Monday, January 28, 2019

Austerity and the Cities

Austerity cuts have fallen hardest on deprived communities in the north of England, which are enduring the highest poverty rates and weakest economies, according to a Centre for Cities think-tank study. 
It shows that the poorest areas have borne the brunt of council spending cuts. Local authority spending has fallen nationally by half since 2010, with areas such as Liverpool, Blackburn and Barnsley facing average cuts twice that of their counterparts in the more affluent south, according to the think-tank. The report suggests there is a “city and country” divide, with urban council areas having shouldered cuts to services such as street cleaning, road repairs and libraries, which, are, on average, twice as deep as those borne by more rural authorities.
Councils’ traditional role as “custodians of places” is under threat as a result of the cuts, according to the thinktank. Some councils are at risk of becoming “little more than social care providers”, as they reduce non-care services to the bare legal minimum to pay for rocketing demand for services for vulnerable adults and children. Nearly half of cities spend at least half of their overall budget on social care alone, up from 38% of budget in 2010. The biggest increases in social care spending have been in deprived cities outside the south-east of England. In Barnsley, 62% of the entire council budget went on social care in 2017-18.
The report states: “Despite the high-profile coverage of the struggles of county councils in recent years (most notably Northamptonshire), it is actually cities, and especially those in the north of England, that have been hit hardest by austerity.” British cities, which are home to 55% of the population, have borne 74% of the total cuts to local government spending since 2009-10. In per-head terms, this equates to a cut of £386 in urban areas, compared to a £172 reduction in the rest of Britain. Deprived northern urban areas have been traditionally more reliant on government grants than more affluent councils because their relative poverty means they are less able raise cash though local taxation to pay for higher social needs. Ministers have targeted cuts on central grants, disproportionately hitting poorer councils.
The five cities and towns that have suffered the biggest falls in spending over the past eight years are from the north of England: Barnsley (-40%), Liverpool (-32%), Doncaster (-31%), Wakefield (-30%) and Blackburn (-27%). The British average is -14.3%. Liverpool residents have borne the largest spending cuts per head on local services of £816 over the period. The city has lost £441m in annual spending. Barnsley has had £145m cut from its annual budget, which is equivalent to £688 a year per head. London has seen the biggest absolute cuts, with £3.9bn stripped from spending on services by its 32 boroughs since 2009-10. The Centre for Cities says the capital has shouldered 30% of all local government cuts in Britain, despite having just 16% of the population.
Increasingly, councils are turning to commercial investments to patch up holes in their budgets, the report says. Billions have been borrowed to invest in office blocks, shopping centres and even airports and shipping companies. Although this raised £1.2bn last year for English local authorities, it covered just 5% of the income lost to cuts. Councils are also balancing the books by charging residents for services such as parking, recycling and social care. York city council has increased its income from charges more than any other city over the past eight years, the report says. A quarter of all spending comes from this source.
The Liverpool mayor, Joe Anderson said. “The government is turning a blind eye to the reality of what is happening to local authorities, in particular, the poorest.” The city would be £80m a year better off if it had endured cuts at the national average.

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