We need to ease back on council cuts

26 Mar 15

The cuts imposed on councils are too steep, happening too fast and unfairly distributed. There needs to be real-terms growth in the resources given to local government and distribution according to social need.

The present austerity narrative is sterile, with an assumed trade off in which future prosperity is predicated on cuts. The CLES Manifesto for Local Economies sets out ideas which break us out of this narrative. Decent public services and fairness work with and for prosperity, not against it.

Speedy and deep cuts to public expenditure have led to reductions in service, undermining quality of provision. Coupled with an increase in demand, there is concern across local government that we are heading towards a crisis.

Furthermore, the cuts have been unfair, with reduction in spending power more severe in deprived local authorities than in affluent ones – a difference of around £100 per head.

It is time for a change and in the CLES Manifesto we come up with a range ideas which seek to put fairness at the heart of local government funding.

Firstly, government must ensure real terms growth in resources to local government. At present the overall Settlement Funding Assessment for England will fall by £3.3bn from £24.1bn in 2014/15 to £20.8bn in 2015/16 – a drop of 13.9%.

On the back of the existing cuts since 2010/11, it’s too much too fast. To avert a funding meltdown and to protect the most vulnerable, we need to restore funding to 2014/15 levels for each year of the next parliament. On top of that, an additional 0.5% real terms growth (above inflation) should be implemented. This will cost £1.48bn extra to 2019/20. This represents a total increase in resources to local government of £4.78bn (£3.3bn increase for 2015/16 and £1.48bn over five years) for the life of next parliament. This scale of funding does not represent a reversal but would part halt the decline, protect some services and give local government a chance to secure existing reform and innovations in service delivery.

Secondly, we must redistribute resource according to social need. This is about abandoning a wholesale uniform approach to public spending cuts and future resource allocation in favour of a robust needs-based approach to public service funding that protects those locations with greatest social need.

Thirdly, we must assess the economic and social impact of any funding change. There is a lack of appreciation around the overall impact of funding cuts on local services. Not enough work has been carried out on modelling how cuts may adversely affect other areas of the public sector, for example cuts in local authority adult social care could lead to bed blocking in hospitals.

Government should assess the impact of all austerity related measures on inequalities. This evidence can be used to devise ways of ameliorating adverse consequences both nationally and locally, leading to a fairer and more equitable programme of reform.

Our future relies on public services and the cuts are damaging that future. For the sake of our local economies, local services and the many who rely on them, we need now to act more fairly and ease back on the cuts.

  • Neil McInroy

    Neil McInroy is chief executive of the Centre for Local Economic Strategies

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