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Follow the money

Tony Travers
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Eric Pickles has encouraged “local taxpayers to go compare and ask how their money is being spent this year”

Eric Pickles has encouraged “local taxpayers to go compare and ask how their money is being spent this year”. Helpfully, the Department for Communities & Local Government published numbers showing how much councils will have to spend in 2011-12.

The figures put Hackney LBC at the top of the range, spending £1,992 per head and Windsor & Maidenhead RBC at the bottom, on £715 per head. The average was about £1,060 per head.

From the imposition of capping in the mid-1980s onwards, successive governments have been responsible for setting council budgets. By controlling both grants and council tax levels, ministers are more important than councillors in determining what is spent.

For the average spend of £1,060 per head, councils provide children’s services, adult social care, refuse collection and disposal, recycling, highways, cleansing, elections, economic development, planning, housing, libraries, transport, arts, sports and leisure, emergency preparations and residual education provision.

Despite the importance of such provision, virtually no part of the public sector has been subject to greater budget reductions in 2011-12 than local government. It is instructive to compare councils’ spending of £1,060 per head with comparable numbers for services provided by central government.

NHS revenue spending will be a whopping £1,650 per head in 2011-12, with schools in England costing about £1,000 per head. The Business department will cost £265 per head, the Home Office £145, the Justice department £130 and Work & Pensions £120. International Development spending, just under £110 per head, is planned to rise sharply in the coming years. In total, Whitehall racks up over £5,000 per annum in revenue spending on services.

If capital and social security expenditure were added in, this total would exceed £9,000 per head. The scale of central government spending shows how difficult it will be for the chancellor to get the deficit down by squeezing council budgets - even disproportionately.

If taxpayers are to get better value for money, they should pay more attention to per capita spending by central departments than to the relatively modest sums spent by local authorities. Central government spending has not yet started to fall. Mr Pickles is right, we should follow the money - straight to the heart of Whitehall.

Tony Travers, director, Greater London Group, London School of Economics

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