Saturday, September 1, 2018

Capitalism doesn't care (2018)

Editorial from the September 2018 issue of the Socialist Standard

Northamptonshire County Council, in a bid to stave off bankruptcy, has recently announced massive cuts to jobs and services in order to avoid a budget shortfall of £70 million. Children's services, road maintenance and other services will be cut back. The workers who provide and maintain these services will be sent on their way to the job centre. Needs go unmet while resources and workers remain idle.

The main spotlight has been on the Council's management. Alarmed by an overspend of £21 million in 2017-18 , the government had sent in commissioners to run the authority. Criticism was made of, "weak budgetary control" and failing to heed earlier advice to cut spending. Ironically, the council's outsourcing policy was identified as a cause of its financial problems. Outsourcing services to private companies is promoted as a more efficient and cost effective way to provide local services. However, private consultants do not enter into these contracts for the welfare of the community but to make money, and many are very efficient at squeezing the maximum amount of profit.

What is embarrassing for the government and the Tory press is that Northamptonshire is a Tory council, as we are led to believe that only 'loony left' Labour councils overspend and mismanage their finances.

Northamptonshire is not the only council to be in crisis. East Sussex County Council has also announced drastic cuts to its services and it is feared that many other councils are on the brink of bankruptcy.

Others, particularly on the Left, have identified the cuts in government funding of local authorities as the culprit. Their solution is to kick out the Tory government and elect a Labour government committed to ending austerity.

All this ignores the greater context of capitalism, the lifeblood of which is the making of profits. Everything flows from this and central and local government spending cannot be allowed to impinge on it. If the economy is booming, profits are rising and tax revenue is buoyant then the state may be able to throw some extra cash towards social and welfare services. However, when there is an economic downturn and profits fall, as we experienced in 2008/09, then governments, whatever their hue, Labour or Tory, must reduce their spending in order to restore the rate of profit. Therefore social and welfare services are cut, without any regard for the workers who depend on them. This has been the rationale of the government's current austerity policies.

Outsourcing, PFI and other wheezes that councils get up to are attempts to keep costs down. The concept of outsourcing was developed in response to the economic crises of the 1970s and 1980s.

Therefore, changing the government will not cut it. We need to organise and replace the capitalist system with one that is based on production for human need, not profits, which we call socialism.

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