Poorer areas face £100 per head greater budget cuts compared to rich ones – JRF report

28th Nov 2013

Deprived areas across England and Scotland are seeing larger cuts to budgets - of around £100 per head - compared to affluent ones, according to a new report published by the Joseph Rowntree Foundation (JRF).

The interim report – Coping with cuts? Local government and poorer communities - is part of JRF’s programme of research to track the impact of tighter public spending and the state of the economy on poorer people and places. 

Local government spending (excluding police, schools, housing benefit) is set to fall by nearly 30% in real terms between 2008 and 2015 in England, while Scotland will see a 24% reduction.

The research analyses the scale and pattern of cuts in spending on local government in England and Scotland since 2010. It also includes involved detailed analysis of the approaches taken by three case study councils (Newcastle, Coventry and Milton Keynes).

The report found:

  • Cuts in spending power and budgeted spend are systematically greater in more deprived local authorities than in more affluent ones, with a difference of around £100 per head in both England and Scotland.
  • Deprived authorities have seen greater reductions in spending power (down by 21.4%) than affluent ones (down by 15.8%). A major reason for this discrepancy is that deprived authorities were more grant dependent than other authorities. The scrapping or consolidation of many specific grants (some of which were particularly geared to tackling deprivation) almost inevitably means that local authorities with the highest levels of deprivation will be disproportionately affected by austerity.
  • Cuts are also generally greater in the North and Midlands than in the south of England, and in the west rather than the east of Scotland. The North-South difference is £69 per head.
  • In the case studies, substantial savings have been generated by a range of 'efficiency' programmes (including the loss of many ‘back room’ jobs). But the report warns opportunities to identify further such savings are rapidly diminishing.
  • ‘Efficiency’ strategies are increasingly being replaced by strategies which will impact directly on front-line services. A ‘retrenchment’ of local government services is underway – councils will be delivering or supporting fewer services and those services which continue may be targeted more narrowly on the most vulnerable and disadvantaged groups only. People will be expected to do more for themselves – from running leisure centres or caring for elderly neighbours to picking up litter.

Local authorities are also seeking to balance their budgets by increasing income and reducing demands on services via measures such as: developing businesses and attracting jobs; refocusing resources on the most vulnerable; and investing in programmes to stop needs intensifying. But the study found that:

  • There is a real risk that an increased targeting of services on the most vulnerable groups will undermine the capacity of local authorities to provide a broad range of services across the social spectrum. In turn, this will undermine the willingness of council tax payers who do not rely on these services to continue paying for them.
  • Local authority officers are struggling to implement significant changes to the local authority role at a time when staff resources are being cut. As one officer remarked: “If you’re going to drive a huge change agenda, and the biggest change agenda that I’ve probably seen in 30 odd years of government – you’re going to need more capacity, not less.”
  • The return from investment strategies will not be immediate, and in the short term the contributions from economic growth will not be significant in terms of reducing needs. Further, in relation to economic growth, localities do not compete on a ‘level playing field’. There is a danger that an increasing expectation that councils can fund services through growth will increase the gap between affluent and deprived places.

John Low, Policy and Research Manager at JRF, said: “This is an important and very timely report which provides graphic illustrations of how spending cuts are playing out on the ground. As we approach the fourth austerity settlement for local government in December, it is clear the cuts are biting deep into the poorest and most deprived communities. Unless we can muster the national will to correct or mitigate the unacceptable divergence of resources between more and less affluent authorities, we are slowly but inexorably creating a more divided society.”

Annette Hastings, co-author of the report, said: “The changes underway within local government should not be underestimated. They will have significant consequences for the broad range of ordinary people who use local public services. If budget cuts continue at the levels anticipated, all but the most vulnerable will be expected to do more for themselves and to supplement state services with commercial alternatives. While the most vulnerable have been protected thus far from the worst effects of budget cuts, it is not clear how long this can continue. And we might also be concerned about how the people who just miss out when resources are refocused can cope with service reductions – we could be storing up problems for the future, for them and for society more generally.”

Glen Bramley, report co-author, said: “The extent of these cuts, sustained over a period of years and in the face of rising demands and costs, is unprecedented. Quite complex changes are happening in the financing system as well, which makes it difficult to track the impact clearly and completely. However, we can say that the extent of the cuts is greater in the more deprived authorities, and that some important services relied on more by poorer people are being cut substantially.”