Wednesday, 16 December 2009

Ominous? Hackney singled-out by Local gov minister

Does it matter that Hackney has been singled-out in an article by John Denham local government minister? The thrust of the piece was that, after more than a decade of massive generosity to urban authorities, now it is payback time.

In the piece John Denham wrote: "The Pre Budget Report also made clear that local government will have to share in the tough choices ahead which will help reduce the deficit while increasing jobs, promote economic growth and protect frontline services.

"Councils have already risen to this challenge and are on course to raise £5.5bn of efficiency savings by March 2011. The chancellor announced he expected them to go further and find an extra £2.6bn by the end of 2012/13.

"Councils are able to meet these challenges because of the extra investment made by this Labour Government. We’ve already raised central government funding by more than inflation every year we have been in government. In the first 10 years, that amounted to a 39% real terms increase. Next year’s 4% increase should also come in above inflation...

Labour’s 13 years of investment means that councils should already be able to deliver the lowest council tax rises on record. The flag-bearers for low rises are London’s eight Labour run councils, which have already pledged to freeze council tax next year. Labour-led Hackney has not raised council tax since 2005."

Hackney is the only authority named in the piece. Does this mean that it has been one of the most heavily invested-in and therefore likely to feel the pinch more painfully than other authorities? What difference would a change in government make? And will the Olympics prevent whoever wins the next election from abandoning Hackney if it doesn't quite manage to find its own feet?


  1. No it means he is praising Hackney for delivering so well on the Gershon back-office efficiency savings that we have been able to freeze the Council Tax for five years whilst not cutting frontline services. He thinks other councils should see us as an example of what's possible.


  2. Hi Luke - I didn't think it was meant to be a negative mention. But I hope it wasn't totally unfair to twist it around as John Denham seemed to be saying that the tide had turned and that the front-runners/ground-breakers, like Hackney, now have a different task. He appears to think that past investment will have prepared Labour's London boroughs for this new role.

    I doubt Hackney froze council tax for five years in anticipation of the worst financial crisis in 100 years. I imagine the freezes were part of a strategy that assumed a happier financial situation than exists now.

    I can't see what fundamental changes have been made in Hackney since the financial crisis (I hope you'll put me right on that). The impression I get is that the ship is holding its course - the one set when money wasn't about to run out. John Denham seems to be saying that that isn't an option.

    I've also been told that belt tightening might not be a straightforward or passive matter in places like Hackney. It might need a different kind of creativity to that which worked in better times. (A lot of the changes Denham mentions seem to be providing councils with tools to do this)

    So boroughs like Hackney are expected to be self sufficient and even to contribute. I don't know if that's a correct interpretation of what Denham said. If it is a correct interpretation, I don't know if it is a tall order for Hackney - I hope not.