English local government is broken. And it is national government's fault.

Local government will continue to fail because it doesn’t - cannot - have the resources needed to look after the frail elderly, care for the disabled, and protect children

Birmingham is broke. Or so the reports tell us:

“Birmingham city council, the largest local authority in the country, has in effect declared itself bankrupt after issuing a section 114 notice, signalling that it does not have the resources to balance its budget.

The notice, preventing all but essential spending to protect core services, was issued on Tuesday with council leaders blaming a £760m bill for equal pay claims, problems installing a new IT system and £1bn in government cuts over the past decade.”

In response we have seen the usual political grandstanding as the facts of the bankruptcy get ignored while the media and politicians seek to blame almost everything except the decisions that they’ve made or supported over the years. The proximate causes of Birmingham’s ‘bankruptcy’ (it isn’t really this - another unhelpful media/political characterisation of a complex issue) are in that second paragraph above and, in particular, the cost of a settlement for equal pay claims. But these are proximate causes, as are the cuts that councils allude to at these moments of crisis.

Helpfully, Sky News catalogued seven councils that have pressed the s114 button and we see the proximate reasons vary - from appalling management (Hackney, Northumberland) through hubristic property deals (Croydon, Northamptonshire), to the collapse of investments (Thurrock, Woking). Looking at this we might begin to ask whether the problem is local government itself? Certainly this is Whitehall’s approach to failures in services from local councils - send in the commissioners, force outsourcing or create new council structures. The media rolls out either public sector union leaders or the Taxpayers Alliance to explain how the problem is all about local leadership, how officers are not culpable and how, as we saw with reports on Birmingham, the problems are down to spending money on renaming a few streets.

A few years ago when I was leading the Conservative Group on Bradford Council I received one of those eye-opening briefings from the Director of Finance - apparently the council was, probably still is, technically insolvent. I know my former colleague Cllr Mike Pollard, has more than once made comment about the instability of Bradford Council’s funding - an instability that led, in no small part, to the collapse of that council’s children’s services function followed by that default Whitehall response of imposing commissioners and management. Everywhere we look in England’s top tier councils we see the same issues - increasing pension liabilities, huge budget pressures from looking after children, and massive increases in demand for adult social care.

These pressured services - in large part what we used to call social services - are statutory services that involve legal entitlements for those receiving the services. When Birmingham issues a s114 notice it is to protect these services rather than services without the same degree of entitlement (such as street cleaning, parks, youth services and fixing potholes). Plus of course the s144 notice also protects employees, payments for employees pensions and payments to local authority pensioners. If we want to find a part of government that has been living beyond its means, local government is where to look. I’ve a feeling that most leaders of top tier councils are looking at Birmingham and thinking, “there, but for the grace of God, go I”. English local government is as administratively broken as Birmingham is financially bust. It is best described as a social services department that looks after a few roads and parks with any spare change it can scrabble together. Yet the Whitehall solution - urged on by what might be called ‘neatist’ think tanks - is to propose more unitary councils, more sub-regional government and more powerless talking shops led by mayors with little authority and less money.

We need to be asking more fundamental questions. Do we intend for local government to spend most of its time and nearly all its money providing services to about 5% of the population? What does the public want and expect from their local council and is this reflected in the balance of spending? Is Whitehall too controlling of what local councils do, even to the point of mandating what system of refuse collection is used and how books should be organised in a library? Do we have councillors with enough experience and expertise to deal with complex services?

I am on team local government. I think Tip O’Neill was right when he said that, in the end, all politics is local. And I believe that, compared with what I’ve seen from national government agencies and the NHS, local councils are paragons of administrative virtue. But those councils cannot spread their resources ever more thinly across the services people want while politicians in London dither over the adequate funding on social care, looking after children and supporting the long-term disabled. Or while civil servants with gold-plated pensions refuse to engage with the problem of funding the pensions of local council employees. Plus, while I’m here, unions can’t demand millions for equal pay claims without telling councils what they will need to cut to provide those payments.

The problems in Birmingham result from the choices of parliament not from the management of those local councils. The egregious property deals we saw at Woking and Northamptonshire were done so as to find a way to reduce costs or pull in some extra income that could prop up the visible, often non-statutory services that councils know people want. These schemes and deals are not, in most circumstances, carefully considered asset management and investment strategies but acts of either desperation or hubris. For some councils these failed schemes resulted from deals intended to plug holes in budgets caused by the demands of social services while for others they were overblown political schemes that, like Nottingham’s ‘Robin Hood Energy’, planned to square the circle of reducing prices and increasing profits.

Nobody is talking about local government. Or at least about how we rescue England’s local councils from their current impossible financial and administrative situation. Lots of London-based ‘experts’ tell us we need wholesale reorganisation - a sort of Redcliffe-Maud On Steroids with mayors, vast unitary councils and lots of talk about trams, levelling up and economic development. But nobody much is talking about the real functions of local government - those visible services that, if you ask the public, are the things they want and expect from their local council. None of these involve the word ‘strategic’ or require an elected mayor in a nice office 25 miles away. These services are things like sweeping the streets, picking up litter, fixing worn out roads and rebuilding collapsed walls. We are talking here about the flowers in the parks, the dredging of the boating lake, patrolling that park so kids and old people can enjoy it free from anti-social behaviour. People think local councils should provide libraries, collect the bins once a week, run youth clubs and old peoples’ drop in centres. A hundred and more little local services that make places better and nicer - hanging baskets on the high street, festive lights for Christmas, Eid and Diwali or maybe just because they look nice on a Summer’s evening in the park. When people talk about cuts or austerity, it is the loss of all these visible services that they’ve noticed. And this loss is the result of nearly 60 years of Whitehall, urged on by over-mighty politicians in London, gradually taking over effective control of services once provided by the council. And of those same people than saying there are too many councillors and those councillors are all useless.

Unless the issue of social services is resolved there is no sustainable future for England’s local councils. The only justification for the sort of anti-local system we see in North Yorkshire is that it gives a few more years before the wheels fall off the social services wagon. Big unitaries are created simply because it allows the further thinning out - ‘efficiencies’ - in genuine local services so as to transfer more money into the unsatisfied and insatiable maw of social services. There is, regardless of the grandiose pictures painted when unitaries are formed, no reason for abolishing the district council - genuinely local government - other than to prevent the top tier of local government collapsing.

Every local councillor who has paid any attention during budget meetings over the last 25 years knows everything I say above is true. The problems of local government aren’t about equal pay claims, property deals or poor political leadership - for all that these things are real. Local government, regardless of who is elected locally, will continue to fail because it doesn’t - cannot - have the resources needed to look after the frail elderly, care for the disabled, and protect children. Until social services are funded properly, until those who can afford care pay for their own care, we will see more situations like the one in Birmingham.