Spending on neighbourhood services in England continued to fall in the past year, reflecting local authority spending cuts. Local authorities have managed this by prioritising visible and critical aspects of services – such as health-critical food hygiene inspections – over aspects with fewer immediate impacts. Where that has not been enough, they have, in some cases, reduced service provision – such as reducing the number of libraries.
Public satisfaction with neighbourhood services has held up, indicating that they have become more efficient – delivering the same quality despite financial pressures. But declines in local authorities’ unallocated reserves since 2014/15 suggest that councils are increasingly unable to manage spending cuts by making efficiencies, and are instead drawing on one-off sources of money to balance their budgets.
Neighbourhood services are the transport, housing, cultural, regulatory and planning services that affect the environment in which people live. In England they are mostly delivered by local authorities, partly funded by central government grants.
Central government – ministers and their respective Whitehall departments – puts legal obligations on local authorities to do certain things, such as providing “a comprehensive and efficient library service”. It also decides how much grant funding local authorities receive, which taxes they can levy, and how much they can vary them. Within these constraints, local authorities make tax and spending decisions. As long as they meet their statutory duties – including for adult and children’s social care in addition to neighbourhood services – they can spend as much or as little on neighbourhood services as they choose.
It is challenging to understand what has happened to neighbourhood services since 2009/10, as little data on them is available at the national level. In this chapter, we focus on six neighbourhood services for which some nationally comparable data is available:* food safety, health and safety, libraries, road maintenance, trading standards and waste collection.
* Whitehall does not ask local authorities to collect comparable service information on most neighbourhood services, and so lacks the data to judge whether and how activity is changing.
Spending on six neighbourhood services has fallen by 29% in real terms since 2009/10…
Day-to-day spending on the six neighbourhood services in England declined 29% in real terms between 2009/10 and 2016/17. These services have seen larger spending cuts than other locally delivered services because local authorities have protected spending on social care for adults and children.
Local authorities have not cut spending on all neighbourhood services equally, however. Since 2009/10, libraries have borne the largest real-terms day-to-day spending cuts – almost 40% – followed by the monitoring of trading standards (38%), road maintenance (29%), food safety (25%), health and safety (25%) and waste collection (20%).
Looking just at day-to-day spending overestimates the size of spending cuts in some cases. If capital – investment – spending increases, then the real fall in spending may be lower than implied by day-to-day spending. This is the case for road maintenance. There has been a 19% real-terms increase in local highways and transport capital spending since 2009/10, some of which will have been used for road maintenance.* This increase in capital expenditure has meant that total road maintenance spending has not fallen as dramatically as day-to-day spending. Department for Transport figures show that total road maintenance spending has declined 13% since 2009/10. In the other services we examine in this chapter, capital spending does not make up a large share of total spending.
* The Department for Transport’s 2014 guidance on highways maintenance states that both capital and revenue can be used for maintenance. See Department for Transport, Gearing Up for Efficient Highway Delivery and Funding, The Stationery Office, 2014, p. 10.
… and local authorities have charged for services
To manage with less money, most local authorities have asked users to shoulder more of the burden of paying for services. Income from sales, fees and charges provided 8.1% of spending on our six services in 2016/17, an increase from 6.5% in 2009/10. The largest increases have been in trading standards and waste collection, where the share of spending financed by charging has increased by 6% and 3% respectively.
Local authorities often charge for services that they are not legally obliged to provide. The number of authorities charging for garden waste collection rose from 88 to 199 between 2010/11 and 2017/18, while the number offering free garden waste collection fell from 236 to 137. In food safety, charges are typically for ‘non-statutory advice’ (that is, consultancy) to local businesses that want to know how to improve their food hygiene rating. Local authorities cannot charge for official inspections.
Demand for neighbourhood services has grown
As spending on neighbourhood services has been cut, the population has increased. The number of people in England increased by 6.6% between 2009/10 and 2017/18. As demand for neighbourhood services is largely a function of population size, local authorities have had to provide more services for less money.
Demand for specific services is not directly correlated with change in population. Road maintenance varies based on traffic volume and weather conditions, food inspections vary according to the number of food businesses and waste collection depends on how much people throw away. But these service-specific indicators are also – at differing rates – increasing.
