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Sunday 14 March 2021

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Liverpool turmoil: Unite branch 'no cuts' plan points the way forward

Liverpool city council is in turmoil. Late last year the city's right-wing Labour Mayor Joe Anderson, in office since the directly-elected post was first established in 2012, was arrested on suspicion to commit bribery and witness intimidation.

Anderson denies any wrongdoing but has stood aside from his mayoral duties, and withdrew from the Mayoral election that takes place on May 6th this year.

Since then the Liverpool Labour Party has been involved in a process to select a new Mayoral candidate that has seen an initial shortlist of three sitting councillors overturned; a court challenge, unsuccessful, against the Labour Party by one of those excluded councillors who had drawn the backing of Jeremy Corbyn and the national Unite union for her candidacy; and the imposition of just two candidates - both right-wingers - in a new selection ballot, with the result of that not due until the day official nominations open on March 29th.

The Liverpool crisis is a product of many factors, including the triumph within the Labour Party nationally of Tony Blair's New Labour from the 1990s, to the abuse of power encouraged by the 'executive mayor' model of local government, which Blair himself championed.

But at its root is the desperate situation facing the council finances and local public services in the city, which saw the Liverpool Labour Mayor and councillors administer £420.5 million worth of budget cuts and tax rises from 2011 to 2020 as real-term central government funding for the council fell by over 30%.

The Trade Unionist and Socialist Coalition (TUSC) core policy pledge for the local elections that our candidates if elected would "vote for councils to refuse to implement austerity" has never been more relevant (see https://www.tusc.org.uk/17485/01-03-2021/tuscs-core-policy-platform-for-the-may-2021-local-elections). It is the only way forward from the mess.

The policy pledge goes on to say that TUSC "will support councils which in the first instance use their reserves and prudential borrowing powers to avoid making cuts. But we argue that the best way to mobilise the mass campaign that is necessary to defend and improve council services is to set a budget that meets the needs of the local community and demand that government funding makes up the shortfall".

And now one of the branches of the Unite union in the city has come out in favour of exactly that stance.

Printed below is the resolution passed at the 19th February meeting of the Liverpool Unite 0538 branch and below that a link to a longer briefing document prepared by TUSC supporters within the branch to explain their proposal.

The Unite branch plan for a no cuts budget and a mass campaign for increased government funding for local councils points the way forward for a city in turmoil.


Liverpool Unite 0538 branch motion: 'No cuts' budget proposal for the city council

19th February 2021

Liverpool City Council has faced massive real-term central government funding cuts over the last decade. During this period Liverpool's Labour councillors have in the main opted to compensate for Tory cuts by cutting Liverpool's services and raising council tax. The same defeatist approach is due to be repeated this year: the Liverpool Labour group's proposed budget for 2021/22 includes cuts of £15.4m and a 4.99 percent council tax rise.

But this branch recognises that there is an alternative: Liverpool's Labour councillors could refuse to carry through further Tory cuts. Rather than carrying out the Tories' dirty work, they could set a legal 'no cuts' budget for the duration of at least the next year. This could be done by partially drawing down Liverpool's 'usable' reserves of £63m.

By adopting this strategy councillors could avoid an immediate legal confrontation, and avoid cuts in the short term.

The time bought could be used to launch a campaign - in collaboration with other local authorities, and trade unions - demanding that the Tory government reverse cuts in central government funding for local councils, and provide relief funding for those authorities that have had to deplete their reserves or adopt other temporary budget balancing measures to maintain vital public services.

Therefore, we call on our union to demand that Liverpool's councillors partially draw down the council's 'usable' reserves, so that the below policy proposals can be implemented in 2021/22.

No more Tory cuts - resist now

Liverpool's Labour group plans to cut £15.4m from the council's budget by April, 2022.

Some of the service areas targeted are: regeneration, adult and children's social care, and community resources - including the proposed closure of every One Stop Shop in the city.

These vicious cuts can and should be avoided by drawing down the council's 'general' reserves. Doing this would reduce the 'general' reserves from £17.4m to £2m.

Reverse the Council Tax hike

Liverpool's Labour group also plans to raise council tax by 4.99 percent in 2021/22. Through this the council will draw in estimated additional revenue of £7.7m over the next year.

This tax hike can and should be reversed, with the resultant shortfall of £7.7M to be met by drawing down: (a) the remaining £2m of 'general' reserves; and (b) £5.7m from the 'earmarked risk' reserves.

This would leave the council with total usable reserves of £39.9m ('earmarked risk' reserves of £23.9m and 'specific scheme' reserves of £16m).

Reverse the pay freeze

The Liverpool Labour group's budget proposals for 2021/22 assume the Tories' planned pay freeze for public sector employees (except those earning less than £24,000 per annum, who will receive a minimum £250) will be implemented by LCC.

Irrespective of what the Tory government proposes, such a pay freeze should not be implemented by Liverpool's councillors. Reversing the planned pay freeze and instead giving LCC employees an overall three percent pay rise will cost £4.5m.

Having been drawn down to help reverse the Labour group's planned council tax hike, LCC's 'earmarked risk' reserves would stand at £23.9m. This figure should be drawn down by a further £4.5m in order for the planned pay freeze to be jettisoned, thus providing LCC's employees with an overall pay rise of three percent.

Doing this would leave LCC with total usable reserves of £35.4m ('earmarked risk' reserves of £19.4m and 'specific scheme' reserves of £16m).

Restoring funds used to fight cuts

Reserves spent implementing a 'no cuts' budget in 2021/22 will have to be replaced in future years.

In order to achieve this, Liverpool's councillors should launch a campaign - in collaboration with trade unions, councillors from other local authorities, and community activists - demanding that the Tory government reverse cuts in central government funding for local councils, and provide relief funding for those authorities that have had to deplete their reserves or adopt other temporary budget balancing measures to maintain vital public services.

Summary

Margaret Thatcher once said 'there is no alternative.' She was not telling the truth. Neither are Liverpool's Labour councillors when they repeat her maxim.

This 'no cuts' budget proposal shows that there is an alternative. It is possible to implement a legally balanced budget that avoids an immediate legal confrontation, avoids cuts in the short term, and provides breathing space to build a struggle against Tory austerity.

Rather than carrying out the Tories' dirty work, Liverpool's councillors should pursue an alternative strategy: fight cuts now - implement a legal 'no cuts' budget.

Note: A fuller version of this 'no cuts' budget proposal, including details of the council documents cited, is available at https://www.tusc.org.uk/txt/437.pdf