Councils forced to cut homelessness services as cash crisis bites

Cash-strapped councils are being forced to cut spending on key services to meet rising costs and demands, according to a new study.

The study A Quiet Crisis: Local Government Spending on Disadvantage, by the New Policy Institute (NPI) for Lloyds Bank Foundation for England and Wales warn scouncils have been forced to drastically cut funding on preventive services, particularly on homeless, which will create higher costs for local authorities further down the line.

In particularly, the report found that preventive funding to help people stay in their homes has fallen 46% since 2011/12, while the costs of temporary accommodation for those who have become homeless, has risen by 58%.

Similarly, to meet the costs of rising numbers of children going into care, councils are having to cut spending on the very services which could keep children out of care in the first place.

Without such preventive services councils, the report warns and charities and other public services are facing even greater demands for crisis support in the years ahead.

Councils across the country have had to make large cuts in their spending since 2010, primarily because of significant reductions in the funding they receive from central government through the revenue support grant.

Despite these pressures, AQuiet Crisis shows councils have tried to manage and prioritise spending on services for disadvantaged groups so that it has fallen overall by 2% since 2011/12 relative to 8% for local government spending overall.

During the same period local authorities have faced significant increases in the number of people needing their help, with a 60% increase in the numbers requiring temporary accommodation due to homelessness, an 11% increase in the number of children being taken into the care system and a 4% increase in the number of people with a learning disability requiring assistance.

To help meet these demands other areas have been hit particularly hard with spending on substance misuse cut by 59% and on youth justice by 14% over the three years to 2016/17.

‘Local government finances are increasingly hitting the headlines,’ said Lloyds Bank Foundation chief executive, Paul Streets.

‘But behind the particular troubles of Northamptonshire, Sussex or Somerset this research uncovers the quiet crisis that even well-run local authorities are facing up and down the country in trying to fund services for disadvantaged adults and children, a crisis for which the worst may be yet to come.

‘Councils have been trying to do more with less for some years, but the tipping point is increasingly close with deprived areas hit hardest,’ added Mr Streets.

‘It cannot be right that the services you get if you are homeless or have a learning difficulty are dependent on the post-code lottery of the ability of your council to raise local taxes. And it’s a false economy that in trying to cope councils are forced to cut the very preventive services that can help people before they get into trouble in the first place. Local charities are doing their best to help councils pick up the pieces but as a country,we can and must do better than this. The Government needs urgently to look again at how it funds local councils to enable them to provide and fund services for those who need it the most, regardless of where they live.’

The full report can be read here.

Jamie Hailstone
Senior reporter - NewStart


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