Input: the number of staff working in food safety, libraries and trading standards has been cut
Staff costs make up a large proportion of spending on neighbourhood services, and in services where we can count staff,* the number of staff has been cut, in line with trends in local government staffing since 2010.**
Local authorities have made considerable staff reductions in libraries: between 2009/10 and 2016/17, the number of full-time equivalent library staff declined by 34%.*** Staff cuts fell disproportionately on professional library posts: in 2009/10, 20% of paid staff occupied professional library posts, compared with 14% in 2016/17. To compensate, local authorities have increased their reliance on volunteers: the number of library volunteers increased by 171% over the same period. As the number of volunteers has increased, they have also contributed more of their time. The total number of volunteer hours more than tripled between 2009/10 and 2016/17, increasing from 500,000 to 1.6 million (m).****
In food safety, the number of professionally qualified food standards and food hygiene staff in England – workers who investigate complaints, inspect businesses and enforce compliance through licensing – declined by 60% and 17% respectively between 2009/10 and 2017/18. As the number of registered food establishments increased over the same time, fewer staff are now covering more businesses. The number of professionally qualified staff per 1,000 food establishments declined from 4.4 in 2009/10 to 2.9 in 2017/18. Remaining staff are now undertaking more interventions – from inspections and sampling to surveillance and intelligence- gathering – than they were in 2009/10. On average, food hygiene staff completed 246 interventions each in 2017/18, an increase of 23 since 2009/10. Food standards staff completed 328 interventions each in 2017/18, more than double the number of interventions undertaken by each member of staff in 2009/10.*****
There have also been large staff reductions in trading standards and health and safety. The number of full-time equivalent (FTE) trading standards officers fell by 56% between 2009 and 2016 (from 3,534 FTE to 1,561 FTE). The number of inspectors with health and safety powers – who investigate and enforce health and safety law – in English, Welsh and Scottish local authorities declined****** 48% (from 1,050 FTE to 543 FTE) between 2009/10 and 2016/17.
* We cannot count the number of staff employed to deliver neighbourhood services because official statistics exclude staff working for outsourced providers. Road maintenance and waste collection are largely managed through outsourced contracts, so we cannot count changes in staff in either.
** In 2013, the Audit Commission found that reducing the number of staff was the most common strategy that councils used to manage financial constraints: 96% of single-tier and county councils and 86% of district councils cut the number of staff between 2010/11 and 2013/14. See Audit Commission, Tough Times: Councils’ responses to financial challenges from 2010/11 to 2013/14, Audit Commission, 2013, p. 5.
*** This decrease is partially explained by a lower response rate to the Chartered Institute of Public Finance and Accountancy’s annual library survey, as the share of local authorities reporting full-time equivalent staff numbers declined from 98% to 83% between 2009/10 and 2016/17.
**** This increase is partially explained by a higher response rate to the Chartered Institute of Public Finance and Accountancy’s annual library survey, as the share of local authorities reporting volunteer hours increased from 78% to 81% between 2009/10 and 2016/17.
***** Part of this larger increase in standards interventions may be due to better reporting of intelligence-gathering activity, and unique in-year factors. There was a large increase in sampling in 2013/14 due to the horsemeat scandal, and a large increase in advice and education activity in 2014/15 due to new European Union regulations coming into force, for example.
****** Changes in the number of trading standards and health and safety staff may overestimate actual change, as there is some overlap with professionally qualified food standards and food hygiene staff.
Input: the number of libraries has fallen by 14% since 2009/10
Staff are not the only resource in the six services we examine in this chapter. Road maintenance requires technical equipment, and buildings make up a large part of spending on libraries,* for example.
The number of libraries in England declined 14% between 2009/10 and 2016/17.** Where libraries do exist, more are being run by communities rather than by local authorities. Local authority-run libraries made up 77% of all libraries in 2016/17 compared with 89% in 2012/13, the only years for which we have data. At the same time, the share of community-managed libraries increased from 4% to 9%. Communities taking on more responsibilities looks set to continue: only 13 out of the 23 new libraries that opened in 2016 were run by councils, compared with 21 out of 24 in 2010.
We cannot say whether library cuts mirror resource cuts in the other neighbourhood services because there is no data on the sites, or the technical equipment, used in the other neighbourhood services.
* Library-running expenses (including building maintenance) were 55% of total library spending in 2016/17. See Ministry of Housing, Communities and Local Government, ‘Local authority revenue expenditure and financing England: 2016 to 2017 individual local authority data – outturn’, Ministry of Housing, Communities and Local Government, 2017, retrieved 13 September 2018, www.gov.uk/government/statistics/local-authority-revenue-expenditure-and-financing-england-2016-to-2017-individual-local-authority-data-outturn.
** Part of this decrease is due to declining response rates to the Chartered Institute of Public Finance and Accountancy’s annual library survey, as only 91% of local authorities reported library numbers in 2016/17, compared with 99% in 2009/10.
Output: local authorities have reduced services in waste collection and libraries…
Local authorities have responded to spending cuts by reducing provision and prioritising resources on the most visible and critical aspects of neighbourhood services.
Local authorities are collecting rubbish less often and curtailing library opening hours. The number of councils providing weekly residential waste collections fell by over 40% (from 152 to 87) between 2010/11 and 2017/18. Between 2013/14 and 2017/18, the only years for which we have data, the number of councils providing weekly dry recycling collections declined. This suggests that regular waste collection has not been replaced by more frequent recycling collections.
Libraries are now open for fewer hours. Total library opening hours, excluding mobile libraries, declined between 2009/10 and 2016/17: the number of libraries open 30 hours or longer each week decreased by 13%, while the number of libraries open less than 29 hours a week increased by 3%.
… while focusing on the riskiest areas of food standards, health and safety
In food safety, local authorities have prioritised their efforts on the most critical interventions – inspecting the riskiest businesses that are most likely to affect consumers’ health. They have done this by prioritising food hygiene over food standards.* They have focused on completing food hygiene interventions on time – as frequently as the food law rules oblige – while letting the timeliness of food standards interventions slip.
