Performance Tracker 2022: Neighbourhood services

Local authorities were increasingly stretched even before the pandemic began. The previous decade had seen successive central governments cut their grant funding, while demand for adult and children’s social care – among other statutory services such as homelessness services – continued to rise. These pressures forced councils to make tough decisions about which services they should prioritise and – more commonly – which they should scale back. ¹⁶³ Atkins G and Hoddinott S, Neighbourhood services under strain: How a decade of cuts and rising demand for social care affected local services, Institute for Government, May 2022, www.instituteforgovernment.org.uk/publications/neighbourhood-services Neighbourhood services – food safety, health and safety, trading standards, libraries, planning, road maintenance, and waste collection and disposal – consequently entered the pandemic with radically reduced or changed amenities.

The effects of Covid restrictions on demand for neighbourhood services varied widely. Some – such as food safety, health and safety, and trading standards, which we refer to collectively as regulatory services – had to cease almost all activity due to social distancing rules and redeployment of staff to support authorities’ Covid response. Others – for example, libraries – continued to operate, though using novel or previously underutilised means. Others still, such as waste collection and planning, saw increased demand.

Looking ahead, neighbourhood services face several problems – and have some opportunities. There are backlogs in some services – such as planning and regulatory services – and others will now capitalise on Covid-era innovations to expand service provision. Local authorities leave the pandemic with their finances in an unexpectedly better state than many predicted, ¹⁶⁴ Ogden K and Philips D, Looking back to look forwards: what can we learn from data on the impact of COVID-19 on councils in 2020-21?, Institute for Fiscal Studies, 11 January 2022, https://ifs.org.uk/publications/looking-back-look-forwards-what-can-we-learn-data-impacts-covid-19-councils-2020-21 with reserves increasing during the pandemic – though much of this increase is already earmarked for spending, meaning the increase is somewhat illusory and reserves are forecast to fall below pre-pandemic levels in 2021/22 and 2022/23. The cost of living crisis will also threaten the financial sustainability of local authorities; councils are already reporting worsening recruitment and retention of staff as they struggle to compete with the wages offered by private sector employers. ¹⁶⁵ Institute for Government interview. In addition, authorities that we spoke to are planning to extend service provision – for example, longer opening hours in libraries – to help communities struggling with the coming winter crisis.

Local authorities spent £4.9bn on emergency Covid support in 2021/22

Local authorities spent £3.7bn on Covid support in 2021/22, down from £5.6bn in 2020/21. ¹⁶⁶ Department for Levelling Up, Housing & Communities, ‘February 2021: COVID-19 funding for local government in 2021 to 2022 policy paper’, 12 August 2022, www.gov.uk/government/publications/covid-19-emergency-funding-for-local-government/covid-19-funding-for-local-government-in-2021-to-2022-policy-paper This money was spent on a range of local authority-supplied services, such as adult and children’s social care, neighbourhood services, housing and central services.* In addition, local authorities lost income as receipts from business rates, council tax, sales, fees and charges fell. This lost income totalled £1.2bn in 2021/22, down from £5.1bn in 2020/21. ¹⁶⁷ Ibid.

Of the £9.3bn spent by local authorities on emergency support across the two years of the pandemic, £1.6bn was spent on neighbourhood services, with £1.1bn spent in 2020/21 and £512m in 2021/22.

In response to the pandemic, central government provided local authorities with emergency funding that was intended to cover their increased costs and lost income. ¹⁶⁸ Ibid. This support from central to local government totalled £15.2bn across 2020/21 and 2021/22,** with £9.4bn disbursed in 2020/21 and £5.8bn in 2021/22. ¹⁶⁹ Department for Levelling Up, Housing and Communities, ‘Coronavirus (COVID-19): emergency funding for local government in 2021 to 2022 and additional support in 2021 to 2022’, 12 August 2022, www.gov.uk/government/publications/covid-19-emergency-funding-for-local-government Some of this funding was earmarked for specific purposes – for example, the Welcome Back Fund allocated £56m for reopening high streets in 2021/22 ¹⁷⁰ Department for Levelling Up, Housing and Communities, ‘Welcome Back Fund: Guidance’, 6 August 2021, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1021246/Welcome_Back_Fund_Guidance_v3_Final.pdf – while central government provided £6.2bn of un-ringfenced funding across the two years, with £1.6bn falling in 2021/22. ¹⁷¹ Department for Levelling Up, Housing and Communities, ‘Coronavirus (COVID-19): emergency funding for local government in 2021 to 2022 and additional support in 2021 to 2022’, 12 August 2022, www.gov.uk/government/publications/covid-19-emergency-funding-for-local-government

