Has the Government thought this through? What happens when councils can’t pay the bills for services they have entered into long term contracts for?
No one really knows what will happen when you cut a councils budget by 50 percent. The bins won’t get emptied, the grass won’t get cut, the pot holes in the roads won’t get filled, and people will recent paying an increased council tax for a poorer service. When the swimming pools and libraries have been closed, when the parks have been sold off to developers where will councils get the money to pay for those services they outsourced to the private sector? If you have a 5 year contract with BT for back office services, IT, HR, Finance, and pay roll or a long term contract to run your call centre and you no longer have enough money to pay the bills what do you do? Cancelling the contract is not an option because you can’t pay the extortionate penalty clause but the private company won’t re negotiate the contract and accept less favourable terms even though you no longer need their top of the range all singing all dancing service. Why should they!
You threaten to go bankrupt but it’s far from clear if you can. As a local council you can’t set a budget that doesn’t balance but you can’t cut services you are contractually bound to purchase and you can’t make redundant staff you no longer employ.
So maybe you do declare the council unable to pay its bills and creditors look to central government for their money. Schools must stay open teachers must be paid, emergency services must operate, children must be protected from abuse central government have no option but to take over the running of local councils in the north of England. They put in place a board and run local government from Westminster in much the same way they run the NHS.
We may not have any councils up north but we will still have are MP’s .
Blair McPherson author and commentator on the Public Sector www.blairmcpherson.co.uk