Council cuts due to austerity ‘twice as deep’ in England as rest of Britain, study English local authorities have slashed services on average by 24 per cent – compared to 12 per cent in Wales and 11.5 per cent in Scotland

Cuts to council services caused by austerity have been twice as deep in England as the rest of Britain and have compounded deprivation in the poorest areas, an authoritative study has found.

The average reduction in local authority spending imposed by Government cuts in the wake of the financial crash has reached almost 24 per cent in England since 2010 – compared to 12 per cent in Wales and 11.5 per cent in Scotland.

Alternative funding

Researchers at Cambridge University found that of the 46 councils which cut spending by more than 30 per cent over the last eight years all were in England.

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Although these councils included some wealthy boroughs such as Westminster and Kensington & Chelsea in London, the majority were poorer local authorities reliant on a central government grant with little ability to seek alternative funding by selling assets or retaining business taxes.

The study, which is the first to offer a direct comparison of spending cuts across local government in Great Britain, found that the services to suffer the deepest cuts were adult social care, young people’s services and environmental services. The most swingeing reductions were found in the north of England and some London boroughs.

‘Equal austerity is nonsense’

Dr Mia Gray, an economic geography specialist who co-authored the study, said: “The idea that austerity has hit all areas equally is nonsense. Local councils rely to varying degrees on central government and we have found a clear relationship between grant dependence and cuts in service spending.

“The councils in greatest need have the weakest local economies. Many areas with populations that are ageing or struggling to find employment have very little in the way of a public safety net.”

Councils in Scotland and Wales were protected from having to make the deepest cuts because devolution has given the administrations in Edinburgh and Cardiff the ability to act as a buffer by diverting some of the financial burden to other budgets, the study found.

Funding shortfall

By contrast, English councils were found to have no such protection and therefore have had to resort to alternative sources of income, such as selling surplus buildings or retaining local business tax revenue. Those without such resources have had to simply reduce services.

It is estimated that councils will face a funding shortfall of £5.8bn by 2020.

The parlous nature of the finances of some local authorities was highlighted this summer when the Government was forced to send in administrators to Conservative-controlled Northamptonshire Council, which has reduced services to the mandatory minimum.

‘Middle England’ cuts smaller

Among the ten worst affected English councils were Salford, South Tyneside, Wigan, Oldham, Gateshead and Camden in north London. Salford had the second highest level of spending reduction at 45 per cent, while the highest cut in Scotland was 29 per cent (Glasgow) and the highest in Wales in was 23 per cent (Denbighshire).

The study, published in the Cambridge Journal of Regions, Economy and Society and based on data gathered by thinktank the Institute for Fiscal Studies, found that a large swathe of “Middle England” where local authorities were less reliant on central government had seen smaller cuts. There was no comparable information for Northern Ireland.

The report’s authors said the findings highlighted the risk of austerity fuelling disparities between regions because measures such as the local retention of business taxes could result in a “race to the bottom” as councils compete to attract employers.

Future funding

Dr Gray said: “We are now seeing austerity policies turn into a downward spiral of disinvestment in certain people and places. Local councils in some communities are shrunk to the most basic of services. This could affect the life chances of entire generations born in the wrong part of the country.”

The Government said its funding of councils reflected the relative needs of different areas. A spokesperson for the Department for Housing, Communities and Local Government said: “We have made £200 billion available to councils up to 2020 for services, and are working closely with them to develop a funding system for the future based on the needs of different areas.”