Coping with the cuts? Local government and poorer communities

It was clear from the moment the Coalition Government announced its austerity programme in 2010 that local government services would take a disproportionate reduction in resources, unprecedented in recent times.

The ‘protection’ of health and schools budgets meant that the impact on other services was bound to be much sharper. Our new report from ongoing research for Joseph Rowntree Foundation provides independent evidence on the impact of these cuts and how in particular they will affect more deprived areas and groups.

Trying to trace the effective changes in grants and spending power has not been helped by the complex changes in the system and the way it is presented, and it is telling that the government has not made its own estimates of the overall change in resources across the whole period from before the 2010 Election to 2015. Our estimates may not be perfect but they are an attempt to capture the whole picture. Local spending in England in 2015 will be nearly 30% below its 2009 level in real terms (excluding schools, police and Housing Benefit), and the share of these services in GDP will fall from 5.1% to 3.6%.

Professor Glen Bramley
Professor Glen Bramley

Are we ‘all in it together’, and has much attempt been made to protect the poor and deprived from this onslaught? It is quite clear that more deprived areas have not been protected, and indeed they are seeing significantly greater budget cuts in absolute and proportionate terms – £100 per head more up to 2013. Poorer regions (the north) are seeing greater cuts than better off regions (the south), by about £70 per head.

On the other hand, authorities have tried to shelter more deprived groups to some extent. Services targeted most towards the poor have been cut less severely than those used by all groups equally or used more heavily by higher income groups. But most services are being cut to some extent and this includes some used a lot by poorer people, like housing, as well as services like culture used more by the better off. And poorer groups rely on public services to a much greater extent and they have fewer alternatives – they cannot just buy additional care privately, for example.

Has devolution protected local services, particularly for poorer communities, from cuts in Scotland to a greater extent than in England? Surprisingly not is the answer: although the extent of cuts in Scotland is rather less (24% vs 29% by 2015), the difference between deprived and affluent localities is almost exactly the same (£90 per head) as in England.

Do simple changes in expenditure tell the whole story? Our analysis for case study local authorities shows very clearly that the ‘budget gap’ faced by local decision-makers is markedly greater than the net changes in spending would suggest. This is because they face rising costs and demands for services, as well as falling budgets. Typically they are having to close a budget gaps of around 9% or more each year, allowing for cost pressures and unavoidable commitments (pensions, redundancies, etc.).

Is there a reservoir of inefficiency in local government which can be tapped, so that spending cuts at these levels can be achieved without impacting much on front-line services to people? Our research has developed an innovative but robust method of classifying budget changes in our case studies. This shows, rather to our surprise, that in the first couple of years of austerity, the majority of changes have been in the category of efficiency improvements (e.g. back office streamlining). However, as we look forward to planned changes up to 2015, it is clear that the balance shifts markedly towards ‘retrenchment’ – changing service responsibilities in such a way that local government is doing less, and that people themselves will have to fend for themselves more. Local authorities are thinking creatively about a ‘third way’ to bridging these gaps, through investing to grow the local economy so prevent and reduce future needs. But it is clear that this strategy is not actually able to make a large contribution to bridging the gaps in the foreseeable future.

Will the nature of local government be changed by this episode of austerity? I fear for the future of local government, in two respects. On the one hand, the traditional autonomy of local councils has been greatly eroded, by the centralisation of schools funding, by Council tax freezes, by likely conditions on social care funding, and by the sheer pressure of funding cuts colliding with ‘statutory responsibilities’. On the other hand, the understandable and commendable focus on protecting the most ‘pro poor’ services and targeting help for the most vulnerable, in this context, may lead to an accelerating withdrawal of general services used by a broad cross-section of the population. Local government thereby becomes a ‘residual’ service for the poor and vulnerable, a kind of new Poor Law Guardians, and not an institution which ordinary working people or the middle classes engage with or see as relevant.

Glen Bramley (Professor of Urban Studies, Heriot-Watt University, Edinburgh.