council spending to have fallen by almost 30% per head over the course of this parliament

04-08-2014

Figures released today show that local authority spending in England is estimated to have fallen by just under 30% over the course of this Parliament.

The data, compiled by the Department for Communities and Local Government (DCLG) and the Chartered Institute of Public Finance and Accountancy (CIPFA), shows that local authorities per capita spending in England will have fallen by 14.5% in cash terms by 2014-15, when compared to the last financial year of the last Parliament in 2009-10.

When adjusted for inflation this represents a steep drop of 29.1%, a significant reduction in the spending power of local authorities. Meaning that spending levels for 2014-2015 will in fact have reduced to the same level of spending in 2005-2006 in cash terms. In 2014-2015 Total Service Expenditure (TSE) has been budgeted to fall by 3.1% to £93.5bn, while last year, budgeted spending excluding public health spend (which was a new responsibility from 2013-2014) fell by 1.0%.

Rob Whiteman, CIPFA’s Chief Executive said:

“The continued sharp downward trajectory of local authority spending in both cash and real terms shows the significant financial challenge councils have faced over the past few years. Many authorities have managed this reduction well and continue to live within their means, but we are now starting to see some councils face real and immediate financial pressures.

“If we are to prevent the financial failure of vulnerable local authorities, we must recognise that some councils have been hit harder than others and will need more support. But also that there is a real and pressing need for fundamental reform of the financing of local government if we are to see it not just survive but succeed and thrive over the coming years.”

The biggest losers in terms of service provision will be Housing with a 7.8% reduction in budgeted spending, followed closely by Education with a 7.6% cut to spending, although much of the fall in Education spending is likely to be due to schools converting to academies, removing their funding from local authority control. Other areas seeing significant reductions are Culture (-6.3%) and Highways and Transport (-6.2%).

In contrast to this funding for Children's Social Care will increase by 16.4% in 2014-2015 and Public Health will see an increase of 5.5% from last year in budgeted spending.

The 2014-2015 figures also show a decrease in all regional spending by local authorities compared to 2013-2014. The East Midlands (-4.1%) and North East (-5.0%) stand out as the local authorities reducing their budgeted spend the most.

ENDS

Contact: Matt Patterson, CIPFA Press Office

T: 020 7543 5787

Notes to Editors:

  1. These calculations are based on budgeted figures for 2014-2015 taken from the CIPFA/DCLG Revenue Account Budget Estimates (RA) return. The actual expenditure figures may be different by the end of the financial year.
  2. If not clearly stated figures are not adjusted for inflation.
  3. Local authority expenditure on ‘services to young people and other community learners’ is now included within ‘other education and community budget’ and ‘services for young people’ in 2014-2015
  4. The 2014-2015 TSE figure with is compared to the 2009-2010 and 2005-2006 TSE figures excludes public health spend, which is a new local authority responsibility from 1 April 2013 and has been removed for comparative purposes.
  5. Full details are available from www.cipfastats.net.
  6. Total Service Expenditure Table

Table 1: Total Service Expenditure, England

Change

Change

2012-13

2013-14

2014-15

2012-13 to 2013-14

2013-14 to 2014-15

2013-14*

2014-15

£m

£m

£m

%

%

£'head

£'head

Education

39,289

38,793

35,835

(1.3)

(7.6)

725

665

Highways & Transport

5,272

5,129

4,814

(2.7)

(6.2)

96

89

Children's Social Care

6,513

6,636

7,726

1.9

16.4

124

143

Adult Social Care

14,736

14,650

14,364

(0.6)

(2.0)

274

267

Housing

2,160

2,096

1,933

(2.9)

(7.8)

39

36

Cultural & Related

2,913

2,789

2,614

(4.2)

(6.3)

52

49

Environmental & Regulatory

5,259

5,291

5,139

0.6

(2.9)

99

95

Planning & Development

1,288

1,265

1,276

(1.8)

0.9

24

24

Police

11,604

11,166

11,121

(3.8)

(0.4)

209

206

Fire

2,217

2,174

2,123

(1.9)

(2.4)

41

39

Central

3,159

3,286

3,271

4.0

(0.5)

61

61

Other

327

550

470

68.5

(14.7)

10

9

Total excluding Public Health

94,737

93,827

90,685

(1.0)

(3.3)

1,754

1,684

Public Health

n/a

2,699

2,849

n/a

5.5

50

53

Total Service Expenditure

n/a

96,526

93,534

n/a

(3.1)

1,804

1,736

* Uses population data from the Registrar General’s Estimate at June 2012 supplied by ONS.