page_title: Rate-capping rebellion
section_title: Liverpool budget-setting in 1984
hierarchical_section_title: Rate-capping rebellion / Background / Liverpool budget-setting in 1984
caption_attribution_description: A photograph of Liverpool Town Hall
context_page_description: The rate-capping rebellion was a campaign within English local councils in 1985 which aimed to force the Conservative government of Margaret Thatcher to withdraw powers to restrict the spending of councils. The affected councils were almost all run by left-wing Labour Party leaderships. The campaign's tactic was that councils whose budgets were restricted would refuse to set any budget at all for the financial year 1985–86, requiring the government to intervene directly in providing local services, or to concede. However, all fifteen councils which initially refused to set a rate eventually did so, and the campaign failed to change government policy. Powers to restrict council budgets have remained in place ever since.
  Rising local government spending had long been a concern of central government, but direct powers to limit individual council budgets were controversial and some Conservative Party members opposed them. While the measure was passing through Parliament, internal dissent within Liverpool City Council led to prolonged delay in budgeting which only ended when government grants were increased.
context_section_description: When the Labour Party won control of Liverpool City Council in the local elections of May 1983, the council leadership was under the effective control of the Militant tendency, a group which had a majority of the active members of the Liverpool District Labour Party which directed the activities of the council group. The new leadership inherited a budget set by the Liberal Party administration which preceded them, which it considered was insufficient to meet their commitments to the electorate to the tune of £25m. The council, under Militant's guidance, began in Summer 1983 a political fight to win more resources from the government.
  With no alteration in the government's stance, there was already talk of the council adopting illegal tactics in its 1984 budgeting, and on 19 March the District Auditor Les Stanford wrote to every councillor warning that the consequences of not setting a legal rate was a budget crisis, with surcharge and disqualification for councillors. A group of six Labour councillors under the leadership of Eddie Roderick declared they would not approve an illegal budget, but the majority of the Labour group thought the letter was a tactic to scare them into backing down. The council leadership put forward an illegal budget on 29 March; after an eight-hour meeting, Roderick put forward an amendment to delay setting a budget until 11 April to let officers prepare a legal one. A suggestion that council leader John Hamilton and chair of Finance Tony Byrne form an emergency committee to control finances in the interim was accepted but the delaying amendment fell: it had the support of the Conservatives and six councillors in Roderick's group but the Liberal councillors opposed it and supporters of the council leadership abstained. Instead the six Labour rebels, 30 Liberals and 18 Conservatives voted to postpone consideration.
  A further budgeting meeting on 25 April saw the illegal budget again presented but owing to the opposition of the Roderick group it was defeated; the Conservative and Liberal groups could not agree on an alternative and the matter was allowed to drop; among the council leadership it was decided to delay setting a rate until after the results of local elections to one third of the council. In the event Labour gained seven seats, which gave a majority even if the Roderick Group opposed. A further council meeting was set for 15 May, but on 9 May Patrick Jenkin announced that he would be going to Liverpool on 7 June to look at housing conditions, and would be willing to meet council leaders while there. The council therefore postponed budgeting again until the outcome of these talks was known.
  Nothing resulted from the meeting with the councillors on 7 June, with the council leadership still putting forward an illegal budget, but Jenkin agreed to meet with them again in London on 9 July. At this meeting Jenkin told the councillors that he could offer about £20m extra money for housing. This concession was treated by the leading members of Liverpool City Council as a major victory, and two days later the council set a legal budget.
caption: Liverpool Town Hall, headquarters of the city council and focus for some of the public campaigns it led over government grants.
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