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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.

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

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