Miracles can happen …

Many new ideas for social change are emerging on the ground from within Labour Councils

The days of binary choices in politics are gone, as is the fiscal basis for the mildly redistributive social democratic policies pursued by New Labour. If we hope to find a new way forward Labour needs to connect the fight against inequality to a passion for innovation in economic and social life. Some of the ideas needed for this are already emerging in embryonic form in Labour’s own heartlands. And if some of the innovation and improvements in productivity recently shown by Labour Councils having to deal with the cuts could be rolled out across a wider range of services, the impact on economic growth and boost to fairness would be significant. Many of these innovations demonstrate a practical grasp of ways to revive public service delivery: a number of Labour councils are engaged, on the ground, in rolling back key features of the New Public Sector Management launched under Thatcher and Major and embraced by Blair and Brown.

Rather than heading ‘Back to the Future’, Labour needs to frame debate with a new vision, and come up with an economic strategy that can offer the hope of a better future to all sections of the population, and the fairness and decent services this requires. To do this it needs to develop a new vision for public services, building on the existing work of local Labour Councils. This is much more than a defensive response to austerity: it can be a key component of a forward-looking vision of how a different kind of economy and state could function.

It is an inconvenient truth that something rather surprising is happening in our big cities that have been decimated by spending cuts. They haven’t. This doesn’t fit the Conservative narrative of spendthrift Labour who created the crisis. And it’s also not too easy for Labour Councils to acknowledge - to say that, despite the profound unfairness of the treatment we have received, things aren’t as bad in the cities as we might have feared. Yet cities like Liverpool, which have faced cuts in spending on a scale and at a speed that is unprecedented in this country, have to a large extent managed to weather the storm. Indeed this may be the reason for Labour’s continuing ability to hold on to support in the cities in the May election.

Austerity has of course had severe consequences for some council-run services. Nor can councils cope with a further round of cuts. The geographical and social redistribution of council finances was profoundly unfair under the Coalition government. Tory shire counties in general faced small reductions, while metropolitan and Labour-run councils bore the brunt. The nearest comparison in terms of the scale of cuts is with the ‘lost decade’ in Latin America in the 1980s. Compared to this, the cuts Labour Councils faced during the same period were peanuts, and yet at that time most cities were in a terrible state and public services were in ruins. But things have been different this time. My aim here is to ask why that is, and understand what Labour might learn from this at a national level. I want to explore the possible outlines of an emerging new settlement, drawing as much as possible on our own experience in Liverpool, and in my particular my experiences as Cabinet Member for Neighbourhoods, which has over the years included responsibility for the youth service, street cleaning and waste management, and parks.

Flourishing cities

One factor in the flourishing of cities is undoubtedly the long-term trend back to city centres. In the early 1980s the movement of population and jobs was away from cities to sub-regional centres at the nodes of transport communications. In the 1990s this changed, with a rise in the population of city centres and student numbers, increased service jobs ranging from retail to tourism, and the emergence of ‘creative hubs’ in or around the centres of most big cities, which attracted clusters of small businesses and young professionals. This has blunted the...