2016, it is timely to reflect on the nature of Osborne’s devolution project and the possible contours of a more palatable localism.
The interface between the state, neoliberalism and local government forms an important backdrop to this debate. Contrary to free market ideology, neoliberalism has never been about getting rid of the state. Andrew Gamble’s famous couplet described it as combining the pursuit of a ‘free economy’ through a ‘strong state’. Confecting and sustaining a society dominated by markets requires an energetic state immersed in practices of hegemony-domination, including moral authoritarianism, coercion, regulation, ideology production and bio-politics. The experience of four decades shows that neoliberalism cannot do without what David Graeber called ‘a vast bureaucratic apparatus for the creation and maintenance of helplessness’.
Local government operates within – and occasionally against – this apparatus. Councils making a last stand for post‑war social democracy were caught in the disciplinary pincer of the Thatcherite ‘strong state’ in the 1980s, as municipal socialism was smashed together with the industrial trade unions. The ‘elite contempt’ warranting this assault on local government dates to the 19th century.
It was perhaps first articulated by John Stuart Mill, who observed that ‘local representative bodies and their officers are almost certain to be of a much lower grade of intelligence and knowledge than parliament and the national executive [and] they are watched by, and accountable to, an inferior public opinion’. Similarly condescending views populate 20th-century literature, from Winston Churchill disdainfully refusing a posting to the Local Government Board, to Tony Blair threatening that if local government did not ‘deliver the policies for which this government was elected’ he would ‘look to other partners to take on your role’. In Britain, the centre has always treated local government as an appendage. Osborne’s ‘devolution revolution’ appears wholly consistent with this tradition.
With the unions and municipal socialists tamed, talk of devolving power back to localities has been a constant sub-text of British politics. Increasingly worried about rubber levers of state power and the corrosion of democratic legitimacy, New Labour repeatedly promised a partnership with local government and local communities. However, on balance it came closer to fulfilling Tony Blair’s threat, treating councils as a terrain for policy experiments and subjecting them to enervating performance management regimes.
Matt Flinders described the gap between localist rhetoric and centralist reality as the ‘Blair Paradox’. How was it, he asked, that a government ostensibly committed to devolving power could ‘be seen, at the same time, as having a strong centralising and controlling approach to governing’? Commentators suggested numerous answers, including the necessity of centralism for eliminating postcode lotteries, path dependencies deriving from ‘elite contempt’ and the centralising logics of neoliberalism at work in imposing markets and targets on unenthusiastic Old Labour fiefdoms.
Whatever the explanation, the looming ban on ethical investment reminds us that the centralising imperative remains strong. It does not damn Osborne’s devolution project in its entirety, but there are other good reasons to think that the municipality will remain appended to the centre, and for developing an alternative model anchored in a robust conception of local democracy.
Known details suggest that whatever the outcome, Osborne’s devolution revolution will not be conducive to an alternative politics. Centralised fiscal, budgetary and legal controls continue. In the autumn statement of 25 November 2015, the chancellor devolved some control over local government finance, but with multiple strings attached. Small council tax rises are permissible, but revenue must be ring-fenced to adult care. Business rate rises are to be allowed, and local authorities will retain the returns. However, local business elites will have a veto.
Councils will have the same to spend in ‘cash terms’ in 2020 as in 2015. Unless there is prolonged deflation this announcement foreshadows more cuts, but on a scale impossible to anticipate without knowing inflation rates and local tax revenues in advance. Lord Porter, Conservative chair of the Local Government Association, believes that further austerity will push many authorities to the brink of collapse, reviving ‘graph of doom’ scenarios.
The room for local financial manoeuvre under this regime is tiny. Commenting on the lack of municipal resistance to austerity, shadow chancellor John McDonnell has observed: ‘The situation the councils are now in is if they don’t set a budget, a council officer will do it for them. There is no choice for them any more.’ UK local authorities are prohibited from deficit budgeting. Counter-austerity, expansionary city budgets remain a pipe dream. Should a city choose to defy austerity budgeting in isolation, central government has the means and the will to impose rule by technocrats.
After decades of centralisation, moreover, local authorities are badly afflicted by what former local government minister Phil Woolas called a ‘dependency culture’. In running Brighton even the Greens caused barely a ripple in the culture of ‘austerian realism’ afflicting local government. The Power Inquiry into British democracy found that ‘principle and ideas seem to have been replaced with managerialism and public relations. It is as though Procter and Gamble or Abbey National are running the country.’ In his 2007 review of the structure and functions of local government, Sir Michael Lyons made a similar point, observing that devolution cannot work without a renewed ‘sense of powerfulness’ in local government. The realistic possibility of municipal recalcitrance is surely the hallmark of an authentically devolved local government system.
