Austerity could lead to Disraeli’s ‘two nations’ becoming reality

28th Nov 2013

As cuts bite deepest in the poorest areas, John Low says we risk dividing society even further – a risk first highlighted by Disraeli more than 150 years ago.

As cuts bite deepest in the poorest areas, John Low says we risk dividing society even further – a risk first highlighted by Disraeli more than 150 years ago.

The cuts continue unabated. As we approach the fourth austerity settlement for local government in December, a new report for JRF, from a team at Glasgow and Heriot-Watt universities, analyses the pattern of public spending cuts for England in 2013/14 and offers the first analysis of budget cuts in Scotland. At the same time, a new Audit Commission report confirms that councils serving the most deprived areas have seen the largest reductions in funding relative to spending since 2010/11. In December, another report from LSE will look at the impact of the cuts in London boroughs.

The cuts are biting deep (spending in England is set to fall by nearly 30% between 2008 and 2015 and by 24% in Scotland). Cuts in spending power are systematically greater in more deprived local authorities than in more affluent ones, with a difference of about £100 per head in both England and Scotland. The North-South difference in England is £69 per head. A major reason for these discrepancies is the scrapping of many grants which predominantly went to deprived authorities. As a consequence, the worst effects of austerity are being focused on councils with the largest concentrations of poorer people.

The bad news does not end there. This most recent study shows that, to date, local authorities of all kinds had largely been successful in directing cuts towards ‘efficiencies’ – cutting back-room jobs and other savings. But that changed in 2013/14 when more and more cuts were carried out by ‘retrenchment’ – reductions in front-line services. This trend is set to intensify in 2014/15. In the three case study authorities covered in the report, services already affected in these ways include services for young people, libraries, leisure centres, the arts, street warden and street cleaning services, and children’s centres.

The case study local authorities are trying to protect the most vulnerable from these cuts, and there is evidence that ‘pro-rich’ services (such as adult education or museums) have been subjected to harsher cuts than ‘pro-poor’ services (like children’s social care, Citizens Advice and services for homeless people). However, the researchers conclude that the cumulative effect of all cuts will still fall hardest on the poor, who cannot buy replacement services.

Is there any good news? The study highlights the considerable ingenuity used by the case study authorities to find creative ways of managing their budget gaps. For this, they have produced a clear, practical framework that could be used by any local authority to assess the impact of its cuts on poor people and places.

Austerity is hitting deprived communities hardest. The way this is deepening North-South differences is also evident. Unless we can somehow muster the national will to correct or mitigate these unacceptable divergences in how cuts affect deprived and affluent authorities, we will continue to reinforce fatal divisions in our society – a society in many ways as divided as that portrayed, so many years ago, in Sybil, or the Two Nations. Disraeli must be turning in his grave.