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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In the race to be France's next president, keep an eye on Arnaud Montebourg

Today's Morning Call. 

Good morning. As far as the Brexit talks are concerned, the least important voters are here in Britain. Whether UK plc gets a decent Brexit deal depends a lot more on who occupies the big jobs across Europe, and how stable they feel in doing so.

The far-right Freedom Party in Austria may have been repudiated at the presidential level but they still retain an interest in the legislative elections (due to be held by 2018). Both Lega Nord and Five Star in Italy will hope to emerge as the governing party at the next Italian election.

Some Conservative MPs are hoping for a clean sweep for the Eurosceptic right, the better to bring the whole EU down, while others believe that the more vulnerable the EU is, the better a deal Britain will get. The reality is that a European Union fearing it is in an advanced state of decay will be less inclined, not more, to give Britain a good deal. The stronger the EU is, the better for Brexit Britain, because the less attractive the exit door looks, the less of an incentive to make an example of the UK among the EU27.

That’s one of the many forces at work in next year’s French presidential election, which yesterday saw the entry of Manuel Valls, the French Prime Minister, into the race to be the Socialist Party’s candidate.

Though his star has fallen somewhat among the general public from the days when his opposition to halal supermarkets as mayor of Evry, and his anti-Roma statements as interior minister made him one of the most popular politicians in France, a Valls candidacy, while unlikely to translate to a finish in the top two for the Socialists could peel votes away from Marine Le Pen, potentially allowing Emanuel Macron to sneak into second place.

But it’s an open question whether he will get that far. The name to remember is Arnaud Montebourg, the former minister who quit Francois Hollande’s government over its right turn in 2014. Although as  Anne-Sylvaine Chassany reports, analysts believe the Socialist party rank-and-file has moved right since Valls finished fifth out of sixth in the last primary, Montebourg’s appeal to the party’s left flank gives him a strong chance.

Does that mean it’s time to pop the champagne on the French right? Monteburg may be able to take some votes from the leftist independent, Jean-Luc Mélenchon, and might do some indirect damage to the French Thatcherite Francois Fillon. His supporters will hope that his leftist economics will peel away supporters of Le Pen, too.

One thing is certain, however: while the chances of a final run-off between Le Pen and Fillon are still high,  Hollande’s resignation means that it is no longer certain that the centre and the left will not make it to that final round.

THE SOUND OF SILENCE

The government began its case at the Supreme Court yesterday, telling justices that the creation of the European Communities Act, which incorporates the European treaties into British law automatically, was designed not to create rights but to expedite the implementation of treaties, created through prerogative power. The government is arguing that Parliament, through silence, has accepted that all areas not defined as within its scope as prerogative powers. David Allen Green gives his verdict over at the FT.

MO’MENTUM, MO’PROBLEMS

The continuing acrimony in Momentum has once again burst out into the open after a fractious meeting to set the organisation’s rules and procedures, Jim Waterson reports over at BuzzFeed.  Jon Lansman, the organisation’s founder, still owns the data and has the ability to shut down the entire group, should he chose to do so, something he is being urged to do by allies. I explain the origins of the crisis here.

STOP ME IF YOU’VE HEARD THIS ONE  BEFORE

Italy’s oldest bank, Monte Paschi, may need a state bailout after its recapitalisation plan was thrown into doubt following Matteo Renzi’s resignation. Italy’s nervous bankers will wait to see if  €1bn of funds from a Qatari investment grouping will be forthcoming now that Renzi has left the scene.

BOOM BOOM

Strong growth in the services sector puts Britain on course to be the highest growing economy in the G7. But Mark Carney has warned that the “lost decade” of wage growth and the unease from the losers from globalisation must be tackled to head off the growing tide of “isolation and detachment”.

THE REPLACEMENTS

David Lidington will stand in for Theresa May, who is abroad, this week at Prime Ministers’ Questions. Emily Thornberry will stand in for Jeremy Corbyn.

QUIT PICKING ON ME!

Boris Johnson has asked Theresa May to get her speechwriters and other ministers to stop making jokes at his expense, Sam Coates reports in the Times. The gags are hurting Britain’s diplomatic standing, the Foreign Secretary argues.

AND NOW FOR SOMETHING COMPLETELY DIFFERENT

It’s beginning to feel a bit like Christmas! And to help you on your way, here’s Anna’s top 10 recommendations for Christmassy soundtracks.

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Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.