There have been a number of hard fought battles between central government and (usually left-wing) local authorities.
Lambeth
One major clash came in 1984 when the Thatcher government sought to constrain what it regarded as excessive spending by local authorities. Her chosen weapon was the Rates Act which capped the taxes that local authorities could levy. Around 20 councils hoped to cooperate to force a change of policy but all except Liverpool (led by Derek Hatton) and The London Borough of Lambeth (led by "Red' Ted Knight) backed down - but even their protest eventually failed and they were forced to set a rate. Ted Knight had to pay substantial fines as well as being disqualified from political office,
The difficulty for the national Labour Party was that Mr Knight's activities and comments gave ammunition to their opponents. He saw capitalism as an evil to be overthrown and regarded Christmas, for instance as a bourgeois deviation and hit the headlines when, during the 1981 Brixton race riots, he complained that 'Lambeth is now under an army of occupation'. Senior Labour Party politician Peter Mandelson responded that "Given the choice between having the Labour Party and Ted Knight in the borough or the police, 99 per cent would vote for the police'.
Mr Knight and his colleagues created and left behind an appalling badly run council with terrible financial problems. Some of the problems are summarised in the 1995 Appleby Report.
Even worse, in most ways, was the consequential neglect of council services, including children's services. This extract from the report by the Independent Inquiry into Child Sexual Abuse very briefly summarises the horror and its causes.
It is hard to comprehend the cruelty and sexual abuse inflicted on children in the care of Lambeth Council over many years, by staff, by foster carers and their families, and by volunteers in residential settings. With one or two exceptions, a succession of elected members and senior professionals ought to have been held accountable for allowing this to happen, either by their active commission or complicit omission. Lambeth Council was only able to identify one senior Council employee, over the course of 40 years, who was disciplined for their part in this catalogue of sexual abuse.
In the 1980s, politicised behaviour and turmoil dominated the culture of Lambeth Council. The desire to take on the government and to avoid setting a council tax rate resulted in 33 councillors being removed from their positions in 1986. That event and its consequences meant, amongst other things, the majority of elected members were not focussing their attention on what should have been their primary purpose of delivering quality services
The Greater London Council
At around the same time, Mr Knight's great mate, Ken Livingstone was leading a controversial London-wide Labour administration which was pursuing its own industrial strategies, tried to introduce subsidised public transport and underwrote various projects which did not appeal to th Conservative Government on the other side of the river. Mrs Thatcher accordingly simply abolished the GLC in 1986 and London remained without a metropolitan authority until Tony Blair created the Greater London Authority in 2000.