Four decades ago, celebrated academic Manuel Castells raised the vital urban question. While his approach did not win comprehensive support, he pinpointed the importance of the local in the system of economic governance. A few years later, David Harvey highlighted a shift away from the provision of welfare and services at the scale under discussion. Urban entrepreneurship was replacing local democracy. The dominance of the UK capital in England was not threatened by New Labour tinkering with Regional Development Agencies (Amin, Thrift, and Massey). Further devolution has brought some responsibility for welfare delivery back from Whitehall, but for Vickie Cooper et al. austerity is simply violent in that resources are so limited.
Debates about the economy of the UK have been impacted by confusion flowing from Conservative politicians. Who can forget David Cameron’s controversial assertion that the nation had “maxed out” its credit card? Nevertheless, the Prime Minister did not pretend the country did not possess a facility to borrow. At the same time, economists at the Bank of England have expressed concern that the current recovery is excessively dependent on private borrowing. Loans for cars are sometimes portrayed as being particularly problematic, while many citizens are taking on large debts to get educated or to get by.
In this context of understanding the economic implications of national and personal debt, local government is often missing in the debate. Councils will not pass illegal budgets but their representatives will often state that they have no alternative to the imposition of further attacks on the shrunken public sector. Much of the public sector did not engage in what Professor Susan Strange called “casino capitalism” and the banks must accept their responsibility for the international financial crisis. The fact is that local councils do have the legal option of using their credit card while interest rates remain low.
Using a credit card is not a panacea for the dilemmas of local government in the UK. But it seems really odd to hide a credit card in a draw. Battered people deserve some respite from austerity and every option deserves consideration. The Government has put many citizens into a really difficult relationship with their councils. Council tax debt is high, while services are in decline. While the thrust of the economic policy of the Chancellor seems uncertain, the coalition may prove to be unable to implement austerity as quickly or as decisively as its backers would like. In this situation, councils should engage with the electorate, consider the possibilities, challenge the status quo and ameliorate the situation.