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Local authority spending: Is the party finally over?

On May 9th 1975 the Environment Secretary Anthony Crosland said in a speech at Manchester Town Hall:

"For the next few years times will not be normal. Perhaps people have used the words 'economic crisis' too often in the past. They have shouted 'wolf, wolf' when the animal was more akin to a rather disagreeable Yorkshire terrier. But not now. The crisis that faces us is infinitely more serious than any of the crises we have faced over the past 20 years. With its usual spirit of patriotism and its tradition of service to the community's needs, local government, is coming to realize that, for the time being at least, the party is over...We are not calling for a headlong retreat. But we are calling for a standstill."

His Special Adviser at the time, the Labour peer Lord Lipsey, has recalled the episode in his memoirs In the Corridors of Power. The impact became apparent when they came back on the train from Manchester and saw Evening Standard billboards proclaiming the message: "The party's over."

What actually happened was that the Rate Support Grant the following year was only increased in line with inflation. That came to £10.6 billion for England and Wales.

Fast forward to today, and after some quite sharp cuts, central  Government funds local authorities (just for England) by £74 billion. Allowing for inflation, this is about the same amount in real terms. On the other hand total state spending has gone up from £55 billion in 1975 to around £700 billion now - far more than inflation. Items like welfare and the NHS have risen much more sharply than council spending.

The really lavish partying these last 35 years has been by the Quangocrats and the Eurocrats - they have put Town Hall extravagance in the shade. One day the recession will be over and the budget will have been balanced. Even when that happens, some of the changes being brought in by Eric Pickles - transparency, accountability, the chance to veto high Council Tax rises through a referendum, should mean that the culture of indulgence in wasting other people's money should continue to be kept in check.

When will the party be over for the big spenders in central government?


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