_{* This excludes spending on education services, public health and police, fire and rescue services to make these amounts comparable with other spending amounts in this chapter, where we also exclude these same items.}

_{** It should be noted that the amount of funding that central government provided to local authorities does not match the amount that local authorities spent. This is because local authorities also have income from locally raised revenues – council tax, business rates and other income – as well as grants from central government that they would have received in the absence of the pandemic. Any additional money that was left over after emergency Covid spending would also have then been put into reserves, as discussed later in the chapter.}

Spending on neighbourhood services rose, but with variation between services

Overall spending on neighbourhood services increased by 1.1% in real terms between 2019/20 and 2020/21. This continues the trend of relatively flat spending changes since 2017/18. However, spending on neighbourhood services was 27.3% lower in real terms than 2009/10.

The relatively small spending increase in the last year hides variation between services. The service with the greatest annual decline was libraries, where funding fell by 7.3% in real terms between 2019/20 and 2020/21. Real-terms spending on libraries has now fallen 48% since 2009/10. In addition to libraries, spending on road maintenance, trading standards, food standards, and health and safety all fell. With the exception of road maintenance, these are all services that saw declines in activity during the pandemic as a result of social distancing requirements. ¹⁷² Institute for Government interviews.

Spending on both planning and waste collection increased in real terms between 2019/20 and 2020/21, by 3% and 9.8% respectively. Waste collection is the service that has seen spending cut least since 2009/10, at only 8.5% in real terms. Both services continued to operate relatively normally throughout the pandemic, with social distancing less of a concern. In both cases, activity in fact increased, driving spending increases, as discussed later in this chapter.

Local authority reserves increased in 2020/21

Despite expectations that reserves would fall during the pandemic, ¹⁷³ Atkins G, Pope T, Shepheard M and others, Performance Tracker 2021, Institute for Government, 19 October 2021, www.instituteforgovernment.org.uk/publication/performance-tracker-2021/neighbourhood-services usable reserves as a proportion of service expenditure increased in 2020/21, up to 163% for shire districts (which do not have responsibility for social care) and 55% for social care authorities, from 131% and 41% respectively in 2019/20. As this is the aggregate number, it hides variation between local authorities; of the 276 local authorities for which there is data, 84.8% increased their usable reserves in 2020/21, while 15.2% ran down their reserves.

Aggregate reserves increased for several reasons. First, central government determined how much support to provide to local government by surveying councils about the costs they expected to increase and the income they expected to lose. This process, however, didn’t take account of areas – such as leisure centres – where Covid meant that spending declined, ¹⁷⁴ Ogden K and Philips D, Looking back to look forwards: what can we learn from data on the impact of COVID-19 on councils in 2020-21?, Institute for Fiscal Studies, 11 January 2022, https://ifs.org.uk/publications/looking-back-look-forwards-what-can-we-learn-data-impacts-covid-19-councils-2020-21 thus overinflating expected costs.

Second, the uncertainty of the pandemic, particularly in the early months, meant that many local authorities submitted forecasts that ultimately turned out to overstate their cost pressures. ¹⁷⁵ Ibid.

Third, central government conducted survey rounds frequently, often as much as every month. Local authorities who were already struggling with resourcing sometimes submitted the previous estimate to save time. ¹⁷⁶ Institute for Government interview. This is not to say that local authorities deliberately misled central government, but rather that the uncertainty and pressures of the pandemic resulted in overinflated estimates of the amount they would require.

