Despite its defeat in the 1979 general election the Labour Party continued to make advances in the local elections of 1980 and 1981, most notably securing control of the Greater London Council (glc). The Labour Party having being denied access to the levers of national power, such gains appeared to offer it the opportunity to pursue a socialist agenda on a local or regional basis. Further, as a consequence of the reorganization of local government in 1974, there now existed local authorities, particularly in metropolitan areas, which had the resources to employ staff to research, formulate and pursue policies on an extensive scale. Of significance, too, as regards the promotion and implementation of such policies, was the political progress made in local government by the Labour Left in the late 1970s and early 1980s, which resulted in their control not only of the glc, but also the West Midlands County Council, Sheffield City Council and a number of London boroughs. This rise of a new municipal socialism replicated at local level the more general resurgence of the Left within the party in the late 1970s and it had comparable consequences in terms of support for “alternative (local) economic strategies”, similar to those which the party was offering the national electorate.

Given the straitened economic circumstances that many councils confronted in the early 1980s, there seemed a particularly pressing need for a radical departure from existing canons of local economic policy.