The regions need funding to really ensure austerity ends

22 Oct 18

Devolution offers a solution to mitigate local government’s powers being stripped back to ‘core offers’ focused on social care but it needs funding to do so, says IPPR North’s Anna Round.


Theresa May’s declaration at the Conservative Party Conference surprised a lot of people (especially, perhaps, if they’d been listening to the chancellor).

The prime minister assured her listeners that “a decade after the financial crash, people need to know that the austerity it led to is over and that their hard work has paid off”.

In the public services at the sharp end of austerity, though, few workers will feel inclined to take it easy just yet.

It depends, of course, on how you define austerity, and that’s by no means straightforward.

In technical terms, yes – Theresa May can point to public sector borrowing at its lowest since 2006-7 and a ‘current’ budget that’s in surplus for the first time since 2001-2.

But people don’t experience the economy in technical terms.

Analysis by the Institute for Fiscal Studies identifies planned cuts of £4bn in ‘day to day’ spending by departments other than health, aid and defence – plus further reductions in welfare budgets.

Headteachers, police chiefs and further education leaders (among others) warn that short-term savings may bring long-term problems.

For families and public services, all this will feel a lot like austerity – especially in the North, where the cuts have bitten deepest.  

And local government would be forgiven for greeting the announcement with hollow laughter.

“The current trajectory for local government is towards a narrow core offer increasingly centred on social care”.

The National Audit Office

The main government grant funding for local services will fall by £1.3bn in 2019-20.

That follows a real-terms reduction of almost half over the previous seven years, alongside an all-too-real increase in demand for the services that local government provides.

Even statutory services, such as social care for children and adults, have suffered, as well as the vast range of work that councils do to boost local economies and build vibrant, cohesive neighbourhoods.

Substantial innovation, entrepreneurship and sheer determination – plus in some cases dipping into their reserves – mean that many local authorities have managed to stave off the worst impacts.

Trust and satisfaction among residents remains surprisingly high.

But these are short-term solutions, and continuing cuts will start to damage community and democratic engagement, as well as individual lives.

A theoretical understanding of austerity doesn’t mean much if your street’s full of potholes, the pavements aren’t clean, or you’re constantly worried about your elderly neighbour.

And it’s hard to believe that lifelong learning and good public health are valued, if the library and the leisure centre close.

Countless communities have come together to make sure amenities aren’t lost. But organising and delivering services takes time and resources, whoever does it.

Low wages, demanding jobs, insecure work and caring responsibilities all cut into volunteers’ capacity to fill the gaps.

Yet at the same time as austerity constrained opportunities for local government to shape services, successive waves of devolution passed powers for economic development to newly-formed combined authorities.

Where devolution deals have been signed, it’s increasingly clear that the ambition and vision for local control is considerable and the relatively modest budgets available are being deployed strategically.

The capacity built up under earlier city and growth deals provides strong foundation. Innovation and partnership working are moving apace, as the ‘power glass ceiling’ starts to crack.

Continued austerity, however, could damage the opportunity of devolution.

In 2015, the National Audit Office warned that “the current trajectory for local government is towards a narrow core offer increasingly centred on social care”. 

Local government risks a drastic reduction in its remit, with decisions constrained by ever-tightening budgets.

Would a German Länd, a Swedish municipality or a Canadian province be expected to set its horizons so low?

Devolution offers a different path.

As it matures, develops, and beds in to our political and wider cultures, it can give citizens a real voice in their economic future.

But local leaders could lose control of other key powers – if they don’t have the funding to support the right choices for their area, and over the long-term.

It makes little sense to silo off powers for economic development from the ones that shape communities, places, skillsets, and daily lives.

These are the intensely local roots, in people and places, of productivity and GVA.

Devolution Deals increasingly encompass social policies (including education, health and community) and to recognise that growth must be inclusive.

Now, local leaders need both the mandate and the money to meet the needs – and realise the potential – of the places they serve.

That would be a fitting farewell to austerity.  

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