People’s Assembly Finance Workshop

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Overall the workshop was incredibly interesting and informative. There were more than 15 of us in attendance (members of the People’s Assembly, Labour Party, Socialist Party, Momentum Hackney, Hackney KONP, HTUC, Hackney Unison, Hackney No#TTIP, Debt Resistance UK).

Councillor Geoff Taylor gave an overview of how Hackney has changed over the years and how this has affected its finances. In the Victorian period Hackney had a population of over 350,000, which declined over the years. By the 1980s, the population had fallen to under 200,000. Planning in this period was based on the idea of continuing falls in population. The majority of council housing had been built in the decades leading up to this and space had been used in an extremely inefficient way. Similarly Homerton Hospital also built at this time was on only two floors. We are paying for their failures to plan for a population increase now.

With the gentrification process that started from the 80s, it is predicted that the population has grown to over a quarter of a million and it is predicted that it will rise to 300,000 by 2020. It was highlighted that gentrification has essentially bailed Hackney out of severe financial difficulty due to increased council tax revenues, as well as more businesses paying business rates. In 2012, we had 12,980 firms (a 40% increase from 2004). Hackney has lost a 1/3 of funding (Revenue Support Grant/Top Up from Central Government) but increases in business rents and council tax revenues have made up for this.

The downside to this is the social cleansing that has occurred. Because of the cuts that have been imposed on Hackney council by the Tories, they are having to find alternative routes to finance the building of schools, keeping libraries open etc. The council have done this with initiatives like building ‘luxury’ private flats on the more expensive plots of land in Hoxton to fund a school on the same site. They can then replace this with council housing in cheaper areas of the borough. But this effectively moves poorer people out of the city.

Though there are now fewer deprived wards, Hackney still has higher unemployment than the London average and despite the improvements in education there is still a gap in the proportion with qualifications. Employment rates are getting better but there are still too many people left behind.

He was very keen to highlight the constraints that Hackney Council are under because of things like regulation and Best Consideration (the council have to let property at the market rate, if they want to let property at lower rates, they have to get consent from the Secretary of State).

Geoff highlighted that under new rules, an ‘excessive’ rise in Council Tax beyond around 4% is only possible if supported by a referendum (2% specifically for social care plus another 1.99%). He explained that Hackney council thought a referendum was too expensive (£400,000) given that each percent extra in council tax raises little more than this. This was a point of contention: Why wouldn’t Hackney vote for a 3 or 4% increase in Council Tax after a healthy debate on the issue leading up to a referendum? Why was this seen as a purely economic calculation rather than as an opportunity to change the terms of debate?

Geoff was very keen to stress that Hackney Council was the best run Council in the country and that the financial situation was better than most other councils but after successive rounds of ‘efficiencies’ the council could no longer deliver services without a rise in council tax. The group challenged him on cuts to local services, hardening of criteria and how the people who previously received services are managing e.g. meals on wheels cut from about 1000 meals a day to about 125.

What do Hackney council control?

  • Education (although obviously because of power of government to impose free schools, academies, grammars this is limited  if want to build a new school, do not have the choice to make it local authority school)

  • Housing (again this has changed because of Housing Associations, he also talked about the fact that Hackney council were asked to come up with a housing strategy and once they had done so the Government turned round and imposed reduced rents on them)

  • Planning applications

  • Strategic planning

  • Transport planning

  • Highways

  • Social Services (He made the point which that only a small % of Hackney’s population use these services and therefore it can be hard to defend the big chunk of funding that goes to them but he did not seem to consider the knock on effect this has for many members of the community e.g. family/friends or the knock on effect on the NHS, housing etc. Someone asked about the gender of those using these services and the likely disproportionate impact of cuts to these on women)

  • Libraries (this is statutory but the Government doesn’t actually specify how big libraries must be or how many there are, for example)

  • Leisure and recreation

  • Waste collection and disposal

  • Environmental health

  • Revenue collection (council tax, business rate)

  • Payment of Housing Benefit and awarding of Council Tax Support (this will soon be handed over to DWP)

  • Homelessness

What do they not have control over?

  • Police and probation

  • Fire

  • Passenger Transport (e.g. council can’t create new bus routes)

  • Concessionary fares and freedom passes – set by TFL but council pays for them (this costs £12 million a year)

  • Health Services other than Public Health which was recently transferred

  • Work & Pensions (Job Centres)

  • Magistrates and Crown Courts

  • Property valuations for council tax and business rates  Central Government have increased business rates by 46% as it is predicated on the amount of rent on your property

Geoff stressed the tensions here. For example, given that the choice is between an academy and a free school, the former is the lesser of two evils. If you don’t subsidise the building of a new school and simply pass on the cuts from central Government, you end up with poor schools with Hackney’s children.

Although Hackney has a budge of over a billion pounds, there are multiple constraints on it. Many budget items are fixed or ring fenced. This means that cuts must come from a relatively small number of areas where the council has significant control and flexibility i.e. adult services and children and families.

Someone raised the question of using criteria other than value for money when outsourcing services, for example, setting payment of taxes in the UK as an eligibility criteria. Geoff said that recently they had started requiring that all suppliers pay the London Living Wage. He stressed that there is a trade off as this means they can provide less for the same money but it is one worth making.

In the discussion there was talk about how to challenge the wider context of cuts. Geoff said “It’s not the role of the council to fight back against Tory cuts. That’s the role of political parties”. Geoff was challenged on this. He seemed to suggest that if councillors did this then members of the public would rely on them to campaign and would not oppose the cuts themselves rather seeing this as likely to increase local opposition by providing focus and solidarity.

The group encouraged Geoff to talk with other councillors within and beyond Hackney and to set up a cross-party meeting with other Labour Councillors in London to discuss how they can collectively fight Tory cuts. We argued Labour councillors in particular should be united in this.

We agreed that we need a united campaign against the cuts in Hackney, that we say NO! it is not possible to make any more cuts and that we need Labour Councillors involved in this and asked Geoff to look into setting up both a meeting at the Town Hall and for Hackney to raise developing a cross London campaign through London Councils. Geoff suggested that we organise a deputation to Council to call for this and that people organised deputations at council meetings focused on personal stories of people impacted by the cuts but designed to make more general points. We also agreed to develop our narrative on the cuts so that we are all ‘singing from the same hymn sheet’.

Momentum Hackney meeting on Tuesday 15 November at 7.30pm at Haggerston Community Centre. There is a TUSC meeting on Tuesday 13 December at 7.15pm at Day Mer and a Hackney People’s Assembly meeting on Monday 5 December.