Central cuts, local decision-making: changes in local government spending and revenues in England, 2009-10 to 2014-15

Abstract

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.

A time of revolution? British local government finance in the 2010s

“…13 In addition to revenue from grants and council tax, councils can also draw down or pay into their reserves. Note that we do not consider here any service income accruing to local authorities; see Innes and Tetlow (2015) for details of how this has changed up to 2014-15. 16 The exception is other services, spending on which has increased 30.8%.…”

From the desk to the front-room? The changing spaces of street-level encounters with the state under austerity

“…The withdrawal of local government funding linked to deprivation has resulted in the most disadvantaged areas of the UK being most affected by cuts to local government services (Innes and Tetlow, 2015). Local authorities, aided by the rhetoric of localism and decentralisation and the removal of 'ring-fencing' for certain funding streams, have responded to these cuts in different ways, often attempting to protect services which are viewed as 'propoor' (Hastings et al, 2015: 96).…”

“…The effects of austerity measures on public services, the delivery landscape, and 'street-level' encounters with the state, are set out in the next section, drawing extensively on four comprehensive research reports that examine the uneven impacts of the government's welfare reforms and cuts to local government spending (De Agostini et al, 2015;Innes and Tetlow, 2015;Hastings et al, 2015;Beatty and Fothergill, 2016). The TFP is then introduced and briefly summarised, before attention is drawn to the rhetorical importance of getting 'in through the front door' of the homes of 'troubled families'.…”

Territory, power and statecraft: understanding English devolution

“…The new mayors will take office in the context of significant cuts to local public spending (Innes & Tetlow, 2015;National Audit Office (NAO), 2016), and the departure of Osborne, architect of the 'Northern Powerhouse' agenda that provided the backdrop to many deals, from the government in July 2016. This makes understanding the forces underpinning developments in English governance even more timely, especially in relation to the territorial dynamics and constitutional forces that may have (intentionally or unintentionally) been unleashed.…”