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Cities shoulder bulk of spending reductions

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Northern cities have been hardest hit by cuts to local government funding, according to a leading think tank.

Research by the Centre for Cities found that Barnsley MBC and Liverpool City Council had been the biggest losers in a decade of austerity which had seen spending per head reduce by £386 for each city dweller, compared to £172 for those living elsewhere.

The Cities Outlook 2019 showed that city residents had shouldered almost three quarters of all real-terms cuts in local government spending over the last decade, despite being home to just 54% of the country’s population.

The analysis looked at total local government spend on services that have been the responsibility of councils since 2009-10.  

Seven of the 10 cities with the largest spending cuts were in the North East, North West or Yorkshire, and on average northern cities saw a 20% reduction to their spending, it said. This contrasted with a cut of 9% for cities in the East, South East and South West, excluding London.

Source: Centre for Cities
Largest real-term fall in total local government spending 2009/10-2017/18

Rank

City

Percentage change

Change per head

1

Barnsley

-40%

-£688

2

Liverpool

-32%

-£816

3

Doncaster

-31%

-£469

4

Wakefield

-30%

-£484

5

Blackburn

-27%

-£542

According to Centre for Cities chief executive Andrew Carter, the cities most affected were economically weaker and less able to absorb the loss of central government funding.

“Councils have managed as best they can but the continued singling-out of local government for cuts cannot continue,” he said.

“There is a very real risk that many of our largest councils will in the near future become little more than social care providers. Fairer funding must mean more funding for cities.”

He called for the spending review to address the financial challenges facing cities, and for councils to be given greater power to decide how they raised and spent funds.

Sir Stephen Houghton (Lab), leader of Barnsley MBC, said the findings came as no surprise to his authority, which, faced by a budget reduction of £107m over the last decade, had been forced to make “tough and unpopular decisions” such as changing the way it delivered services, increasing council tax and cutting almost two in five jobs.

Jo Pitt, local government policy manager at the Chartered Institute of Public Finance and Accountancy, said the report laid bare the “dire situation” of urban authorities which were grappling with deprivation, crime, and climbing social care costs, in a challenging fiscal landscape.

“Our cities and urban centres make a core contribution to the UK economy and must be supported to thrive,” she said.

Source: Centre for Cities
Smallest real-term fall in total local government spending 2009/10-2017/18

City

Percentage change

Change per head

 

Luton

+21%

+£100

 

Oxford

+15%

+£115

 

Aberdeen

-2%

-£117

 

Bournemouth

-3%

-£118

 

Dundee

-3%

-£95

 

However, Simon Edwards, director of the County Councils Network, said all councils had faced unprecedented financial pressures over the last decade, and that rising demand for services should be taken into account alongside cuts to funding.

“County areas have been particularly affected by this perfect storm and are facing a £3.2bn black hole by 2020, largely due to costs outside of their control, and face a 43% reduction in government funding in the period 2016-2020 – far higher than anywhere else,” he said.

Communities secretary James Brokenshire said councils were gaining an additional £1bn in the coming year to strengthen services and support local communities.

“On top of this, we are delivering on our vision for a strong Northern Powerhouse economy with wide-ranging support including a historic £13bn investment to improve journeys for commuters and motorists and over £5bn for Devolution and Growth Deals,” he said.

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