Austerity’s £18bn impact on local services

FT analysis reveals local government welfare system creaking under weight of growing demand

Local authorities have scrapped access to vital services for 150,000 pensioners and cut child protection spending by 8 per cent since 2010, as cash-strapped councils scramble to cope with George Osborne’s austerity drive, analysis by the Financial Times has found.

Across Britain, services have been abandoned and entitlements altered as the chancellor has conducted one of the developed world’s most effective exercises in deficit reduction.

A detailed breakdown by the FT of council spending over the past five years has revealed that local government services are creaking under the weight of growing demand as local authority budgets have been cut by £18bn in real terms since 2010 — with at least another £9.5bn expected by the end of the decade.

This is equivalent to a fifth of spending by England’s 300-plus local authorities, whose budget for running services, from social care to road sweeping, has been reduced at twice the rate of cuts to UK public spending as a whole.

Councils’ attempts to meet rising demand with diminishing resources are illustrated by the number of children forced to stay in bed-and-breakfasts or shared hostels for more than six weeks at a time — a breach of the law since 2003.

English councils broke that law 701 times on December 31 2014, affecting an estimated 1,000 children — a sevenfold increase on the same day in 2009 — as they struggled to accommodate the growing number of families caught by Britain’s housing crisis.

A surge in spending under Labour between 2000 and 2010 has been followed by five years of sharp retrenchment, which by 2012 had already taken expenditure back to levels last seen in 2005. However, councils now have the added responsibility of coping with far larger numbers of elderly people.

Tony Travers, professor of government at the London School of Economics, said the cross-party consensus against raising taxes on people on average earnings meant that Britain was attempting to sustain a German or French-style welfare system with US-level taxes, “and that means there isn’t much room for everything else”.

Gary Porter, Conservative chairman of the Local Government Association, said that if the reductions in funding were “anything like the level that people are predicting”, in some areas all but statutory services would be stopped.

The FT’s analysis shows the extent to which statutory services are already under pressure. Children’s social work departments, faced with a surge in referrals after public awareness was raised through a series of abuse scandals, have seen their funds cut by the equivalent of more than £600 for every referred child.

By 2014, some 150,000 elderly disabled people — who five years ago would have received help with washing and dressing — no longer qualified as councils tightened eligibility criteria to help only those with the most severe needs.

Yet public satisfaction with how councils are run has risen or stayed the same in most areas and councils are becoming more entrepreneurial as they find alternative sources of revenue.

Between 2009-10 and 2013-14, local government cut its administrative spending by £1.9bn, or more than 19 per cent in real terms, through measures such as staff reductions and merging services with other councils. However, these efficiency savings are unlikely to be repeatable.

“Local government this year has to make savings of 9 per cent,” said John Jackson, a council social services director who speaks for the Association of Directors of Adult Social Services.

“That’s not coming about from overheads. Most of that will have come from reducing the resources available for public services. That’s not possible without reducing services,” he said.

Universal services aimed at all Britons, rather than just the most needy, have also suffered. Councils have ended, or reduced the frequency of, some household waste collections, with bulky household goods collections being cut by more than a quarter in three years.

The part played by councils in protecting public safety, through local environmental regulation, food inspections and workplace health and safety checks, has also been scaled back by sharp cuts, as government directions to reduce “red tape” have been given further impetus by the need to save money and reduce staff.

In 2009-10, council inspectors in England made 56,175 visits to local factories and other workplaces to ensure health and safety rules were being followed and employee health safeguarded. By 2013-14, the number had been slashed by 91 per cent, to just 4,901 inspections, while 53 councils opted to abandon proactive inspections altogether.

The Department for Communities and Local Government said councils had “worked hard over the past five years to deliver a better deal for local taxpayers, keeping council tax down while public satisfaction with services has been maintained”.

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