Thatcher's legacy for local government | Davy Jones Consultancy
15 Apr 2013

Thatcher’s legacy for local government

Let’s leave aside arguments about the Ding Dong song, celebrations or state funerals and the rest. I want to focus on the legacy of Margaret Thatcher for local government.

Hostility to local government

The general consensus from those who knew her was that Thatcher loathed local councils. One of her closet allies, Nicholas Ridley, famously set the tone for her government’s attitude by arguing that councils should only have one meeting a year to let out the contracts on all their services to private bidders!

Immediately on taking office, Thatcher proposed major curbs on the activities of trade unions and cuts to local government funding (ring any bells …?). She then introduced centralised block spending grants with a system of targets and penalties for “over-spenders”.

When councils resisted, she introduced centralised “rate-capping” where councils could not set local rates (the precursor to Council Tax) above a Government-prescribed limit. When councils used creative accounting techniques to avoid the limit, the Government successfully urged that Labour councillors be surcharged by the courts.

Hostility to local democracy too

Even more outrageously, when the Greater London Council led by Ken Livingstone continued to oppose the Government on a range of issues, she introduced legislation to abolish it altogether, despite huge opposition in London to this attack on democracy.

Famously, of course she went on to introduce the infamous poll Tax, which eventually led to her downfall, due to its intense unpopularity, and the resulting decline in the fortune of the Tory Party itself.

And of course, one should not forget that Thatcher also began the long drive to privatise previously public services – gas, electricity and water all in the 1980s.

Overall assessment

Taken overall, the Thatcher government had a hugely negative impact on local government. No other government has done more to undermine and restrict the powers of local authorities.

Thatcher legitimised the idea and practice of central government restricting and tightly controlling local government finances – to a degree that was unheard of here or abroad. Local government has never managed to regain control from central government.

Worse, Thatcher also managed to make the whole issue of local government taxes thoroughly toxic. Forever associated with the Poll Tax, its successor – the Council Tax – is seen as a huge wasteful burden on citizens in a way that income tax is not. Local government arguably lost not just a battle but the whole war over the role of local taxation under Thatcher.

Finally, abolishing a layer of local government (the GLC) simply because she took a dislike to it and initiating the privatisation of council services – begun under Thatcher and continued at different paces by successive governments since – epitomises a government that changed the mould decisively, perhaps for ever, by relegating local government to a second-rate and ever-declining role in local communities.

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