From the TUC

Saving Our Safety Net Fact of the Week: councils’ housing services cut by a third

28 Nov 2014, by in Society & Welfare

Last week’s National Audit Office report on The Impact of Funding Reductions on Local Authorities is a depressing read. Vital services including housing and adult social care have been badly cut, but local authorities have tried to shelter the most vulnerable people from the full scale of the cuts, especially children’s care services. Shire and unitary councils have cut spending on housing services by 34 per cent, district councils by 17 per cent. The shires have cut spending on adult care by 9 per cent, but increased spending on child social care by 7 per cent.

Councils’ services – especially housing and social care – are as much a part of our safety net as the benefits system, but the indirect way in which these cuts have been imposed have stopped them hitting the headlines. The background to this story is the massive cut in central government funding for local authorities. Between 2010-11 and 2014-15, this fell by 27.9 per cent; the provisional estimate for the cut to 2015-16 is 37.3 per cent. The political character of these cuts is underlined by the fact that the blow has not been equal for all local authorities:

  • Metropolitan authorities have faced a cut of 40.8 per cent;
  • London, unitary and district authorities have faced a 38 per cent cut in support;
  • For the shire councils the cut has been significantly lower, though still hard to manage – 32.8 per cent.

Local authorities get their funding from two sources, central government support and Council Tax. This means that the cut to total their income is smaller than the figures above – but the NAO estimates that the cut in their total income between 2010-11 and 2015-16 is 25 per cent, still extraordinarily difficult to cope with.

I’ve mentioned the way councils have actually increased child social care services and other services for vulnerable people have not been hit as hard as the cuts overall – adult social care has accounted for 28 per cent of the total cuts so far, even though it takes up 41 per cent of councils’ spending. Other services, like planning and highways, took a higher share of the cuts.

But the room for targeting cuts at these other services is running out and more recent cuts are falling more heavily on the most vulnerable. Cuts in adult social care only accounted for 15 per cent of total cuts in 201-11 but 40 per cent in 2014-15; cuts in housing services accounted for 15 per cent of all cuts in 2010-11, 22 per cent in 2014-15.

Even though most local authorities have managed to increase funding for child social care, in the local authorities that have had to make the most cuts spending has fallen 4.3 per cent. And the protection of social care is less impressive when we take into account the fact that the Supporting People programme (which enables elderly and vulnerable younger people to avoid residential care by helping them to stay in their own homes) has been the main target for cuts in housing services: “during this period, spending on this area will fall by a median of 45.3%, across single tier and county councils.”

In concrete terms, these cuts often mean staff redundancies. Frustratingly, the report doesn’t have figures up to the current year, but it does report that “the number of full‑time equivalent posts, excluding the total school workforce, fell by 16.6% between 2010 and 2013.”

The way local authorities have started cutting the services they initially tries to protect suggests just how fragile their position has become. The most worrying section of the NAO’s report is a final chapter, on “the financial sustainability of local authorities”. Using information from local auditors, they report that 16 per cent of unitary and shire councils found it difficult to deliver their 2013-14 budgets. In that year, 26 per cent of unitary and shire councils had unplanned reductions in the amount they spent on services and 15 per cent had unplanned staffing changes.

Things are going to get even worse. The NAO notes that we only have figures for local authority funding to 2015-16, but that

HM Treasury forecasts that government resource budgets (less depreciation) will fall by £10.9 billion (3.8%) from 2015-16 to 2016-17, and by a further £11.4 billion (4.1%) by 2017-18. If the government maintains protections for education and health funding, local authorities need to make savings well above these rates.

 At the same time that government support has been cut, so austerity and cuts in benefits and other services have meant that demand for local authority services – especially social care – is going up. The NAO reports that local auditors are worried that rising demand for councils’ services is making them concerned about the “medium term sustainability” of these authorities.

It’s hard not to agree with Flip Chart Rick’s warning that:

when it comes to savings, most of the low hanging fruit in local government has been picked. Another £48 billion of cuts in the next parliament could finish some council services off.