Eric Pickles and Michigan’s Emergency Manager Law
You’re hopefully aware by now that the government is slashing back the money provided to local councils to cover council tax benefit., The Tories are returning to the familiar ground of forcing everyone to pay regardless of ability as a way to drive up the fear of poverty. But for councils, this could be a massive problem: if everyone must pay something, what happens when many genuinely can’t?
What you might not know about, and what could seem almost irrelevant, is a dramatic attack on democracy that has been taking place in the state of Michigan. The heavily ‘Tea Party’ state government passed an “emergency manager law” over a year ago. Under it, any city or town that is deemed to be in economic need can be put under emergency measures, whereby the state governor strips all democratic function from the municipality and assigns an emergency manager to the town.
The added twist is that the emergency manager can be a company, or someone directly employed by a company. In other words, rather than a town council being forced to outsource contracts, the town council becomes a subsidiary of a company. Elected officials have no role, and the council have no power to do anything.
Half the black population of the state of Michigan now resides within the jurisdiction of an ‘emergency manager’. A town doesn’t even need to have gone bankrupt before this can happen. Towns like Benton Harbour have lost just about everything – there’s no duty to provide any specific service, and what is provided can be replaced with profit making services or a poor excuse to pass local money to big companies. All democracy, all accountability, is now over.
Granted, its been announced that Michigan’s emergency manager laws are “perilously close” to being overturned. But what’s worth noting is how cities and towns end up in financial difficulty. America has always gone with a system of minimal redistribution, meaning that towns only have the money they can raise locally. Towns abandoned by industry and with high unemployment can therefore have almost no income from which to provide services, although there is some money provided for key things like education – but not enough.
Does all this sound familiar? For one thing, the British equivalent of the emergency manager law was passed by Thatcher – but its a spectre looming over every council in Britain, effectively forcing them to pass balanced budgets, or have all economic power taken away from them. In the past, its been assumed that the person who would be imposed to sort the finances out would come from Whitehall, a civil servant. But the choice is in Eric Pickle’s hands, and he’s not likely to look to the public sector for help. I don’t know of a reason why the person handed the keys to the town treasury couldn’t be on secondment from Serco or G4S. I doubt Pickle’s would care if there even was one.
The Council Tax Benefit cutback is setting already economically depressed areas up to fail. Those which will see the biggest shortfall are those with the highest number of people needing social and other services. The government are moving away from a system of redistributing business rates, to allowing local councils to keep what they get, the rest be dammed. Of course, for an area with lots of businesses, this is good news – but those are the areas that need the money least. Some Councils are therefore losing big time.
The other side of the Council Tax Benefit cut is the subtle hand-tying of councils. They must decide who will pay more to make up for the deficit, except that they can’t decide to apportion any of it to pensioners. But they also have to be aware that retrieving unpaid moneys from people with few possessions is next to impossible, and jail sentences don’t produce money. There are already plenty of people in arrears. Councils will have to pay more to collect less, and when the necessary money is spread across a large number of people, even paying for civil action could be more costly than turning a blind eye.
As ever, we underestimate the policy-transfer between Republicans and the UK Conservative party at our peril. We’ve heard a lot in the anti-cuts movement about councils having the option to just pass a budget without any cuts. But the lesson from Michigan must be that this is precisely the desire of the Tories and their backers. In towns and cities across Michigan, there is no longer a local government with whom to lodge a protest. Instead, there are bureaucrats, often not even in those cities, who are physically removing infrastructure to be sold off for their own gain. The blight which an Emergency Manager picked by Eric Pickles could bring should not be underestimated. Nor should the determination of this government to make towns and cities fail.