Performance Tracker 2022/23: Spring update - 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 duties 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. ⁹⁵ 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, April 2022, www.instituteforgovernment.org.uk/publication/neighbourhood-services-under-strain 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  under-utilised 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. 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. ⁹⁶ Institute for Government interview.

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

Local authorities spent £3.7 billion on Covid support in 2021/22, down from £5.6bn in 2020/21. ¹⁰³ 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. ¹⁰⁴ 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

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 £512 million 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. ¹⁰⁵ 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 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. ¹⁰⁶ Department for Levelling Up, Housing & 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 2021/22 ¹⁰⁷ Department for Levelling Up, Housing & 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. ¹⁰⁸ Department for Levelling Up, Housing & 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 plateaued, but with variation between services

Overall spending on neighbourhood services fell slightly by 1% in real terms between 2020/21 and 2021/22. This continues the trend of relatively flat spending changes since 2017/18. However, spending on neighbourhood services was 28.2% lower in real terms than 2009/10.

The relatively small spending decrease in the last year hides variation between services. The service with the greatest annual decline was waste services, where funding fell by 3.4% in real terms – though spending is still 5.4% higher than pre-pandemic levels, a reflection of the increased volume of activity seen during the pandemic. Waste collection is the service that has seen spending cut least since 2009/10, at only 12% in real terms.

Like waste collection, planning work continued throughout the pandemic with social distancing less of a concern. Indeed, planning spending in 2021/22 is 4% higher in real terms than 2019/20 spending, and saw in-year increases in spending in both 2020/21 and 2021/22.

Other spending areas have yet to fully return to pre-pandemic spending levels. Spending on road maintenance and food safety have fallen for two successive years. And while spending on library services, trading standards, and health and safety increased in 2021/22 these relatively small increases failed to offset the fall in spending seen in 2020/21. 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. ¹¹⁷ Institute for Government interviews.

The post-2010 decline in neighbourhood services spending was driven in large part by substantial reductions in grant funding from central government. ¹¹⁸ 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, April 2022, www.instituteforgovernment.org.uk/publication/neighbourhood-services-under-strain In response, several councils took advantage of rules allowing them to borrow to invest in commercial properties, in the hope that this would provide a new income stream. ¹¹⁹ Comptroller and Auditor General, Local authority investment in commercial property, Session 2019–20, HC45, National Audit Office, 2020, retrieved 26 January 2023, https://www.nao.org.uk/wp-content/uploads/2020/02/Local-authority-investment-in-commercial-property.pdf In 2022/23, both Croydon and Thurrock issued Section 114 notices – in effect, declaring themselves bankrupt ¹²⁰ Fright M, ‘Croydon Council’s struggle to balance the books’, Institute for Government, 20 December 2022, www.instituteforgovernment.org.uk/comment/croydon-council-section-114 – after large losses on such investments. In Croydon’s case this was the third Section 114 notice in two years. Since 2020/21, eight Section 114 notices have been issued, ¹²¹ House of Commons Levelling Up Housing and Communities Committee, ‘Oral Evidence: Departmental Annual Report and Accounts 2021–22’, HC 962, Q. 11, https://committees.parliament.uk/oralevidence/12494/pdf mostly by councils that have made risky commercial investments.

Neighbourhood service delivery changed during 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. ¹²² 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. ¹²³ 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 the 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. ¹²⁴ 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, ¹²⁹ 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.

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 2020/21 ¹³⁰ 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. ¹³¹ 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-targets-for-england-2020 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 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. ¹³² 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-targets-for-england-2020

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. ¹³⁶ Department for Environment, Food & 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-… 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. ¹³⁷ Department for Environment, Food & 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-targets-for-england-2020

Lockdowns caused backlogs in some neighbourhood services

Social distancing requirements, a reduced workload as pubs and restaurants closed, and the need to enforce Covid regulations ¹³⁸ 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 making progress 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, ¹⁴⁵ 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 ¹⁴⁶ 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. ¹⁴⁷ 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 “intelligencebased” approach for low-risk establishments – in other words, not conducting unnecessary inspections of compliant establishments. ¹⁴⁸ 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. ¹⁴⁹ 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. ¹⁵⁰ 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. ¹⁵⁴ 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. ¹⁵⁵ 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 Potential demand during 2021/22 may indeed be higher than this as staffing and materials shortages delay some projects. ¹⁵⁶ Ingham P, ‘Staff and materials shortages slow growth in UK construction sector’, The Guardian, 5 August 2021, retrieved 25 January 2023, www.theguardian.com/business/2021/aug/05/staff-and-materials-shortages-slow-growth-in-uk-construction-sector

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 369,718 to 423,831. 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, 5 and 4 percentage points respectively. This decline is driven by a few factors. First, there is a lack of resource within local authorities ¹⁶⁸ 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. ¹⁶⁹ 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. ¹⁷⁰ 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. ¹⁷¹ 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, April 2022, p. 6,  www.instituteforgovernment.org.uk/publication/neighbourhood-services-under-strain

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. In a survey conducted by the Local Government Association (LGA), 94% of councils reported experiencing recruitment and retention difficulties, with 58% struggling to recruit planning officers and 53% having problems finding legal professionals. ¹⁷² Local Government Association, Local Government Workforce Survey 2022, research report, May 2022, pp. 12–14, www.local.gov.uk/sites/default/files/documents/LG%20Workforce%20Survey%202022%20-%20Final%20for%20Publication%20-%20Tables%20Hard%20Coded.pdf Local authorities are struggling to compete with  private sector pay and are losing staff because of it. ¹⁷³ 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. ¹⁷⁴ 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. ¹⁷⁵ Institute for Government interview.

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. ¹⁷⁶ Atkins G, Kavanagh A, Shepheard M, Pope T and Tetlow G, Performance Tracker 2021, Institute for Government, 19 October 2021, www.instituteforgovernment.org.uk/publication/performance-tracker-2021/neighbourhood-services ^{, 177} 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 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. ¹⁷⁸ Institute for Government interview.

Satisfaction with councils remains similar to pre-pandemic levels

After a slight dip in the third quarter of 2021, 62% of residents were either very or fairly satisfied with their local council in October 2022, close to figures three years earlier. ¹⁸¹ Local Government Association, ‘Polling on resident satisfaction with councils: Round 33’, November 2022, p. 8, www.local.gov.uk/sites/default/files/documents/Resident%20Satisfaction%20Polling%20Round%2033%20-%20October%202022.pdf Likewise, public satisfaction with their local area was at 79% in October 2022, compared to 80% in June 2019. ¹⁸² Local Government Association, ‘Polling on resident satisfaction with councils: Round 33’, November 2022, p. 8, www.local.gov.uk/sites/default/files/documents/Resident%20Satisfaction%20Polling%20Round%2033%20-%20October%202022.pdf

Roughly the same trend occurred for road maintenance. In October 2019, 40% of residents were either very or fairly satisfied with the service. This then fell only slightly to 39% in October 2022. In the other two services for which there is data – waste collection and libraries – satisfaction fell more sharply from 80% to 78% and from 62% to 58% in that same period, but in both cases, these are comparable to earlier scores from 2019. ¹⁸⁴ Local Government Association, ‘Polling on resident satisfaction with councils: Round 33’, November 2022, p. 17, www.local.gov.uk/sites/default/files/documents/Resident%20Satisfaction%20Polling%20Round%2033%20-%20October%202022.pdf