Local authorities are caught between a rock and a hard place when cutting budgets, but evidence from Scotland shows they can avoid making a bad situation worse by protecting those most in need
The on-going public spending cuts raise concerns about potential adverse impacts on disadvantaged and vulnerable groups. The scale of cuts to services and welfare payments is unprecedented and looks set to be much more prolonged than originally envisaged by the Coalition. Central funding for local government is being reduced by 26% in real terms between 2011 and 2015. Many social security payments are likewise not keeping up with inflation.
Councils are caught between a rock and a hard place, but they can still avoid making a bad situation worse. In a report due to be published next week for the Joseph Rowntree Foundation, Managing the social risks of public spending cuts in Scotland, we look at five Scottish local authorities’ decision-making about budget cuts, and identify current practice in protecting the vulnerable and disadvantaged.
We found local authorities are well placed to moderate the adverse effects of austerity in their communities. To do this they must seek to mitigate as far as possible the social risks faced by the most disadvantaged and vulnerable and certainly avoid exacerbating those risks by ill-considered cuts.
To achieve this, the report recommends that councils build upon their existing (albeit inadequate) equalities impact assessment procedures to consider broader social risks. This can be done by using a more comprehensive fit-for-purpose social risk impact assessment model, forms of which are already in use by some international development organisations.
The speed, scale and year-on-year aggregation of the cuts create substantial risks for low-income families in particular, but also for wider groups including the elderly and disabled – people crucially dependent on public services, welfare payments and tax credits.
Councils have had to balance their budgets in line with cuts to their central funding because they have little or no scope to raise more money from council tax and charges for services. Hence, they are preoccupied with the need to make immediate substantial savings and this has left them little time to consider the adverse social and financial impacts in the longer term. Cuts to back-office functions and the lack of adequate data on vulnerable groups compound the challenges.
The need for public services will rise substantially if social and economic disadvantage is exacerbated as a result of the public sector austerity and, in turn, this will create considerable financial risks for councils.
Councils in our study conducted service cuts in compliance with statutory duties, but their discretionary services had been reduced disproportionately. This could lead to erosion or complete loss of preventative services, though the resulting long-term impact might be higher social and economic costs. As the head of finance in one authority said:
‘We have missed an opportunity to sort things out in the past 15–20 years in relation to the separation of discretionary and statutory services. They [the local authority] have never quite [understood] – if we cut here (in one area) then that (in another area) goes out of control. Youth services is a classic example of this... what impact will that have on the police in six months’ time? I don’t think the long-term impacts of service reconfiguration have been considered sufficiently.’
Whether or not you agree with the rationale for reducing public expenditure, we should still be concerned about rapidly rising inequality and the risks that creates for those in need: children, those disadvantaged by health conditions beyond their control, and for deprived communities blighted by a lack of skills and opportunities for employment. If not, the costs in the long run may be much greater – making a bad situation much worse.
Darinka Asenova and Stephen Bailey are researchers at the Glasgow School for Business and Society at Glasgow Caledonian University. Managing the social risks of public spending cuts in Scotland will be published on 22 April
