Neighbourhood services are critical to residents and businesses alike. Delivered by local councils, these frontline public services, such as parks and public realm, recycling, bin collections, roads and highways are vital to wellbeing of local areas and local people. But when it comes to public funding, they are at the back of the queue.
A new report published by APSE and written by the New Policy Institute finds that over the nine years from 2009/10 resources devoted to neighbourhood services across Britain fell 27 per cent representing a total of £8.9bn in 2017/18 prices. This is against the background of a real fall in total UK local government spending over the same period of 19 per cent demonstrating that neighbourhood services have taken a bigger share of austerity than other council services. Given the importance of these services to local communities and local businesses the report builds an argument for a sustained increase in local government spending on neighbourhood services, supported by an analysis of how increases might be distributed across the 70 or so individual services.
Lead report author, Dr Peter Kenway said “From an economic point of view, the parlous state of local government finance reflects the fact that its spending as a share of GDP is at its lowest level for 50 years. It dropped below the old record (6.2 per cent) in 2016/17 and is still heading on down.”
Paul O’Brien APSE’s chief executive added, “It is now clear that reductions in local government spending has gone too far. In spite of well-intentioned announcements by the Chancellor to allow public spending to grow in real terms at 1.2 per cent a year from 2020/21 this is not enough to prevent the share of local government spending in the whole economy from continuing to slide.
The report, combines quantitative and qualitative evidence to highlight that reductions in local government spending have gone too far, and in particular finds that the impact of spending cuts has hit the poorest areas hardest. When compared on a per head basis, spending on neighbourhood services by the one third of authorities with the lowest spending in 2017/18 has fallen further since 2009/10 than spending by authorities with higher levels.
Paul O’Brien added, “To address these deepening concerns local government spending must, as a matter of urgency, be restored to a minimum sustainable level after which its growth must be linked to the growth rate of the economy. Only when that has happened will austerity for local government truly be over”.
The report finds that restoring local government spending as a share of GDP, even to the old low point of 6.2%, would still provide a welcome step-up in local government spending on neighbourhood services in England, Wales and Scotland of some £3.2bn. On average, this would represent a 12 per cent increase in neighbourhood services budgets.
With Government business at an impasse, resulting in the delay of the Comprehensive Spending Review, there is a pressing need for action on the funding of neighbourhood services as part of a wider settlement for local government as a whole.
Notes to Editors
APSE is a not for profit local government body working with over 300 UK wide local councils
The New Policy Institute (NPI) is a UK research institute which produces evidence-based research on a range of social and economic issues.
Lead author of the report was Dr Peter Kenway, NPI Director.
Co-author of the report was Josh Holden, NPI Lead Researcher.