Citizen Network Research has published a major report entitled: Centralisation Meets Austerity: Local Spending in England during the first phase of austerity 2009-2019.
The report has been produced by Josh Shepherd and Dave Goswell and it tracks, where possible, public expenditure down to the level of a local authority area. It includes data on pensions, benefits, local authority services, the NHS and schools.
The combination of all these different forms of expenditure produces Local Spending; and this definition of Local Spending is an important innovation that offers a vital lens to examine the welfare state and policy objectives, such as Levelling Up.
The authors have also produced an online map which reveals detailed changes in each local area in England:
Some of the report’s main findings include:
- 55% of UK public expenditure cannot be tracked to a local authority level. This transparency deficit is a function of our democratic deficit. There is no constitution, no regional democratic autonomy and no truly local or neighbourhood democracy.
- Measured as a percentage of GDP, and excluding the triple-locked state pension, Local Spending has been cut by 23%.
- Austerity has targeted cuts on local community services, including social care and benefits that support disabled people and people on low incomes and the NHS.
- England has the most centralised welfare state in the world. More than 90% of all public spending is controlled by central government. About 80% of Local Spending is also controlled by central government, not local government.
- Policies of hyper-centralisation and austerity seem to go hand-in-hand. Local government is too weak to protect itself from cuts, just as people on low incomes and disabled people are too weak to protect themselves from similar attacks. Austerity has targeted the weakest people and the weakest institutions.
- There are significant variations in Local Spending and in the impact of austerity, with a few places even seeing growth in spending; but the general pattern shows that the deepest cuts have been in the poorest places.
- Local government is now far more reliant on its local tax base to support community services and, given the extreme inequalities in the English economy, this will further increase local disparities in the quality of public services and economic development. e.g. There are now huge disparities in disposable income; the North East (£16,995), North West (£18,362), Yorkshire and Humber (£17,655) all have lower average disposable incomes than London (£29,362) and the South East (£24,318).
- NHS spending has not only been reduced but the NHS has also become more remote and centralised, with local accountability for spending diminishing even further.
- Local Spending in the North West and North East seems to be higher than the South East and East Midlands; however this excludes 55% of all public expenditure and much of this extra money seems to be targeted towards London and the South East. e.g. Transport spend in the Yorkshire and Humber (£276) and East Midlands (£268) spend is less than a third of spending in London (HM Treasury 2019b).
- The increasing use of complex funding formulas to define public expenditure does not seem to be leading to the effective targeting of resources in areas with higher needs; instead it seems to allow for centralised political manipulation.
- There are many wealthy areas, with low levels of need, that seem to have much higher levels of Local Spending than areas with much greater need.
The report casts severe doubt on the coherence of the Levelling Up agenda. Without proper data and genuine local accountability there is no prospect that grants, provided by central government, can fix the underlying imbalances of power.
Dr Simon Duffy, Director of Citizen Network Research commented:
“It has taken a lot of hard work to show the relationships between public expenditure, local areas, deprivation and austerity. It is clear that the current system is not designed to make things clear. But as we uncover these relationships it is also obvious that the claim that the government is committed to Levelling Up is false. Tackling the deep systemic injustices in the governance and economy of England must start with a redistribution of power. It is only when communities are able to make decisions for themselves and to hold the whole system to account that meaningful change can take place. Levelling Up is another centralised initiative; it will fail in the same way as all the similar phoney initiatives that have preceded it have failed. It is time for a radical revisioning of the UK state and a clear commitment to transparency, meaningful systems of redistribution and deeper democracy.”