Today the Institute for Fiscal Studies issued another report. This time it was on the decline of local government spending, its inequality and its link to LibDem/Tory Coalition cuts – hitting already deprived areas especially hard.
Telegraph headlines responded – emphasizing immigration as the problem. But population growth [not simply immigration] was only a small part of the IFS analysis.
And the Tories response? They unveiled another flagship policy – to give 10 minutes grace on parking fines. Another part of Mr Pickles war on wicked [Labour?] Local Authority profiteers, raking in fines from the motorist.
Unfortunately that same IFS report shot his goose. Revenues from parking fines have actually declined!
First the IFS report. These are its key points.
‘The spending power of local authorities in England has been cut substantially during this parliament.
-local authorities’ spending per person has been cut by 23.4% in real terms between 2009–10 and 2014–15, using a comparable definition of net spending on services over time.
The size of cuts varied markedly across the country
– On the whole, more deprived areas and those that saw faster population growth have seen larger cuts.
Further cuts planned for 2015–16 will generally be focused on the same local authorities that have lost over the last five years. – For example, London boroughs face cuts of 6.3% on average next year compared with 1.9% cuts faced by shire counties.
Without a change in policy, any further cuts over the next parliament are also likely to affect the same places again.
Cuts to local authority spending have been large. They were driven by large cuts to local authority revenues, particularly grants from central government.
– Taking into account population growth, spending per person has been cut by 23.4%.
Grants from central government (excluding those specifically for education, public health, police and fire services) have been cut by 36.3% overall (and by 38.7% per person) in real terms.
Taking grants and council tax revenues together, local authorities’ total revenues have fallen by 19.9% overall (or 22.9% per person) in real terms. But the overall cut to spending was actually slightly larger than this because, on average, local authorities have added to their reserves over this period.
Cuts to net service spending have tended to be larger in those areas that were initially more reliant on central government grants to fund spending (as opposed to locally-raised revenues). These are areas that have, historically, been deemed to have a high level of spending need relative to their local revenue-raising capacity. The cuts to spending per person were also higher on average in areas that saw faster population growth.
London boroughs, the North East and the North West have seen the largest average cuts to spending per person.
– London boroughs cut spending per person on average by 31.4%, while spending per person was cut by 26.5% in the North East and 25.7% in the North West.
Local authorities have not cut all service areas equally. Despite it being the largest component, social care (including adult social care and children’s and families’ services) has seen one of the smallest cuts to date.
• Despite this relative protection, net spending per capita on social care was cut by 16.7% in real terms between 2009–10 and 2014–15.
• Some of the service areas that saw the largest cuts to net spending were planning and development (which was cut to less than half its original level), regulation and safety, housing, and transport (all of which were cut by at least 30%). There was variation across the country, however, in which services different local authorities chose to focus the cuts on.
There are likely to be further cuts to local government spending power beyond the election and there are a number of reasons to believe that these may be concentrated on many of the same authorities that have already seen the largest cuts.
– In particular, those areas with the lowest local revenue-raising power will continue to be the most exposed to cuts in central government funding, while those with higher population growth will find it harder to maintain levels of spending per person.
David Innes, a Research Economist at IFS and one of the authors of the report, commented:
“English councils – like many government departments in Whitehall – have experienced sharp cuts to their spending power over the last five years. But the size of the cuts has varied a lot across England. On the whole, it is more deprived areas, those with lower local revenue-raising capacity, and those that have seen the fastest population growth that have seen the largest cuts to spending per person. Further cuts are likely to come in the next parliament and they could well be focused on many of the same local authorities if the current mechanism for allocating funds is retained.”
So that’s the report.
Media response? Perhaps predictable Daily Telegraph headline
‘Immigration leads to 50 per cent cuts in council spending, IFS finds’
Well, read the above and see just how accurate an account of the report that was!
What the report was in fact confirming was something we’ve reported over and over again – the swingeing, unfair and unsustainable cuts to local government grants – here reflected in the unfair results for spending per person.
Hilary Benn MP, Labour’s Shadow Secretary of State for Communities and Local Government, responded differently to the IFS figures:
”These figures confirm the shocking way in which the most deprived areas have faced the biggest reductions in spending under David Cameron. The Tories said those with the broadest shoulders should bear the greatest burden but they have done the very opposite. Another Tory Government will continue to treat areas with the greatest needs unfairly.
”Labour will distribute funding to councils more fairly based on need and end the bias against the poorest communities, giving local authorities longer-term funding settlements so they can plan ahead to best protect the local services on which people rely.”
And what did Mr Pickles – the current Secretary of State for Communities and Local Government – have to say today?
Well this was the day he announced a ‘sensible ten minute grace period for parking’ in council parking places.
As readers will know, Mr Pickles is obsessed with parking – and obsessed with what he sees as local authorities profiteering on parking charges. It’s yet another part of his war on [especially Labour?] Local Authorities.
But there was news for Mr Pickles in the IFS report, had he bothered to read it.
Buried among the figures are some interesting statistics on local authority parking revenues [p 26]
– the increase in revenues from fines for on-street parking for Local authorites since 2009-10 amounts to precisely – NOTHING;
– off street parking revenues have actually declined – by 7.6%
Nice timing, Mr Pickles.
On the day the IFS reports on Local Authority cuts which affect the vulnerable in the most deprived areas, he’s pursuing his personal vendetta against local councils.
Which is greater – Mr Pickles’ idiocy, Mr Pickles’ disgraceful indifference, or Mr Pickles’ irrelevance?
Better services, greater fairness – or ten minutes extra parking time.
Looks as if the choices for May 7 are pretty clear.
To ensure a Labour Government – which has got its priorities right – vote for Alex Sobel on May 7 here in Leeds NW
And sign up now to help him win.