An Example of the Usurpation of Public Authority by Private Interests
As part of the government’s continuing austerity drive, the Isle of Wight Unitary Authority projects further reductions in funding on top of those it has had already. There is now a budget deficit of £20m forecast over the period 2017/18 to 2019/20.
The government’s neo-liberal agenda for what it calls the devolution of local authorities is in reality centralisation, an example being the proposals for the dissolution of Oxfordshire’s six local authorities and the replacement by a new super-council and elected mayor, introducing a new layer of party-dominated cabinet government at that level. In tandem with such plans, existing councils, such as the Isle of Wight County Council, are becoming openly capital-centric so that these bodies of elected pro-community councillors are turned into business-oriented authorities acting arbitrarily in the interests of, in particular, the powerful monopolies.
Following the Brexit vote, the devolution proposals have incorporated the EU-inspired enterprise partnerships – unelected business-run organisations such as the Solent Enterprise Partnership – that replaced the regional development agencies. These have more or less taken control of all funding and investment arrangements for the entire region. The intention is also to create localised investment zones, supposedly for regeneration, but in actuality to derive added-value from the locality in favour of the monopolies that control these partnerships and newly-created regeneration committees.
The neo-liberal austerity policy has forced the issue and served to reduce the remits of unitary authorities away from acting so much as providers of services and community schemes to purely business interests. Over a period of time, the government and local quislings have engineered a coup in the Isle of Wight Council in order to implement the central policy of corporate control of the local authority in order to transform its role. Austerity measures have taken the local authority to near bankruptcy and local ruin. Finance and sustainability have become a pretext for these actions.
The Council has developed a Medium Term Financial Strategy (MTFS) to address that “financial challenge”. Detracting from government cuts and abdication of responsibility for people’s services, the Council has slashed and undermined services and outsourced them to Private Finance Initiatives (PFI). It has issued contracts for waste disposal and given away whole bus routes and wound up Council-run services. These services are now well and truly in the hands of monopolies like the Go Ahead Group that runs Southern Vectis buses, Amey Waste and Eurovia (PFI).
The Financial Strategy described the financial challenge as the single biggest risk to sustainable public services on the Island, claiming that the Council needs to resolutely maximise the deployment of the resources that it does have (revenue, capital, property and staff) towards driving additional income, funding and cost-savings to secure Council services for the future. They refer to labour as a “cost”, giving the impression that labour is a burden and not the source of added-value, and on this basis making Council workers redundant.
The Strategy emphasises improving the economy and growing the income and funding base of the Council. This means attracting big business through lucrative schemes, matched funding for specific capital projects and business incentives. In the final analysis, it facilitates the claim of the monopolies on the added-value, the social product, so as to fill their own pockets rather than claims being made by the people towards investment in the services they require.
The government-inspired Council talks about “creating a prosperous and sustainable Island community built on the pillars of regeneration, growth and productivity.” Yet it is growth and productivity for whom? Prosperity for whom? “Prosperity” which, it should be pointed out, is to be funded out of the council tax-payers’ purses.
The funding base comprises business rates, council tax and the government grant. Without the government grant, the funding of this new style business-authority means that it must “become a more entrepreneurial and commercial Council as a means to generate income” and they are saying that this is the only way to “avoid service reductions”. This, their corporate benefactors’ manipulative logic, is meant to appeal to people’s desire and sentiment to sustain services.
Through a “Public Service Transformation” programme, much of the provision of services will be outsourced to private companies so that this provision no longer within the Council’s remit as such; this is replace by business transactions and deals. The Council refers to “duplication and cost” in this respect, as a further pretext for handing the running of essential services to companies that pay dividends to shareholders and more readily claim added-value for themselves.
Another source of funding for this business-centric Council will be the Government’s Retained Business Rates system. Devolved councils are to be funded in the same way. In place of direct funding, the complex formula includes the retention of 50% of all business rates. These rates are capped, with promises of reductions, and are without connection to the added-value of the product these businesses make. For 2017/18, Isle of Wight Retained Business Rates are estimated at £19.5m. The government and the state have estimated the future of business rates which is to increase by the rate of inflation only (as estimated by the Office for Budget Responsibility). It is understood that, to attract the monopolies, they will not pay towards local government any more than they themselves are prepared to offer.
The Council’s conclusions, which they say are confirmed from public “consultation” are that the Council should seek to generate income to pay for services rather than make cuts. Paying for services is a fraud because there is no intent to retain these services within the authority. Outsourced services will be pumped up by expensive, over-inflated costs that serve big business. It is key in their capital-centred outlook to secure investment and funding for business growth and “work with others”, such as creating business partners, to improve services and reduce “costs”.
The plan for the Isle of Wight Council to become a business-centred rather than a community-centred authority is fundamental to the neo-liberal aim of increasing the ability of the monopolies to increase their claim on the value added by the workers in the region. The fight is now against the government and their authority who are implementing austerity. It includes the fight against this transformation into a monopoly-serving business-centred authority operated by the local politicians acting in cohorts with the state and government. It is a fight for the rights of all to public services and a democratic and pro-human and community-centred Council.
Isle of Wight Council Committee report, “Budget and council tax setting 2017/18 and future years forecast”,https://www.scribd.com/document/338124366/Isle-of-Wight-council-budge-papers-Feb-2017#from_embed