Posted by Jake on Saturday, December 28, 2013 with 1 comment | Labels: Article, Austerity, budget cuts, Graphs, Guest, inequality, public sector
The Joseph Rowntree Foundation's report "Coping with the cuts? Local government and poorer communities" shows that spending cuts in more deprived local authority areas are systematically greater than in affluent local authority areas. The difference between most affluent and most deprived being about £100 per head."Figure 3 illustrates this, but also highlights a key finding relevant to this study: that the scale of the cutback has been greater in more deprived local authorities than in more affluent ones. Figure 3 expresses this in terms of per capita spending power, where there is a difference of over £100 per head between the most and least deprived. Deprived authorities were previously more grant-dependent and have suffered disproportionately. However, even in percentage terms, deprived areas have seen a greater reduction in spending power (-21.4 per cent) than affluent areas (-15.8 per cent)."
Here is a brief definition of "Specific" and "Formula" grants in the graph above. They are the two main sources of money from central government and represent around 70% of all local authority funding.
Specific grants pay for individual services, such as key government priorities. This money is ring-fenced and must be used in the way specified by those priorities.
Formula grants are calculated using mathematical formulae based on, among other things, the local council tax base and how many people rely on local services.
For a fuller definition of how local authorities are funded, see http://www.bbc.co.uk/news/uk-11567693and http://www.local.communities.gov.uk/finance/1213/basicguid.pdf
Since specific grants are only made to deprived areas, it is not surprising that any cut made there will not show any impact upon affluent areas. Formula grants that, for example, are for services to those with health or ageing problems will always have greater impact upon deprived areas when cut, as affluent families often mitigate those sorts of problems with their own money. If Rowntree want to make a point here, it should not be about local government spending but about the direct impact of central government cuts upon poorer communities.
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