Hull has been a Labour bastion for 30 years. But on 2 May, the party lost control to a Liberal Democrat/ independent coalition and since then the council has plummeted spectacularly from grace. Now, the government is considering sending in a hit squad to run Hull's crumbling housing services after May's Audit Commission report found the council's housing revenue account teetering on the brink of insolvency.
The blame, as the commission and critics such as Jarvis and the Lib Dems make clear, has been laid at the door of Labour, the party which presided over the council's past financial failures.
To add ironic insult to injury for Labour, the sorry saga has taken place in the backyard of Hull East MP John Prescott – the deputy prime minister whose remit includes local government and who is responsible for deciding on intervention.
Old ways prevail
Unravelling the debacle means understanding the political culture that has permeated the town hall over the last three decades.
Tony Blair's modernising local government agenda and New Labour mantra have swept through councils across the country, transforming Old Labour left-wingers into media-savvy Blairites. Even Labour councillors in the London boroughs of Hackney, Islington and Lambeth, once bywords for the Loony Left, now proudly wave the New Labour flag.
Hull, however, appears to have had a New Labour bypass. According to critics, councillors favoured ideology over action, political point-scoring and backbiting over practicalities and grandiose schemes over front-line services. Labour's majority allowed policies to be driven through unchallenged. The evidence points to the ghost of the Loony Left roaming the corridors of Guildhall at a time when other local authorities had laid it to rest.
Worse than the 'Loony Left'
Jarvis left Labour to become independent eight years ago. He says: "The political situation in Hull has been worse than that in the days of the Loony Left in Lambeth, Islington and Hackney. How did it get so bad? Most of the problems were brushed under the carpet. The Labour Party has moved forward in other areas, but backwards in Hull."
How did it get so bad? Most of the problems were brushed under the carpet. The Labour Party has moved forward in other areas, but backward in Hull
Chris Jarvis, Hull councillor
Against this ideological backdrop, Hull's finances slid into freefall. They should have been in excellent shape: in 1995 the council struck a potentially lucrative deal with housebuilder Keepmoat. Under the agreement, the company would build private homes on council land and split the profits with Hull. Although the council expected to benefit by £8.3m and use the money to repair 1200 homes, by last year the profits totalled only £800,000.
More fiscal short-sightedness followed in 1998 when Hull received £255m from the X X sale of part of its shareholding in Kingston Communications, the phone service it set up in 1902. The windfall lulled the Labour-led council into a false sense of financial security and it embarked on a massive spending spree. Hull's £650m capital spending plan included a plan to install double glazing and central heating in all council homes, repair schools, clean dirty streets and build a £40m super stadium for rugby and football.
The auditors arrive
Alarm bells began to ring in February 2001 when a district audit report on Hull discovered a £270m shortfall in the spending plan.
Auditor Paul Lundy warned that Hull's spending levels were "neither realistic nor achievable" and might in time leave the council in severe financial difficulties – in hindsight, something of an understatement. Spending on high-profile projects had left little for front-line services; rent arrears had increased to £7m and 3300 of the council's 35,000 homes stood empty.
Although the council agreed that it needed a three-year programme of cuts, there was little evidence of decisive action and it was Lundy's report that sparked the recent Audit Commission investigation.
Hull's Labour Group might have been "in denial" over the financial crisis, as opposition councillors claim, but the electorate was not. The people of Hull showed their disillusionment with Labour on 2 May at the ballot box. The Liberal Democrats won 29 seats to Labour's 24. No party had overall control, but the Liberal Democrats formed a coalition with Jarvis, one of the four independents on the council, as a community member.
Fur starts to fly
Now, the old regime is at loggerheads with the new administration. Labour refused to hand over power until the first council meeting and insults are flying across the council chamber.
We have been turned over by a bunch of opportunists with no policies. I do not believe they have got any clue on how to run a city
Ken Branson, Labour councillor
Labour also attacked the Liberal Democrats' decision to release the Audit Commission's investigation of Hull before its official publication in July. The Lib Dems claimed its early release was in the public interest. New Labour group leader Colin Inglis, though, claimed the action was fuelled by a hatred of Labour and a desire to distort the commission's findings. At one council meeting, in a bid to demonstrate the Liberal Democrats' dishonesty, the Labour Group "outed" Lib Dems who were behind with council tax payments.
Labour councillor Ken Branson fumed after the election defeat: "We have been turned over by a bunch of opportunists with no policies. I do not believe they have got a clue on how to run this city." Inglis, meanwhile, has called the Lib Dems "nonentities".
The Labour group's latest move sees it furiously attacking the Audit Commission over the report. It accused the Commission of meddling in politics and coming to the council with an agenda decided in advance. Inglis told Housing Today last week that a Birmingham University report warning that 70% of council homes are experiencing low demand was "absurd".
He fumed: "We have not heard that Pol Pot and the Khmer Rouge are about to march on the city, and in the absence of such a stimulus we cannot believe that over 26,000 council properties were in imminent danger of being abandoned."
rying to stay optimistic
Jarvis and the Liberal Democrats, though, have signalled their desire to work closely with the Audit Commission to set an improvement strategy in place. "We are enthusiastic," says Simone Butterworth, the new Liberal Democrat leader of the council. "I am confident we are going to turn this terrible situation around." Butterworth is desperately hoping that her positive approach will buy Hull some time before the government deems intervention necessary.
Chris Jarvis adds: "I'm optimistic about the future because we've got a new administration in place." He hopes this will affect central government's decision on intervention.
Source
Housing Today
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