Austerity is recreating Disraeli’s 'two nations'

New research shows the cuts are biting deepest in the poorest areas in the north and Scotland, with worse to come.

The cuts continue unabated. As we approach the fourth austerity settlement for local government next month, a new interim report for JRF, from a team at Glasgow and Heriot Watt Universities, analyses the pattern of public spending cuts for England in 2013/14 and offers the first analysis of budget cuts in Scotland. At the same time, a new Audit Commission report confirms that councils serving the most deprived areas have seen the largest reductions in funding relative to spending since 2010/11. In December, another report from LSE will look at the impact of the cuts in London boroughs.

The cuts are biting deep (spending in England is set to fall by nearly 30% from 2008-2015 and by 24% in Scotland). Cuts in spending power are systematically greater in more deprived local authorities than in more affluent ones, with a difference of about £100 per head in both England and Scotland. The north-south divide in England is £69 per head. A major reason for these discrepancies is the scrapping of many specific grants which predominantly went to the more deprived authorities. As a consequence, the worst effects of austerity are being felt by those councils which are home to the largest concentrations of poorer people.

Sadly, the bad news does not end there. This most recent study shows that, to date, local authorities of all kinds had largely been successful in directing cuts towards 'efficiencies' - that is, cutting back-room jobs and other savings, in order to make the LA machine leaner and meaner. But that changed in in 2013/14 when more and more cuts were carried out by 'retrenchment' - namely reductions of various kinds on front-line services themselves. What’s more, this trend is set to intensify further in 2014/15. In the three case-study authorities covered in the report, services already affected in these ways include: services for children and young people, arts and culture activities, libraries, leisure centres, street warden and street cleaning services, and children's centres.

The case study local authorities are trying hard to protect the most vulnerable populations from the impacts of these cuts, and there is evidence that 'pro-rich' services (such as adult education or museums and galleries) have been subjected to severer cuts than 'pro-poor' services (like children’s social care, Citizens Advice and services for homeless people). Despite these efforts, the researchers conclude that the cumulative effect of all the cuts will still fall hardest on the poor, who lack the funds to buy replacement services.

Is there any good news? The study does highlight the considerable ingenuity used by the case-study authorities to find creative ways of managing the budget gaps they face. But in the meantime, austerity is hitting deprived communities hardest. The way that this is deepening the north-south divide is also clear. Unless we can somehow muster the national will to correct or mitigate these unacceptable divergences, we will continue to reinforce fatal divisions in our society. A society in many ways as divided as that portrayed, so many years ago, in Sybil, or The Two Nations. Disraeli must be turning in his grave.

John Low is a policy and research manager at the Joseph Rowntree Foundation

Local authority cuts in the north have been £69 per head deeper in the north than in the south. Photograph: Getty Images.

John Low is a policy and research manager at the Joseph Rowntree Foundation

Photo: Getty
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The big problem for the NHS? Local government cuts

Even a U-Turn on planned cuts to the service itself will still leave the NHS under heavy pressure. 

38Degrees has uncovered a series of grisly plans for the NHS over the coming years. Among the highlights: severe cuts to frontline services at the Midland Metropolitan Hospital, including but limited to the closure of its Accident and Emergency department. Elsewhere, one of three hospitals in Leicester, Leicestershire and Rutland are to be shuttered, while there will be cuts to acute services in Suffolk and North East Essex.

These cuts come despite an additional £8bn annual cash injection into the NHS, characterised as the bare minimum needed by Simon Stevens, the head of NHS England.

The cuts are outlined in draft sustainability and transformation plans (STP) that will be approved in October before kicking off a period of wider consultation.

The problem for the NHS is twofold: although its funding remains ringfenced, healthcare inflation means that in reality, the health service requires above-inflation increases to stand still. But the second, bigger problem aren’t cuts to the NHS but to the rest of government spending, particularly local government cuts.

That has seen more pressure on hospital beds as outpatients who require further non-emergency care have nowhere to go, increasing lifestyle problems as cash-strapped councils either close or increase prices at subsidised local authority gyms, build on green space to make the best out of Britain’s booming property market, and cut other corners to manage the growing backlog of devolved cuts.

All of which means even a bigger supply of cash for the NHS than the £8bn promised at the last election – even the bonanza pledged by Vote Leave in the referendum, in fact – will still find itself disappearing down the cracks left by cuts elsewhere. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.