Fourth, a large proportion – 19.6% – of 2020/21 emergency support was disbursed in March 2021, the end of the financial year. This made it difficult for local authorities to spend that money before the end of the financial year, therefore inflating reserves. ¹⁷⁷ Sharman L, ‘Council reserves grow by £10bn in past year’, Local Gov, 2 February 2022, www.localgov.co.uk/Council-reserves-grow-by-10bn-in-past-year/53635

It should be noted that this outcome is preferable to the opposite; local authorities were on the front line of the pandemic and it would have hurt England’s response to Covid if insufficient funding had prevented them from responding effectively.

The high level of reserves at the end of 2020/21 does not mean that local authorities are in a more sustainable financial position than they were before the pandemic. This is for a number of reasons. First, ‘usable reserves’ is a combination of unallocated and earmarked financial reserves. Unallocated reserves can be spent at the discretion of the local authority, but local authorities set earmarked reserves aside for a specific purpose. ¹⁷⁸ CIPFA, ‘Briefing: English local authority reserves’, June 2015, p. 4, www.cipfa.org/-/media/Files/CIPFA-Thinks/Reports/Briefing-Paper-LG-Reserves-v12.pdf Earmarked reserves as a proportion of usable reserves rose to 86.4% in 2020/21, up from 82.8% in 2019/20 and its highest level since at least 2009/10.

Second, and relatedly, local government often planned out the spending of grant funding over 2020/21 and 2021/22, despite receiving all funding from central government in 2020/21. Any money that was not spent at the end of the year was then put into reserves, inflating the number at year end. ¹⁷⁹ Institute for Government interview. This is supported by forecasts that show usable reserves falling back to 33.7% and 94.4% for social care authorities and shire district authorities in 2021/22. ¹⁸⁰ Ministry for Housing, Communities and Local Government, ‘Local authority revenue expenditure and financing England: 2021 to 2022 budget’, 24 June 2021, www.gov.uk/government/statistics/local-authority-revenue-expenditure-and-financing-england-2021-to-2022-budget That reserves are budgeted to fall in 2021/22 shows that local authorities planned to spend any saved emergency support funding and more in order to meet their obligations.

Neighbourhood service delivery has changed since the pandemic

The pandemic forced local authorities to deliver neighbourhood services differently. Social distancing requirements made it difficult for many services to operate as normal, with some moving their delivery online. In those services that ran a reduced service, local authorities redeployed many of the staff to Covid enforcement roles. ¹⁸¹ Local Government Association, ‘Local authority COVID-19 compliance and enforcement good practice framework’, June 2021, www.local.gov.uk/local-authority-covid-19-compliance-and-enforcement-good-practice-framework Libraries responded to the pandemic by making many of their services virtual and also expanded the range of services they provided. ¹⁸² Libraries Connected, ‘Libraries in the pandemic: evolving services to meet local need’, December 2020, www.librariesconnected.org.uk/page/libraries-pandemic-evolving-services In addition to these more typical library duties, library staff also supported the community through programmes such as “Keep in touch” (KIT), in which library staff telephoned vulnerable people in the local community to help combat loneliness. ¹⁸³ Libraries Connected, ‘Libraries in lockdown: Connecting communities in crisis’, October 2020, www.librariesconnected.org.uk/resource/libraries-lockdown-connecting-communities-crisis

With quieter roads and an outdoors working environment, some local authorities reported increasing road maintenance activity during the pandemic, ¹⁸⁴ Asphalt Industry Alliance, ‘Annual Local Authority Road Maintenance Survey 2021’, 31 March 2021, p. 6, www.asphaltuk.org/wp-content/uploads/ALARM-survey-2021-FINAL.pdf though this did not result in an improvement in the proportion of local authority-maintained roads recorded as in need of maintenance. The proportion of classified roads (A, B and C) in need of maintenance remained stable between 2020/21 and 2019/20, while the proportion of unclassified roads in need of maintenance increased from 15% to 17%. This is likely to be because local authorities prioritised repairing roads in ‘amber’ condition ¹⁸⁵ Asphalt Industry Alliance, ‘Annual Local Authority Road Maintenance Survey 2022’, 22 March 2022, p. 3, www.asphaltuk.org/wp-content/uploads/ALARM-survey-2022-FINAL.pdf (according to the Road Condition Index, RCI ¹⁸⁶ Department for Transport, ‘Road conditions in England – a basic guide’, (no date), p. 2, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1032345/road-conditions-guide.pdf ), while the Department for Transport classifies a road as being in need of maintenance only if it is in ‘red’ condition. They prioritised these roads because the cost of repairing amber roads is lower than repairing red roads, which require more extensive work. ¹⁸⁷ Institute for Government interview.

