Bristol… A city too rich to help and too weak to influence

By Tony Dyer
Feb 27, 2010

Lack of power: Without proper control of its own budget, and in particular access to the wealth generated from its commercial sector, Bristol will continue to be a divided city

By Tony Dyer

Elsewhere on this site, the much ado about pretty much nothing that constituted the debate on the Bristol City Council’s proposed budget has been covered in his own imitable style by the Bristol Blogger.

At the same time, the fact that five hours plus of debate took place regarding just 1% of the budget also serves to highlight the lack of control and flexibility that the City Council has in delivering its own budget.

A simplistic analogy might be to compare it to being a supermarket manager whose success is, of course, judged on how much of the stock in the store is sold.  Except, in this scenario, for 60% of the stock any price control is beyond the manager’s control and the revenues raised will be taken away and some of it given back depending on how much stock he has rather than the value of the stock sold.

For most of the rest of the stock if changes to the price are too high, the store manager will be penalised by the national stores manager.

In addition, some sections of the store that deal with particular items are under their own control and are able to set their own prices.  Furthermore, the manager knows that if any particular product sells particularly well there is a good chance that it will be taken away and given to a separate, private manager (although our store manager may still have provide support at a preset cost).

Our manager is also aware that the national stores manager is under pressure and is looking to cut costs but won’t tell our store manager for another couple of months what those cuts will be, and if the current national manager is replaced, which is likely, the probable replacement has already said that he too will cut costs but that they will be different cuts although he doesn’t know how different and how deep those cuts will be until he gets the job.

Have we also mentioned that, in this particular supermarket, a large proportion of the customers that come from further away will use the products that it sells but will then pay the manager of a different store for those products and usually at a price lower than that paid by the directly paying customers?

And we haven’t even looked at how the store manager is meant to repair the parts of the store that are damaged, not working properly or simply obsolescent or how to pay to upgrade the store to cope with new products and customers.

Welcome English local government in the 21^st century.

The UK, and more particularly its English component, is the most highly centralised state in the western world, with almost every decision being made in Westminster (or by quangos appointed and controlled from Westminster) and driven by influences that are often relatively unaffected by what might be happening beyond the M25.  It was already a highly centralised state prior to 1979, but the election of Mrs Thatcher’s government and its commitment to a monetarist policy intensified the level of centralisation.

Monetarism required a very tight control on money supply and also demanded a tightening on public expenditure. One thorn in the side of this policy was the ability of, mainly Labour-led, local authorities to set and spend their own budgets particularly as they had the ability to set both Domestic and Non-Domestic (Business) rates at a local level.  These authorities were not prepared to slash public expenditure on what they considered to be vital public services for the most vulnerable members of society.  Something had to be done.

The solution for the Conservative government, ironic in many ways given its famed aversion to nationalisation, was the nationalisation of non-domestic rates thus removing them from local authority control.  From that point onwards, local authorities were increasingly reliant on grants from central government for the majority of their budget, including non-domestic rates being redistributed nationally based on a per capita population basis or on the local authority reaching certain business targets — targets set by central government, of course.

This situation of nationalised non-domestic rates continued under the Labour government, although it was rebranded and is no longer a way of controlling high-spending profligate Left-wing councils but a way of redistributing wealth from the rich South to the poorer North.  In reality of course, it redistributes wealth from poor people in rich cities to rich people in poor cities.  Southmead and Hartcliffe residents can console themselves that the extra 2% on their council tax will allow Bristol’s business rates to be used to fund a lovely new arts complex in Hull or Liverpool.

As a result of these largely politically motivated changes, this means that compared to their equivalents on the European continent, English provincial cities have considerably less independence in both governance and especially finance with the ability to raise only 40% of their own revenue generation compared to twice that in most European provincial cities.

As a result English provincial cities consistently come out near the bottom of most league tables that compare western European cities on subjects such as quality of life, economic performance, housing standards, public services, primary and secondary education and so on.  The lack of independent budgetary control is not the sole cause for this but it is certainly a significant contributor.

In Bristol’s case, the situation is compounded by its geographical position and perception of being a “rich” city.  Another aspect of the monetarist policy introduced by Thatcher was its subjugation of the UK provincial manufacturing base to the goal of promoting and expanding the financial services sector based in the City of London.

London and the South East consistently dominated economic policy with national decisions inevitably being a case of “what’s good for the City must be good for the country” even when it quite demonstrably was not.  The traditional role of a banking sector in growing and expanding the domestic economy has never been the dominant role in the City of London which has always seen the world as its oyster, forcing domestic manufacturing to compete for investment with developing overseas markets with much lower social overheads.

This separation of the City’s financial sector from any substantial linkage with long-term investment strategy in the domestic market has seen the North/South divide intensified as non-service industries have been inevitably squeezed and out-competed in a global marketplace (a style of marketplace which suits the City of London’s own remit) where their overseas rivals usually do have recourse to a supportive domestic financial sector.

New Labour has sought to compensate for the resulting imbalance in wealth generation by redirecting high levels of public investment north of the Watford gap to redress the balance.  But Bristol isn’t in the north, and nor is it in the South-East — it is in nowhere-land in the battle for municipal wealth redistribution.

The fact is that Bristol is in the unenviable position of being seen as too rich a city to be hugely deserving of any substantial public investment, but not powerful enough a city to have the national economy geared to meeting its needs.

As a result, we find ourselves living in a city that consistently tops league tables of English provincial cities for most commercial measures but has the worst transport infrastructure in the country.  We live in a city that a recent EU report listed as the core of the third most economically productive region in England (after the city of London, and the Thames “Silicon” Valley) but also consistently bottoms out in state education tables.

We live in a city that has both the highest number of “least-deprived” wards of any major English city but also has some of the “most deprived” wards anywhere in the country.  In fact, many of us who consider ourselves to be of and part of the city, find that because of some arbitrary line drawn on a map that bears little or no relation to reality that we are not even living in our city despite both affecting and being affected by it on a daily basis.

It is difficult to see how this less than satisfactory situation is going to change as long as Bristol itself has only limited capacity to make the decisions it needs to make in order to properly address those areas such as transport, education and deprivation that so badly affect it.

Without proper control of its own budget, and in particular access to the wealth generated from its commercial sector it will continue to be a divided city, and a substantial proportion of its inhabitants will continue to be unable to take full advantage of being part of one of the most vibrant commercial centres in Europe.

In 1373, Bristol was made a county in its own right in order to make the most of its own wealth and later still was also made a City.  In 1974, that first ancient right was abolished and, as we have seen, in subsequent years, its independence and authority as a city has also been reduced further and further.

The City and County of Bristol has ceased to exist in anything but name. Welcome to the Village of Bristol.