Some of the "loony" authorities had loads of political appointees working on high local government salaries and spending all their time working for the Labour party. Non-jobs at the taxpayers' expense. As a result strict rules were brought in capping the number of political research assistants to council groups, capping their pay and banning them from political activity. And huge swathes of pubic employees became politically restricted.
Loony' local authorities were deliberately careless at managing money. They tolerated waste, inefficiency and lots of low level corruption (such as multiple grants to local 'community' organisations which didn't have to show what they did for which people).
Many local authorities deliberately spent more than they could, expecting that a future labour government would bail them out. The Tories kept winning and the councils thought it was more important to make political points than look after the people who paid their taxes.
I remember all sorts of dodgy financial deals which had stings in the tail ten or more years later, when the originators had long gone, leaving the local tax payers in the lurch.
Too many of them didn't gave a monkey's about running a good council for the benefit of all the people that lived there; just looking out for themselves and their chums. They were more interested in political game playing than changing their communities.
Staff morale in many of these councils was rock bottom. They were badly managed. Sick rates were through the roof. People who didn't do their job properly were allowed to carry on and everyone else had to do their jobs around them.
That's just for a starter.
And yes, I worked in local government in central London a very long time ago. It was shocking.