A Council that exemplifies the Tories’ mass-privatisation ideology has just gone bankrupt

The bailouts of rail service-franchisees, the collapse of Carillion, and now the bankruptcy of Northamptonshire council. Yet another shard of rock hurtles to the ground as the pillars of Tory ideology crumble.

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Following the inexorable steamroller of Tory austerity, which saw devastating cuts to local government budgets, then chief executive of Northamptonshire Council thought he had stumbled on innovation. “We are going to have a damn good go at it. I’d rather we go down trying than [do nothing] and go bankrupt”, he said of the scheme in particularly prophetic language. 

After central government cuts forced the council to make £376m in savings since 2010, with an expected £111m in savings on annual spending expected by 2021, the council decided that the solution was to run like a public limited company. 

Services, which were the duty of the council to run, were outsourced to private firms, or run by mutual companies or social enterprises, all of which were free to turn a profit, which could then be reinvested in services. 

The logic is particularly Conservative, and as such, particularly ill-founded. A council is not a business. It exists to provide essential services on which people depend and which are a right in a developed country. 

In Northamptonshire, such a conflict is especially poignant. The number of residents aged over 65 is expected to increase by 28% by 2024, and there are record numbers of children being taken into care. 

In serving its citizens, a government must necessarily run a deficit. It cannot charge its people for the care they need. It is insensible, misguided and delusional to pretend that a council can turn a profit, or can run like a business. 

Technically, a council cannot go bankrupt, but the news means that central government fiscal intervention is going to be necessary. It is yet another example of Tory short term thinking giving rise to greater costs in the long run. A £50m spend on consultants and rebranding has led to a council with all the trinkets and accessories of a shimmering free market bastion, but able to provide none of the essential services, which are its duty to provide.

While Northamptonshire council is forecast to incur a £10m overspend on its budget in 2018 after the £27m in hoped-for savings didn’t materialise, at the same time it is being forced to raise Council Tax by 6% and cut its services by £34m.

The hypocrisy of the Tories in Northamptonshire Council’s failure being intrinsically caused by their ideology was not lost on Penny Smith, the council’s Unison branch secretary:

Can you just imagine if this was a Labour authority? They’d be saying ‘typical Labour, can’t run anything’.

Asset sales and a raise in council tax appears insufficient to resuscitate the ailing council. Central government assistance is needed, and the proposed revised spending plans for 2020/2021 aren’t projected to be enough.  

In the meantime, Northamptonshire council is going to go forward unable to serve its residents. “Demand control” appears as one of the more worrying phrases in the council’s latest memo. In addition, no new spending is going to be authorised. A skeletal service for the residents of Northamptonshire Council who now must face the brutal reality of Tory cuts: an ideological pursuit that time and time again has been unable to achieve its aims. 

Most strikingly, One Angel Square – the jutting, angular box of glass and steel, which was the £53m icon of the prosperity of neoliberalism opened just three months ago – now stands as the iconoclast of that very ideology, as its expedited sale is sought to try and plug the holes in this latest Tory-ideology-induced financial pyroclast.

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