These are enormous barriers to an authentic municipal renaissance, and the depoliticised landscape of 2016 appears safe for further government experiments in reallocating and rescaling state functions. At the same time, we should not underestimate the transformation heralded by the Manchester Deal – ‘Devo Manc’ – as it rolls out from April 2016 and other cities vie to emulate it. The powers of the Metro-Mayoralty and Greater Manchester Combined Authority will supersede those of any other. The subsumption of health, transport, housing, policing, economic development and strategic planning under a single authority promises the consolidation of a powerful local state entity. Osborne has even trailed the possibility of ‘further prudential borrowing powers’.
Devo Manc has all the hallmarks of a local state-crafting project, driven by the chancellor with local political leaders and officials. No doubt there will be colossal implementation problems, not least the Herculean task of integrating health and adult social care, viewed as the philosopher’s stone of successful austerity governance. But warts and all, Manchester seems on paper to deliver exactly what many devolutionists have long wanted: full-spectrum control of local budgets.
So what kind of local state does Devo Manc portend? Osborne sees it as the building block of a ‘Northern Powerhouse’. Others, including the newly elected MP for Oldham West, Jim McMahon, call it the ‘Northern Poorhouse’ – a term further evoked by the Christmas floods. The 2015 autumn statement aggravates what was already an extremely difficult financial context for Manchester, and city-regions following in its footsteps will face the same dilemmas.
In this conjuncture, devolution deals mean ‘devolving the axe’. Critics also point to the intensification of inter-regional competition and inequality likely – arguably intended – to follow devolution. As economist James Meadway commented, ‘By granting large cities more powers on the allocation of spending, but leaving the level of taxation, spending and borrowing under tight Treasury control, regions will be forced into competition with each other to attract business expenditure and therefore extra tax revenues.’
Osborne’s wager is that rising inequality does not matter, if inter-urban competition delivers growth dividends. He supposes that a rising tide lifts all boats, and it is fine if some rise faster than others. Even assuming a sustained economic recovery between now and 2020, however, no credible case has been made for the supposed metropolitan growth dividend.
At the same time, up-scaling local functions to the sub-regional scale will compound intra-regional inequalities by eroding the political distinctiveness of place, glossing socio‑economic differences and weakening the voices of people living in towns on the urban periphery. Greater Manchester includes some of the most deprived towns in the country and it is hard to see anything in Devo Manc for them. On the contrary, the literature on metropolitan governance suggests that financially beleaguered authorities under pressure to deliver growth gravitate towards city centre development.
Osborne’s localism is the harbinger of a growth machine deprived of democratic content. Austerity has undermined – in some cases gagged – segments of urban civil society. The plans amount to Treasury-led fiscal decentralisation, at the expense of local democracy. Devolution deals resemble Faustian pacts between Treasury and urban elites prepared to accept further neoliberalisation in return for some additional control over local spending. The dominant notes are boosterism, scale blurring, class and spatial polarisation and managerialism – the further depoliticisation of austerity and its manifold injustices.
This model is not what critics of Thatcherite and Blairite centralisation want, but is it what we had coming? Is a centralised political system the price to be paid for equality?
The demands of spatial equality mean there is no alternative to centralised taxation and distribution. However, the centralised procurement of resources is entirely compatible with a constitutional settlement for local government enshrining the right to determine budgets and spending priorities for functions deemed best governable at the municipal scale. It is also compatible with the constitutional right to undertake counter-cyclical investment and economic stimulus through deficit financing and progressive supplementary taxes, even when national government chooses the opposite course – and indeed the reverse scenario. Without such powers, councils will remain appendages and local democracy a charade.
Yet the local dependency culture runs deep. In Reclaiming Local Democracy, Ines Newman builds on Hilary Wainwright’s Reclaim the State. Newman argues that local government should be re-built on ethical principles rooted in the concepts of basic needs, substantive rights, recognition and social justice. She sees local democratic renewal as the task of activists: trade unions, social movements, community and voluntary organisations and – as Colin Copus is keen to remind us – elected councillors. Deals confected by national and urban elites will not deliver a municipal renaissance. That will come only from the bottom‑up and through trenchant struggles, in the first instance against austerity.
Even so, history warns us that stars in the firmament of urban socialism burn brightly but always briefly. From the modest ambitions of Poplar to the revolutionary foment of the Paris Commune, the revolution assuredly begins in the city. But, when it ends there, it ends in defeat. The localisms envisioned by Red Pepper rest, as they always have, on the feasibility of a positive dialectic between the local and the universal.
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