There was increased demand for waste collection during the pandemic. The kilograms of waste collected per person from homes increased from 392 in 2019/20 to 406 in 2020/21 ¹⁸⁸ Department for Environment, Food and Rural Affairs, ‘ENV18 – Local authority collected waste: annual results tables’, 18 January 2022, www.gov.uk/government/statistical-data-sets/env18-local-authority-collected-waste-annual-results-tables – a 3.6% rise – as more people stayed at home. ¹⁸⁹ Department for Environment, Food and Rural Affairs, ‘Progress report on recycling and recovery targets for England 2020’, press release, 5 January 2022, www.gov.uk/government/publications/progress-report-on-recycling-and-recovery-targets-for-england-2020/progress-report-on-recycling-and-recovery-targe… How that waste was disposed of also changed. The proportion of household waste that was sent for recycling declined from 42.8% in 2019/20 to 41.4% in 2020/21 – the lowest level of recycling since 2011/12. The year 2020/21 was also the fourth in a row when incineration exceeded recycling as the most used method of waste disposal; 48.1% of waste being incinerated. This result also meant that the government missed its target to recycle 50% of household waste by 2020. ¹⁹⁰ Ibid.

This reduction in the recycling rate occurred for a number of reasons. First, the amount of household waste increased during this time as more people stayed at home during lockdown, stretching recycling resources. It is notable that although the recycling rate declined year-on-year, local authorities recycled slightly more household waste in 2020/21 compared to 2019/20 – 10,077 compared to 10,057 thousand tonnes. Second, local authorities suspended some services during the pandemic. In particular, councils closed household waste and recycling centres (HWRCs) between April and June 2020 – service points that normally make a large contribution to household waste recycling – and reopened them with some restrictions to maintain social distancing. Local authorities also chose to prioritise other services when the pandemic hit, and as a result paused the collection of low-priority garden waste from households. ¹⁹¹ Department for Environment, Food and Rural Affairs, ‘Guidance on prioritising waste collection services during coronavirus (COVID-19) pandemic’, 14 December 2020, retrieved 25 August 2022, www.gov.uk/ government/publications/coronavirus-covid-19-advice-to-local-authorities-on-prioritising-waste-collections/guidance-on-prioritising-waste-collection-services-during-coronavirus-covid-19-pandemic One of the Department for Environment, Food and Rural Affairs’ hypotheses for why the proportion of recycling fell is that residents put (heavy) garden waste into residual bins following the suspension of garden waste services, increasing the tonnage of residual waste and consequently decreasing the proportion of recycled waste. ¹⁹² Department for Environment, Food and Rural Affairs, ‘Progress report on recycling and recovery targets for England 2020’, press release, 5 January 2022, www.gov.uk/government/publications/progress-report-on-recycling-and-recovery-targets-for-england-2020/progress-report-on-recycling-and-recovery-targe…

Lockdown caused backlogs in some neighbourhood services

Social distancing requirements, a reduced workload as pubs and restaurants closed, and the need to enforce Covid regulations ¹⁹³ Caliskan N, ‘Re: COVID-19 regulations – enforcement in workplaces’, Local Government Association, 11 February 2021, p. 4, https://committees.parliament.uk/publications/4837/documents/48620/default meant that local authorities stopped normal patterns of compliance work in areas such as food safety, health and safety, and trading standards.

