Spending Promises Don't Mean Austerity Is Over
Despite the Government’s various spending announcements, Iwan Doherty considers whether austerity is really over.
The announcement that ‘austerity is over’ happens every time the Budget approaches, with Conservative Chancellors attempting to disguise further cuts to spending in an inventive new way.
While the Conservative obsession with reducing the deficit has faded since the 2019 General Election and there have been bold new claims about extra spending. Johnson has pledged to build 40 ‘new’ hospitals, recruit 50,000 new nurses, install 20,000 new police officers and provide billions for HS2.
Recent polling showed this was a desire of the Conservatives’ new supporters in Labour’s former red wall. However, this new spending is unlikely to have a serious impact on the most vulnerable citizens who rely on basic services, especially ones provided by councils. Hiding behind these claims of new spending are serious cuts to local government budgets.
Austerity has a damming impact on councils and the services they provide, with local authorities having faced a reduction in funding from central government of nearly £16 billion since 2010. This is equivalent to losing 60p of every £1 the central government used to supply.
Councils now have to rely increasingly on raising council tax and business rates, which are considered more regressive than other forms of taxation. Councils are also burning through reserves and some have gone bankrupt such as the Conservative-run Northamptonshire council. Critically, this has resulted in a big drop in council spending, with the amount spent on local services down by 21% over the past decade. This has a significant impact on education, housing and social care, which is provided by local authorities.
Councils are focused on providing more social care services, meaning that many have been forced to cut what they spend on housing, transport, planning and cultural and leisure services by 40% or more per person in order to limit cuts to social care services.
These cuts are often hidden due to the fact that they fall on local authorities and they have been used sneakily by the Conservative Government to shift blame for cuts onto struggling Labour councils. Money pledged is also not always going directly to services that are struggling, but instead to meet abstract pledges made during elections.
Spending may not be best measure to determine whether austerity is truly over.
In the past five years, the use of foodbanks in the UK has increased by 73%, according to the Trussell Trust.
Performance measures for the NHS have been some of the worst on record, while statistics on A&E waiting times have been so poor that Government has said it will no longer keep record of them. Healthcare results across the board have plummeted. For example, in 2018-19, performance for cancer treatment hit a record low with only 79% of patients being seen within 62 days, down from nearly 88% when the Conservatives took power. Despite local authorities’ best efforts, 350,000 fewer elderly and vulnerable citizens receive social care from their local authority compared to 2008-9 and this also leaves more people stranded in hospital beds when they don’t need to be there.
Housing has also felt a significant strain due to local government cuts. 79% of councils have reduced their housing spend and a third have cut theirs by more than 50% in the past decade. Home ownership reached a record low in 2016 and, for those under 30, it is becoming an ever distant dream due to a lack of new council houses. Alongside increasing rents, austerity has helped fuel rising homelessness and rough sleeping – the latter of which has increased significantly since the Conservatives took power in 2010.
The impacts of these cuts are being distinctly felt by those who have slipped through the social safety net. How can the Conservatives declare that ‘austerity is over’ when its harmful effects have not yet peaked, let alone be reversed?
The Government’s new spending promises take a too fractured approach to public services, driven by electioneering and votes. What we desperately need is a fundamental upgrade to our public services starting with more money for local authorities and help for those who have all too often not had it of late.