We need a new conversation about austerity

Adrian Nolan

adrian nolan webAusterity is here to stay. Last year’s autumn statement showed that we are now only halfway through a nine year programme of austerity, when we should be three quarters of the way through a six year programme.

About 60% of the proposed cuts are planned to be delivered in the next parliament. This is bad news for jobs and services across the public sector, but in particular, it is sparking a crisis in local government and its ability to deliver quality services.

The impact of austerity on local government is the focus of a new report by CLES for the TUC. ‘Austerity Uncovered’ looks at the impact of austerity on people and communities. It shows that the scale and depth of cuts are harming both our present and our future, and negating the ability of local government to ensure the wellbeing of some of the most vulnerable people in society.

Local government increasingly stretched

It is a time of great uncertainty for local government. Many local authorities are pessimistic about their ability to deliver anything apart from the most basic statutory services in future. Initiatives such as sharing back-office costs and other efficiency savings – something that the government appears endlessly keen to promote – are increasingly unlikely to fill the funding gap (estimated by the LGA to be over £12bn by 2020).

Many of the most disadvantaged places are being hit hardest through the ‘double whammy’ of cuts to both local government funding and to welfare payments. The government claims to be fair to councils across all parts of the country, but the evidence suggests otherwise.

Importantly we aren’t claiming that there is a simplistic north-south divide pattern here. It’s true there are disparities between regions but austerity is impacting on local government and places everywhere; it knows no compass points and is leading to an alarming patchwork of inequality across the country that, once embedded, will be difficult to shift.

A crisis of care

Core areas of service delivery, including adult social care and children’s services, will increasingly soak up more resources. But even so, with exponentially rising demand and real terms cuts to budgets, these service areas will be challenged like never before.

The largest area of spending for local authorities, adult social care, is approaching a defining moment. Spending is falling within the sector, with a funding gap of £1.9bn expected by 2015/16, which, together with increasing demand through an ageing population and people with multiple disabilities living longer, is leading to a crisis of care within our society.

A real terms cut of 12% since 2010 combined with increasing demand of 14% over the same period, is a ‘perfect storm’ for the service. Increasingly, people are falling through the gaps with fewer people in receipt of publicly funded care; cutbacks in residential and day care centres, rising care thresholds and charging means many people will not get the service they need. Poor health outcomes and increasing isolation are likely to become more frequent, and this should not be the case in one of Europe’s most prosperous countries.

Children’s services is another other core service area that is being impacted. Increasing demand for child social care means councils will be cutting back further on other services, such as children’s centres (cut nationally by 28% between 2010 and 2013) child mental health and youth services. As well as the specific impacts on children and families, the importance of many of these services are critical for local communities and social capital, which is now being eroded away at a worrying rate.

There needs to be a step change

The government will tell us that local government has managed the cuts well and has been innovative in its solutions. This is true and reflects well on practitioners up and down the country, but there is a limit to how far ‘innovation’ can paper over the cracks, and the pressures will become too much. The lack of appreciation or understanding of the impact of the cuts shows that central government is increasingly out of touch with the pressures faced by local councils.

There needs to be a step change, which the report discusses: a needs-based approach to funding settlements that takes into account places with higher levels of social and economic deprivation; further devolution of resources and decision-making powers at the local level with resources specifically earmarked to address inequalities; a long-term plan for increasing funding for adult social care; a high-level commitment to improve child wellbeing and reducing inequalities; more intelligent commissioning of services that promote the living wage and reduce the use of zero-hours contracts; and more collaboration with public service unions and community groups to encourage local strategies and solutions.

We need to get the priorities right and appreciate that austerity means people’s needs are no longer being met as they should be. Without considered decisions based on the needs of people and places, now and into the future, we risk causing irreversible damage.

To read the full report click here.

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Adrian Nolan

Adrian Nolan

Adrian Nolan is associate director at CLES.

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