This reduction in activity created a backlog of food safety inspection, though local authorities are already making progress in reducing this. The Food Standards Authority (FSA) reports that the number of food businesses awaiting inspection in England at the end of March 2022 was 51,633 ¹⁹⁴ Food Standards Agency, ‘Performance and Resources Report Q4 2021/22’, 15 June 2022, p. 31, www.food.gov.uk/sites/default/files/media/document/FSA%2022-06-16%20-%20Q4%2021-22%20Performance%20and%20Resources%20report.pdf down from a high of 65,400 at the end of June 2021 ¹⁹⁵ Food Standards Agency, ‘Performance and Resources Report Q1 2021/22’, 15 September 2021, p. 5, www.food.gov.uk/sites/default/files/media/document/fsa-21-09-14-q1-21-22-performance-and-resources-report.pdf – a 21.1% reduction in nine months – though this is still 201.2% higher than the 17,343 businesses awaiting inspection in February 2020 ¹⁹⁶ Food Standards Agency, ‘Local authority delivery and performance’, 8 December 2020, p. 5, www.food.gov.uk/sites/default/files/media/document/fsa-20-12-09-la-delivery-and-performance-final.pdf Local authorities are making this progress by following the FSA’s Covid recovery plan, which recommends prioritising high-risk and non-compliant establishments while implementing an ‘intelligence-based’ approach for low-risk establishments – in other words, not conducting unnecessary inspections of compliant establishments. ¹⁹⁷ Food Standards Agency, ‘Local authority recovery roadmap’, 2 May 2021, p. 6, www.food.gov.uk/sites/default/files/media/document/fsa-21-05-02-local-authority-recovery.pdf A return to normal staffing patterns after Covid has also helped this. In March 2021, only 43.4% of food hygiene and food standards staff were available to carry out food controls. This increased to 82.4% by October 2021 and 88.7% by March 2022. ¹⁹⁸ Food Standards Agency, ‘Local authority performance update’, 30 May 2022, www.food.gov.uk/about-us/fsa-22-06-17-local-authority-performance-update

Trading standards has not accumulated a backlog in activity in the same way that food work has, as it does not involve the same levels of programmed inspections, but it is still under pressure. The Chartered Trading Standards Institute has warned of a possible boom in fraud as criminals take advantage of consumers struggling with the cost of living crisis and an understaffed trading standards workforce. ¹⁹⁹ Chartered Trading Standards Institute, ‘Trading standards: Cost of living crisis will greatly expand consumer vulnerability’, press release, 22 February 2022, www.tradingstandards.uk/news-policy/news-room/2022/trading-standards-cost-of-living-crisis-will-greatly-expand-consumer-vulnerability

Planning departments are also struggling with their own backlog. The number of planning applications received increased for the second year in a row in 2021/22, up to 459,331 from 431,396 in 2020/21 – a 6.5% year-on-year increase and the highest number of applications since 2017/18. There were a number of reasons for this increase. First, people spent more time at home during lockdown and wanted to improve their properties. ²⁰⁰ Institute for Government interview. Second, in the absence of other usual spending on things such as going out, travel or holidays, households had more disposable income, which they chose to spend on home improvement. ²⁰¹ Howard T, ‘Homeowners stay put and spend to extend’, The Times, 8 March 2022, retrieved 23 May 2022, www.thetimes.co.uk/article/homeowners-stay-put-and-spend-to-extend-mfm75xbsl

Rising applications requires an increase in the number of responses. The number of decisions increased faster than applications between 2020/21 and 2021/22, rising 14.6% from 369,751 to 423,765. The speed of responding to applications, however, fell in 2021/22 across all three types of planning applications. The proportion of major, minor and other applications that local authorities decided within the agreed time limit fell by 3, 4 and 4 percentage points respectively. This decline is driven by a few factors. First, there is a lack of resource within local authorities ²⁰² Heath L, ‘Development plans stall nationwide as planning delay hits ‘critical point’’, Inside Housing, 15 December 2021, retrieved 23 May 2022, www.insidehousing.co.uk/news/news/development-plans-stall-nationwide-as-planning-delays-hit-critical-point-73686 that predates the pandemic. ²⁰³ Comptroller and Auditor General, Planning for new homes, Session 2017–19, HC 1923, National Audit Office, 2019, p. 41, www.nao.org.uk/wp-content/uploads/2019/02/Planning-for-new-homes.pdf Cuts to local authority budgets since 2010 have resulted in fewer planning officers, who are now struggling to deal with the Covid-induced backlog. Second, retention of planning officers has worsened over the pandemic as they have faced high workloads and the difficulties of remote working, further slowing response times. ²⁰⁴ Institute for Government interview. Third, local authorities have increasingly prioritised major planning applications – for which they are able to charge a larger fee – as they have been forced to supplement cut budgets with locally raised revenue. ²⁰⁵ Atkins G and Hoddinott S, Neighbourhood services under strain: How a decade of cuts and rising demand for social care affected local services, Institute for Government, May 2022, www.instituteforgovernment.org.uk/publications/neighbourhood-services

