Right.

In Berlin, we have a district called Neukölln, a poor district accumulated a lot of social and economic problems, such as high levels of violent crimes, drug abuse, a lot of homeless, gang wars etc.

The solutions for Neukölln problems devised by left-leaning municipal and city govs were absolutely fabulous, such as public swimming pools. At some point when it became clear that the district (or rather Berlin in general) is an eternal money pit, it was decided to cut its funding.

What was the response of local gov? Cut unnecessary and redundant services (sarcasm) like school security, drug addiction helping centers among others. Basically what they do is an open blackmailing, "you cut the funds, we are fucking things up", but that's how political blanket-pulling game works. Nobody likes funding cuts, so it's not uncommon that executives, local governments and various institutions sabotaging such initiatives.

What should they have cut in your opinion?

Bureaucrats, there are too much of them almost everywhere so they could probably cut their own numbers. Instead they choose to cut the workers, which is why it is so hard to do anything about them and why we have too many of them everywhere.

Pretty much. And since they are seen as "better" or more "educated" than the actual workers they are most of the time paid much more, so even though technically there might be less of them, they cost quite a lot more to society, for providing "services" that very often have negative value.

Libraries are one of the few non-statutory services of councils. Not all council services can legally be cut.

That inflexibility must end.

By repatriating all the obligations imposed by central government, such as social care, back to the central goverment budget? I agree. It's nonsense to use local democracy as a thin interposer layer on service delivery which is centrally funded.

In the US, local gov'ts often play this game by closing fire stations.