The Impact of the Financial Crisis on Local Government and Public Services

The Impact of the Financial Crisis on Local Government and Public Services, by Jo Richardson.

The framework for public local service delivery and governance has shifted dramatically in recent years; this is in light of the recession and ensuing financial crisis, and particularly so since the political changes brought in by the new Coalition government since May 2010.  But, is the changing framework one of cuts to chaos, retraction of the state to riots, or could it possibly be from recession to renewal?

A number of pieces of government apparatus have been spat out of the government ‘toaster’ recently, for example the Audit Commission and the Tenant Services Authority to name just two.  Regulation of local government services has been drastically reduced to a reactive, last-stop mechanism.  In addition, government funded representative organisations have also been threatened, such as the National Tenant Voice who will no longer receive funding.  The removal of regulation and the cutting of funding for ‘voice’ presents a scenario where public service organisations are less scrutinised, and service users have less power to be heard when they do complain.  Cuts could lead to chaos.

Couple the cuts in regulation and voice, with the withdrawal of services, charging additional fees and capping or withdrawing benefits and there is a recipe for public disquiet.  The test case brought by the Disability Law Service (on behalf of McDonald) against Kensington and Chelsea Borough Council, when night-time support services in the home were withdrawn, have wide ramifications for other councils, and a huge impact on the dignity of individual service users.  The new proposals on ‘workfare’ and the capping of housing benefit could leave many with the prospect of having to move from cities that they call home.  Also, the raising of student fees could put a University education beyond the reach of many, and we have seen the reaction during the student protest in London, earlier in November.  Retraction of the state could lead to riots.

However, the financial crisis and the cuts to public sector funding also offer opportunities too.  Firstly, there is the opportunity to learn the lessons from the causes of the recession and to remember that greed in the markets was to blame – not public services.  In our attempts to reduce local government budgets, we should not let current political rhetoric crowd out the facts of the crisis.  Secondly, there is scope to remember the role and rationale for government – do we just deliver public services or do we lead and connect communities?  Third, and finally, is the possibility to empower service users within the new government’s ‘Big Society’ agenda.  If applied meanly, Big Society could equate to ‘Do It Yourself’.  It could be an ideological veneer for an economic solution to withdraw the state from society.  However, if service users and communities embrace ‘Big Society’, and there is evidence that residents are interested (albeit with a healthy degree of scepticism), then it is important to help facilitate this transition in local governance and public service delivery.  Nevertheless, it is vital to hold the government to account if this is really going to work – there cannot be a ‘Big Society’ without investment in education and industry, protection of vulnerable groups, as well as leadership of places and connected communities.  Recession could lead to renewal.

From Recession to Renewal: The impact of the financial crisis on public services and local government. Edited by Joanna Richardson. Published in paperback and hardback by the Policy Press, Bristol.  ISBN 978 1 84742 699 4

jpg of cover page of book Recession to Renewal

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