The financial crisis of 2008 and associated recession led to a permanent deterioration in the outlook for the UK's public finances. As part of the fiscal consolidation implemented by the UK government, grants to local authorities in England were cut by more than a third in real terms between 2009–10 and 2014–15. With limited revenue‐raising powers, these cuts meant drastic reductions in local authority spending in total and per person: local authority spending per person fell in real terms by 23.4 per cent over this period. But the size of spending cuts per person differed greatly across local authorities, ranging from 46.3 per cent to 6.2 per cent. On average, the distribution of the cuts across authorities does not seem to reflect the principle of ‘equalisation’ that was, at least in theory, in place up until 2013–14; the local authorities with least revenue‐raising capacity (which are typically the most deprived) have on average actually seen the largest spending cuts. Moreover, this pattern looks set to continue over the next five years, with those authorities that have seen the largest cuts to date also expected to see the largest cuts in future.
Executive summary• This briefing note focuses on net spending by local authorities on public services.We exclude spending on police and fire and rescue as this is not directly under the control of single-tier and county councils. We also exclude spending on education, public health and a small component of social care as local authorities' responsibilities for these areas have been changing over time. During this parliament, this measure of spending by local authorities in England has been cut significantly in real terms. Between 2009---10 and 2014---15, it was cut by 20.4% after accounting for economy-wide inflation. Taking into account population growth over this period, spending per person was cut by 23.4%.• These cuts to local authority spending were similar in magnitude to those seen on average across central government departments outside protected areas such as the NHS, schools and official development assistance.• Local authorities have had to cut spending in the face of falls in their main sources of revenue. Grants from central government to local government (excluding housing benefit grant and those specifically for education, public health, police, and fire and rescue services and the housing benefit grant) have been cut by 36.3% overall (and by 38.7% per person) in real terms between 2009---10 and 2014---15. Total council tax revenues have grown slightly in real terms over this period (3.2%), although this still represents a decline of 0.7% per person. Taking grants and council tax revenues together, local authorities' total revenues have fallen by 19.9% overall (or 22.9% per person) in real terms. Council tax revenues funded just over half of local government spending in 2014---15, up from 41% in 2009---10. • Even though revenues have fallen significantly, on average local authorities have spent less than they received from grants and council tax over the last five years, meaning that on average they have increased their reserves rather than drawn from them. The average increase in reserves across local authorities in England was an increase equal to 5% of annual spending in 2009---10.
For many years, survey data on household wealth have been somewhat limited, but the situation is improving in the UK and internationally. This paper uses the new Wealth and Assets Survey (WAS) to document some key features of the distribution of household wealth in Great Britain. We quantify the extent of inequality in total wealth and in its broad components (financial wealth, housing wealth and pension wealth). Exploiting the fact that WAS is a longitudinal survey, we show trajectories of wealth and its components over * Submitted August 2015.The authors gratefully acknowledge funding from the IFS Retirement Saving Consortium and the Economic and Social Research Council (ESRC) through the Centre for the Microeconomic Analysis of Public Policy at IFS (grant number
Between 2000-01 and 2010-11, total police spending increased by 31% in real terms. This was mainly due to increases in precept revenues, which increased from 17% of total revenues to 25%. • The forces that saw the biggest increases in police spending over the 2000s were those that increased revenues from the precept by the most. North Yorkshire more than tripled its precept revenues between 2000-01 and 2010-11 and saw overall revenues increase by more than 50%, whereas Northumbria increased precept revenues by only a third and saw overall revenues increase by just 14%.
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