Labour and local government: back to the future?

The Labour Party looks certain to win the forthcoming general election and has a manifesto replete with commitments to end the over-centralised government of the country. No, not the position today, but in 1997. Labour’s manifesto for this year’s election, which the party also looks set to win, is equally condemnatory of the UK’s centralised state and promises further, deeper devolution.

Given these striking similarities between 1997 and today what does a brief comparison of the two manifestos tell us about the peculiar relationship between Labour in Whitehall and Labour in town and county halls?

The 1997 manifesto included a far more detailed set of commitments in relation to local authorities than the 2024 one. It foreshadowed the replacement of compulsory competitive tendering with a duty to secure best value, it committed the government to reforming councils’ constitutional framework, including the idea of elected mayors. The manifesto also committed the government to intervene in the case of poor performance. These commitments, and others, were delivered.

For many Labour councillors, however, the jewel in the manifesto crown was the commitment to abolish “crude and universal council tax capping”. This was seen as the culmination of their campaign to get rid of what they saw as Margaret Thatcher’s politically motivated attack on their financial autonomy.

In the event this commitment was not implemented. The members of Labour Cabinet simply did not trust their colleagues in local government to use the promised financial freedom wisely. Capping remains in place today and is one of the factors which have contributed to the financial crisis facing local government today.

The 2024 manifesto recognises that “local government is facing acute financial challenges”, but its commitments on this topic are confined to providing councils with “greater stability” through multi-year funding settlements and an end to competitive bidding.

In an interview with the Financial Times shadow chancellor Rachel Reeves joined the Conservative Party in refusing to carry out a much-needed revaluation of council tax bands. She dismissed the idea of doing so: “It doesn’t matter whether I think it’s sensible or not; is that where I am going to put my political energy? No.”

The 1997 manifesto addressed another product of the Thatcher years, the abolition of the GLC, with its commitment to holding a referendum on its plans for a strategic authority and directly elected mayor for London. It also committed a Labour government to creating regional development agencies and providing for referendums on regional government.

The 2024 manifesto reflects the existence of the 11 mayoral combined authorities and commits a Labour government to supporting the creation of more. In fact, the manifesto contains more proposals relating to the powers and roles of the combined authorities than conventional councils. The services covered include housing, planning, transport and economic development. The mayors of the combined authorities would be members of the new Council of the Nation and Regions alongside the Prime Minister, the First Ministers of Scotland and Wales, and the First and deputy First Minister of Northern Ireland.

The clear inference from the manifesto is that a new Labour government’s preference will be to work with a relatively small number of combined authority mayors, all but one of whom are currently members of the Labour Party. That makes sense in terms of logistics, but there are dangers in this possible neglect of conventional local government.

First, combined authorities depend on local councils for the actual delivery of many of the services in which they have an interest. Unless action is taken to strengthen local councils, particularly in terms of their financial sustainability, they will no longer be fit for purpose to fulfil that role.

Second, the relationship between councils and combined authorities is critically important. In some areas there have been niggles in that relationship, but overall it has been far stronger than that between county and district councils in many places. This is in part due to involvement of council leaders in the governance of the combined authorities.

There is a gnomic reference in the manifesto to a Labour government reviewing “the governance arrangements for Combined Authorities to unblock decision-making”. This almost certainly refers to the current role of council leaders. It is imperative that any changes reflect the importance of building on rather than threatening the relationship between the mayors, their constituent councils and council leaders.

The manifestos in 1997 and 2024 both committed Labour governments to ending centralisation. Many otherwise supportive observers of the Blair and Brown governments criticised their centralising tendencies. The current manifesto professes to be as ambitious as its predecessor on this topic, but its extreme caution in relation to its treatment of local councils and the lesson of history suggest that localists may be disappointed.

Phil Swann is studying for a PhD on the contribution of politicians to central-local government relations at INLOGOV (University of Birmingham)