Birmingham council’s near bankruptcy wasn’t inevitable. The crisis unfolding there results from a Labour Party and trade union leaders who have abandoned struggle and ­ordinary people. 

In a further insult, council leaders are trying to blame working class women fighting for pay equality for a lack of funds, not the Tories who have slashed council budgets. 

It’s a disgraceful tale that is being ­replicated in cash-strapped councils across Britain. 

Birmingham council covers a million people and spends £3,200 million a year on everything from rubbish collections to schools, street cleaning and adult social care.

The Section 114 notice announced by the council’s Labour leaders last week is a surrender document, an admission that they can’t cope and are opening the floodgates to shattering cuts and major job losses.

The ordinary people, the poor and the vulnerable, who they promised to champion at election after election, will be thrown to the capitalist wolves.

Even before last week’s events, the council asked all of its 10,600 directly employed staff if they wanted to apply for “mutually agreed resignation”. Workers would be given a lump sum to go.

That means stretched or destroyed services and even more workload for the people who remain.

Birmingham’s experience isn’t that unusual. It’s the seventh council since 2020 to issue a Section 114 notice.

Sigoma, a grouping of 47 large urban authorities, last month warned a third of its membership could declare effective bankruptcy this financial year or next. 

The Local Government Association estimates that English councils face a funding gap of £3 billion over the next two years just to maintain services. 

The most important reason is year after year of cuts. 

Governments cut grants by an average of 40 percent in real terms between 2009-10 and 2019-20. But lots of councils particularly in poorer areas, lost 60 percent of funding.

In a book on local democracy from 2015, Simon Parker describes the consequences as “perhaps the biggest shift in the role of the British state since 1945”.

It’s much easier for ministers to pass on the imposition of austerity to others than do it themselves.

When the council closes your nursery or privatises your care it’s the councillors who are the obvious culprits. And neoliberal doctrine says more and more services should be profit-making.

But there’s another crisis—the lack of resistance. The assault on councils’ powers and funds began under Margaret Thatcher’s Tories in the 1980s. At first there was some defiance.

Socialist Worker criticised the ­limitations of the resistance. But at least there was some fightback. In 1985 15 councils refused to set a rate as an anti‑cuts tactic—most quickly gave in. 

Subsequently Labour councillors became transmission belts for cuts. Labour leader Neil Kinnock said councils could be a “dented shield,” making some cuts to stop bigger ones. All it meant was telling people to accept ­closures and pay cuts.

Tony Blair’s Labour went even ­further, positively embracing ideas that councils should be “enablers” of services provided by charities and community groups. And there was no shift to struggle under Jeremy Corbyn.

In December 2015 Corbyn told Labour councils that there was no point setting a needs-based budget in response to cuts.

In a letter sent jointly with John McDonnell, the shadow chancellor, said the choice was ­working within the ­government-dictated budget or letting in commissioners who would ruthlessly implement worse.

The idea of encouraging strikes and mass ­protests wasn’t even considered.

‘Those of us in women-dominated sectors are treated differently’

Helen works as a carer and is one of those who hopes to gain from the equal pay claims.

She told Socialist Worker, “I am on about £14 an hour. That’s no great fortune although it’s better than some others.

“We’ve known for years that those of us in women-dominated sectors like care and school meals and teaching assistants are treated differently to ones in male-dominated ones.

“Even when the pay is the same, we don’t have the same bonuses and top-ups.

“I don’t resent it that bin men get these. They should do, and they deserve more, not less.

“But it is unfair we don’t get the same. And we should be compensated and the conditions made the same. We all should go up, not some be held down.

“There was a big strike by care workers in Birmingham a few years ago that stopped cuts and saved our shift hours. We might need  to do that again.”

Two GMB union sources told Socialist Worker that they believed an agreement was imminent with Birmingham council over processing equal pay claims before the bankruptcy announcement. But Tory interventions and unelected council officials destroyed it.

Blowing up the deal was designed to unleash a class war attack on jobs, services and democracy. A GMB source said, “There are people in the government and inside the council who preferred the council to crash and burn. 

“Some think it will make Labour look bad and can be used to say ‘Birmingham is what you get if you vote Starmer’.  

“Some council insiders liked it because they think it clears the way to make the unions surrender and to accept less than they ought to.”

Birmingham Live website reported last weekend that the council was reviewing how to proceed with over £1 billion of potential equal pay claims. 

It said this amount “is mentioned in an exchange between council leader John Cotton and government minister Lee Rowley MP.”

Rowley told Cotton that he had to show that “decisions taken by the authority represent value for money and do not adversely impact the level of support the government may need to provide.”

This implicit demand for a squeeze on any payouts panicked the council into dumping two pay equity scheme options it had intended to consider. 

Council officials backed this decision to tear up what unions had seen as a way forward.

The schemes which were under close consideration did not involve surrender by the council. Because they made important concessions, they would have disappointed and angered at least some of the workers affected.

But their schemes went too far for sections of the council, who then won their view among the rest.

Now a new blackmailing squeeze is on. Birmingham Live says there are now two ways of processing the equal pay claims. The first is to “carry out the evaluation project in-house and in partnership with an expert non-profit organisation, with the support of unions in principle”. The second is to wholly privatise it.

The council initially went with the first option. But, the GMB source told Socialist Worker, “They want more assurances from us—concessions—or the council will give up and the government will appoint commissioners.”

Commissioners are outside bureaucrats and business figures with immense powers to slash spending and sack workers without even the pretence of democracy.

Some Tories are hungry for this in Birmingham.

An article on Conservative Home website on Thursday by Harry Phibbs, its local government editor, said, “Michael Gove, the levelling up secretary, should send in Commissioners to run the council without further delay. They should be given a clear brief to change the financial direction of the Authority, not just steady the ship.”

Trade unions must not give in to the threats. And they must fight all the cuts and not betray the workers looking for pay justice.

That will take defiance—and strikes.

How local councils developed as the working class fought back

Elected urban councils running major areas of services emerged alongside the growth of an industrial working class. Well before central government, many took on welfare provision.

Local government expenditure outstripped national expenditure for most of the 19th century. The vision of active councils was put forward most strongly in one of Britain’s great industrial centres—Birmingham.

In 1930, Labour MP John McShane told the House of Commons, “A young person today lives in a municipal house, and he washes himself in municipal water. He rides on a municipal tram or omnibus, and I have no doubt that before long he will be riding in a municipal aeroplane.

“He walks on a municipal road. He is educated in a municipal school. He reads in a municipal library, and he has his sport on a municipal recreation ground.

“When he is ill he is doctored and nursed in a municipal hospital and when he dies he is buried in a municipal cemetery.”

The extension of council services, often under Liberal party leadership, was partly a reaction to the threat of a rising—and struggling—working class. Reforms were needed to stave off a mood of revolution.

“Municipal liberalism” or even what some called “municipal socialism” was never a threat to capital. But its promises seem extraordinary compared to today’s councils. 

A century ago, as Labour was on the rise, councils were expected to take over more and more areas from private capitalists and submit them to some form of democratic control.

Today councils are anxious to abandon responsibility, not take more on.  The shrunken horizon of reformism, pledging only that life will get worse more slowly is another aspect of the general retreat of Labour-like parties.