Study finds biggest cuts to care for families, children and the homeless are in the most economically deprived areas

Nearly all the austerity-era funding cuts to services supporting poor families have fallen in the most economically-deprived areas of England, potentially trapping them in a “downward spiral” of poverty, according to new research.

Council areas in the north and Midlands, together with a handful of local authorities in London, have shouldered 97% of the reductions in town hall spending on working age social care, looked-after children and homelessness since 2011, the study says.

Despite rising poverty, spending on disadvantaged families in the poorest 20% of English councils – mainly Labour-controlled - reduced by £278m in 2016-17 after successive years of cuts to central government grants.

By contrast the wealthiest 20% of areas, predominantly Tory-controlled and in the south-east, which were less affected by cuts to deprivation grant funding, were spending £55m more on services for poorer families by 2016-17.

“To the extent that there have been cuts in spending on disadvantage, they have happened almost exclusively in the most deprived areas of England,” the study, funded by the Lloyds Bank Foundation charity, concludes.

The foundation said it commissioned the study after several small charities it funds in the north of England reported that they were expected to deliver family and social care support services that their cash-strapped local councils had abandoned because they could no longer afford to fund them.

It warns that planned changes to the distribution of local government funding, which will see a deprivation-based funding model replaced by reliance on local council tax and business rates, will serve to lock in funding cuts in poorer areas unless a safety net is built in.

“Without a change of policy and direction, primarily by central government, some authorities may be trapped in a downward spiral when it comes to spend on disadvantage… The real risk is that the areas and people that face disadvantage are left further behind,” the study adds.

Around £17bn was spent by councils on services for disadvantaged families in 2016-17, amounting to 26% of the £64bn spent on all local authority services in England in that year, the latest for which official data is available.

A striking finding is the extent to which rising homelessness has impacted London councils, which increased spending on housing support by 20% between 2011 and 2016. Other regions cut this budget by up to 59% over the same period. Housing support in the capital has come at the expense of social care, the study says.

Although the most deprived councils tried to maintain spending on adult social care (a 2% cut between 2011 and 2016) and on children’s social care (spending up 5% over the period) this is unlikely to have kept pace with demand as numbers of adults with learning disabilities and looked-after children soared, the study suggests.

Protecting social care in deprived areas came at the expense of youth justice, family support, homelessness, and substance misuse services, which each saw double-digit cuts, demonstrating a big shift in focus away from prevention towards expensive crisis services.

Paul Streets, chief executive of the Lloyds Bank Foundation, said: “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.”

A spokesperson for the Ministry of Housing, Communities and Local Government said: “Local authorities are responsible for their own funding decisions and we have made £200bn available to councils up to 2020 for local services including those for children and young people.

“We are giving them the power to retain the growth in business rates income and are working with local government to develop a funding system for the future based on the needs of different areas.”

The Local Government Association (LGA) said the research reflected the pressures faced by councils, which were relied on by some of society’s most vulnerable people. It estimates that without an injection of cash there will be an £8bn funding gap in council budgets by 2025.

Lord Porter, chairman of the LGA, said: “Pressures are growing in children’s services, adult social care and efforts to tackle homelessness. This is leaving increasingly less money for councils to fund other services, like fixing potholes, cleaning streets and running leisure centres and libraries.”