​Austerity will devastate Britain’s most deprived councils, experts suggest

Reuters / Jon Nazca
The UK’s most deprived regions have been worst affected by drastic cuts to council budgets and will likely suffer disproportionately again when the next phase of budget savings are announced, a leading think tank says.

The report, conducted by the Institute for Fiscal Studies (IFS), examines how councils’ spending has fluctuated across England since the coalition came to power. It also reveals how these cuts have impacted upon local authority services such as social care, transport, housing and environmental services.

Reflecting on the IFS' findings, UK economist Michael Burke said the government's austerity measures have "failed spectacularly," yielding a damaged economy, slowed growth, higher levels of poverty and a stubbornly high deficit.

He said the government's decision to target deprived councils with severe spending cuts is in line with the logic of austerity, which functions to transfer "income from poor to rich."

The IFS' research found that local authorities’ spending per head plummeted by 23.4 percent between 2009/10 and 2014/15.

Under the coalition’s austerity program, the vast majority of government departments were hit with drastic spending cuts. However, the protected sectors of health, education and international development were an exception to this trend.

Although council budgets have been dramatically reduced since 2010, cuts to local authorities were not distributed evenly across the UK, the IFS report suggests.

The think tank’s research reveals that London boroughs, the northwest and the northeast have been burdened with the most crippling cuts to spending per head across the state.

The think tank predicts additional cuts scheduled for 2015/16 will largely focus on the very areas that have been hardest hit since 2010. Its report reveals London boroughs will be confronted with cuts of 6.3 percent over the next 12 months, while shire counties face cuts of a more moderate 1.9 percent.

The IFS says further cuts implemented in the next parliament will likely target the same areas again unless a dramatic policy shift occurs.

David Innes, a research economist and co-author of the report, acknowledges local authorities across the nation have been exposed to government cuts since 2010. But he stresses the most deprived councils characterized by the most rapid population growth have been blighted by the most extensive cuts on a per-head basis.

UK economist and anti-austerity campaigner Michael Burke warned these cuts are simply "unsustainable" and are prompting financial crisis in many locales. He said the government's response to this financial turmoil is to "take over local authorities."

Burke stressed Britain is already heavily centralised. He argues further centralisation is undemocratic.

The government response is to take over local authorities. Britain is already one of the most centralised industrial countries. The current policy of addressing economic crisis they created is even less democracy."

At present, Britons are midway through a nine-year austerity plan spearheaded by Chancellor George Osborne, with non-protected government departments lined up to face even deeper cuts if the Conservative Party returns to power in May 2015.

Conservative MP for Keighly in West Yorkshire, Kris Hopkins, says the government has issued a “fair settlement” to each part of the nation.

He told the Financial Times councils have “continued to balance their budgets,” and maintain “public satisfaction” under the government’s austerity agenda.

David Sparks, the chair of Britain’s Local Government Association, rejects this position.

He told the Financial Times many basic council services such as road maintenance and libraries are in a “fragile financial position.”

He warned while councils have tried to soften the impact of the cuts, they will not continue to stand up to continued austerity of the magnitude seen since 2010.

Sparks said it is vital for the next government to address the manner in which local authorities are funded.

Rob Whiteman, chief executive of the Chartered Institute of Public Finance and Accountancy, said the IFS findings back its demand for reform.

Whiteman stressed an independent body should be set up to allocate council spending in a “fair, evidence-based and transparent way.”