Local authorities are struggling with recruitment and retention

As with many other public services, local authorities are finding it difficult to meet staffing requirements in a tight labour market.

Local authorities are struggling to compete with private sector pay and are losing staff because of it. ²⁰⁶ Calkin S, ‘Widespread workforce shortages revealed’, Local Government Chronicle, 16 February 2022, retrieved 11 July 2022, www.lgcplus.com/politics/workforce/widespread-workforce-shortages-revealed-16-02-2022 One interviewee from a local authority told us that an employee in their IT department left the organisation for a private sector role where they were paid more than double their local authority salary, with the benefit of working completely remotely. ^{207 Institute for Government interview.}  The same interviewee told us that their local authority was struggling to recruit lawyers, accountants and other professionals who all found more competitive pay in the private sector. ²⁰⁸ Institute for Government interview. In January, 60% of councils responding to a survey reported either a large or moderate concern that they would not be able to deliver the same quality of services over the next six months due to workforce issues. ²⁰⁹ Local Government Association, COVID-19 Workforce Survey: Research report, February 2020, p. 15, https://local.gov.uk/sites/default/files/documents/LGA%20Research%20Report%20-%20COVID-19%20Workforce%20Survey%20-%2014%20January%202022%20Final.pdf

Covid is also still contributing to this workforce crisis. In a survey conducted by the Local Government Association (LGA) in January 2022, 63% of councils that responded reported that they had staff absences due to long Covid. ²¹⁰ Ibid., p. 10.

Local authorities are using workforce practices from the pandemic to help alleviate some of these pressures. At the height of the pandemic, local authorities deployed staff from areas with workforce capacity to others that needed support. ^{211 Atkins G, Pope T, Shepheard M and others, Performance Tracker 2021, Institute for Government, 19 October 2021, www.instituteforgovernment.org.uk/publication/performance-tracker-2021/neighbourhood-services   212 Moore D, ‘Other frontline staff used to keep council waste and recycling services going’, Circular, 5 January 2022, retrieved 26 May 2022, www.circularonline.co.uk/news/frontline-staff-used-to-keep-council-waste-and-recycling-services-going
Institute for Government interview.} One interviewee told us that their council developed a platform for recording workforce capacity and facilitating the movement of staff from one area of the council to another during the pandemic, which they continue to use to ease some of the worst of the workforce crisis. ²¹³ Institute for Government interview.

Satisfaction with councils remains above pre-pandemic levels

After a slight dip in the third quarter of 2021, 63% of residents were either very or fairly satisfied with their local council in June 2022, on a par with three years earlier. ²¹⁴ Local Government Association, Polling on resident satisfaction with councils: Round 32, June 2022, p. 9, www.local.gov.uk/sites/default/files/documents/Resident%20Satisfaction%20Polling%20Round%2032%20-%20FINAL_MJ_Accessible.pdf Similarly, public satisfaction with their local area was at 81% in June 2022, compared to 80% in June 2019. ²¹⁵ Ibid., p. 8.

Roughly the same trend occurred for road maintenance. In June 2019, 38% of residents were either very or fairly satisfied with the service. This then fell only slightly to 37% in June 2022. In the other two services for which there is data – waste collection and libraries – satisfaction increased, from 74% to 81% and from 58% to 60% in that same period. ²¹⁶ Ibid., p. 16.