Poorer areas ‘hardest hit by cuts’

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Published: Friday 6th March 2015 by The News Editor

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Poorer areas have been hardest hit by cuts to local government spending over the past five years, according to a think-tank.

The respected Institute for Fiscal Studies (IFS) found local authority spend in England went down by an average of 20.4% in real terms between 2009-10 and 2014-15.

The figure per head saw a sharper drop of 23.4% due to population growth.

But the scale of cuts varied dramatically from place to place, with a 46.3% reduction in Westminster compared to just 6.2% in North East Lincolnshire.

Further curbs planned for after the election are also “generally” focused on areas that have lost out during this parliament, the briefing note said.

London boroughs face falls of 6.3% on average next year, as opposed to 1.9% in shire counties.

Grants from central government – excluding those specifically for education, public health, police and fire services – have dropped 36.3% overall in real terms while council tax revenues have risen by 3.2%.

The total cuts to spending were found to be slightly higher than the reductions to revenues, as on average authorities had chosen to bolster their reserves.

IFS research economist David Innes said: “English councils – like many government departments in Whitehall – have experienced sharp cuts to their spending power over the last five years.

“But the size of the cuts has varied a lot across England. On the whole, it is more deprived areas, those with lower local revenue-raising capacity, and those that have seen the fastest population growth that have seen the largest cuts to spending per person.

“Further cuts are likely to come in the next parliament and they could well be focused on many of the same local authorities if the current mechanism for allocating funds is retained.”

Local Government Minister Kris Hopkins said: “We have continued to deliver a fair settlement to every part of the country – north and south, rural and urban, city and shire – and the truth is that councils have continued to balance their budgets while public satisfaction with services has been maintained.

“Every bit of the public sector needs to do their bit to pay off deficit left by the last administration, including local government which accounts for a quarter of all public spending. But so far over this Parliament, council spending, excluding education, has actually increased in cash terms.

“Every council should therefore be able to deliver sensible savings while protecting frontline services for local taxpayers and keeping council tax down. This could include doing more joint working, getting more for less through smart procurement, tackling local fraud and council tax arrears, or utilising their reserves and surplus property.”

Shadow communities secretary Hilary Benn said: “These figures confirm the shocking way in which the most deprived areas have faced the biggest reductions in spending under David Cameron. The Tories said those with the broadest shoulders should bear the greatest burden but they have done the very opposite. Another Tory Government will continue to treat areas with the greatest needs unfairly.

“Labour will distribute funding to councils more fairly based on need and end the bias against the poorest communities, giving local authorities longer-term funding settlements so they can plan ahead to best protect the local services on which people rely.”

Published: Friday 6th March 2015 by The News Editor

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