21 per cent fall on local service spending

The Institute for Fiscal Studies has reported that overall spending on local services by English councils fell by 21 per cent between 2009-10 and 2017-18.

Reflecting the austerity drive imposed on local authorities by Conservative-led governments during the past decade, the research claims that some services has experienced unsustainable cuts.

For example, spending on planning and development and housing services fell by more than 50 per cent while cultural and leisure services and highways and transport also saw cuts of more than 40 per cent over the same period.

Such cuts have enabled councils to protect social care services from the full force of budget cuts. Spending on adult social care fell by five per cent between 2009–10 and 2017–18, although the numbers receiving care fell by much more. Meanwhile, spending on acute children’s social care services (such as social work, safeguarding and fostering) actually rose by 10 per cent.

The total amount of funding available to councils looks like it will become increasingly inadequate in the next 10 years as well, despite an end to overall budget cuts. The IFS says that, with annual increases to council tax of three per cent, rising costs and demands mean that adult social care could require 60 per cent of local tax revenues within 15 years, up from the current 38 per cent.

Even if council tax was increased by 4.7 per cent a year, adult social care could amount to 50 per cent of local tax revenues. This would leave little additional revenue to be shared between the whole raft of other services councils are expected to provide.

The report argues that either councils have to be provided with additional revenues, to enable them to continue providing existing services, let alone extend and improve them; or government and society must accept that councils can afford to provide fewer or lower quality services than they currently do.

David Phillips, associate director at the IFS and an author of the report, said: "Current plans for councils to rely on council tax and business rates for the vast bulk of their funding don’t look compatible with our expectations of what councils should provide. A proper national debate on how much we are willing to pay and what we expect of councils is therefore needed. Without it, we will default to a situation where the services councils can provide are gradually eroded without an explicit decision being taken – until ad hoc funding is found as a response to political pressure. Such an approach would not be conducive to long-term planning by either councils or the government."

Richard Watts, chair of the Local Government Association’s Resources Board, said: “With councils in England facing an overall funding gap of £8 billion by 2025, the IFS is right to reinforce our warning that unsustainable funding cuts and demand pressures are pushing local services to the brink.

“Pressures continue to grow in children’s services, adult social care, and efforts to tackle homelessness. This is leaving increasingly less money for councils to fund other vital services, such as the maintenance of parks, certain bus services, cultural activities and council tax support for those in financial difficulty to try and plug growing funding gaps.

“Huge uncertainty also remains about how local services will be paid for next year and beyond. The Spending Review will therefore be make or break for vital local services and securing the financial sustainability of councils must be the top priority. If the Government fails to adequately fund local government in the Spending Review then there is a real risk to the future financial viability of some services and councils. Fully funding councils is the only way to ensure councils can continue to provide all of the valued local services which make such a positive difference to communities and people’s lives."