The share of food hygiene interventions completed on time – which assess health- critical issues such as microbiological quality and contamination – has declined only slightly and has consistently remained above 80%. In contrast, the timeliness of food standards interventions, which normally assess less health-critical issues such as food composition and labelling, has markedly deteriorated. The share of standards interventions completed on time has fallen from 62% to 37%. Local authorities have prioritised the highest-risk establishments in both food hygiene and standards. The largest reductions in the timeliness of inspections have taken place in the lowest-risk establishments.
Health and safety have also targeted inspections at the riskiest businesses – taking an ‘intelligence-led’ approach. Between 2009/10 and 2016/17 the total number of annual health and safety visits carried out in Great Britain declined by 59%, following the release of a new national enforcement code explicitly designed to improve the use of limited resources in May 2013. The broad share of proactive, or planned, inspections declined 94% between 2009/10 and 2016/17 while visits following requests or complaints declined only 33%.
In contrast, local authorities have kept up their road maintenance. Between 2009/10 and 2016/17 the number of miles of ‘B, C and unclassified roads’ – that is, smaller roads connecting areas and local roads intended for local traffic – receiving some maintenance in a year remained broadly flat. The number of miles of ‘A roads’ – that is, major roads connecting areas – receiving maintenance also remained broadly flat, although most of this activity was in short-term ‘surface-dressing’ treatments. Larger sums might have to be spent later on extensive repair.
* Food hygiene inspections are typically led by environmental health teams and food standards by trading standards teams and so may not always be carried out by the same tier of council. Not all councils are able to prioritise between them.
Output: people’s satisfaction with waste collection, libraries and road maintenance has largely held up
In spite of these changes, there is evidence that the quality of services has been broadly maintained. Polling commissioned by the Local Government Association suggests that public satisfaction with waste collection, libraries and road maintenance declined only slightly throughout the period of spending cuts, although satisfaction with road maintenance has dipped notably over the past year.
Between September 2012 and June 2018, public satisfaction with waste collection fell by 6% (from 83% to 77%), satisfaction with libraries fell by 7% (from 67% to 60%) and satisfaction with road maintenance fell by 14% (from 46% to 32%). These figures suggest that if the public has felt a reduction in the quality of locally delivered services, it has not been on anything like the same scale as the spending reductions.
Regulatory services – food safety, health and safety, and trading standards – are harder to judge. Ultimately, the quality of regulatory services is determined by the level of compliance they achieve – the number of people or businesses following the rules. Taking this approach, the data suggests that the quality of food safety services has not declined. The share of ‘broadly compliant establishments’ – businesses that local authorities rated equivalent to food hygiene ratings of 3 to 5 – increased slightly from 88.6% in 2009/10 to 89.8% in 2017/18. The number of consumer complaints about food establishments was broadly flat between 2010/11 and 2015/16.*
But the picture in terms of road maintenance is mixed. The share of roads that the Department for Transport reports should be considered for maintenance has declined since 2009/10. However, the share of ‘unclassified’ roads – typically lesser used, often residential – that should be considered for maintenance has increased. The Asphalt Industry Alliance estimates that the share of roads in ‘poor condition’ – with less than five years of life remaining – has increased over the past two years but is still less than in 2011/12, the earliest year for which it has data.
Overall, then, it appears that local authorities have managed to cut spending on most neighbourhood services while maintaining their quality. But lack of data impedes our assessment. As successive governments since 2010 have increased council autonomy over some local services,** they have moved away from monitoring and managing performance, making it harder to judge what the consequences of spending reductions have been at a national level.
* There was a 24% increase between 2015/16 and 2016/17, but this likely reflects a new service on the Food Standards Agency’s website, introduced in February 2016, which allowed consumers to report problems online. Complaints decreased 2.5% between 2016/17 and 2017/18. See Food Standards Agency, Annual Report on UK Local Authority Food Law Enforcement 1 April 2016 to 31 March 2017, Food Standards Agency, 2017, p. 23.
** The Coalition Government reduced the number of statutory duties and some performance targets, including local area agreements and the National Indicator Set. See Ministry of Housing, Communities and Local Government, ‘Councils’ red tape cut as 4,700 Whitehall targets slashed’, press release, 14 October 2010.
Have neighbourhood services become more efficient and can that be maintained?
Local authorities have made their neighbourhood services more efficient since 2010. Service provision appears not to have fallen at the same rate as spending. The decline in resident satisfaction since 2012 has not been as large as the decline in spending. Local authorities are now collecting waste, inspecting food businesses, opening libraries and maintaining roads more efficiently than they were in 2010.
It is less clear how local authorities made these efficiencies, and whether they are sustainable. Whitehall lacks data on the amount and cost of inputs – the staff, buildings and equipment used to deliver services. That would be needed to say whether local authorities have made efficiencies by buying inputs at lower prices, or by improving productivity – getting more output for each input. The Government and the Ministry of Housing, Communities and Local Government have few non-financial warning signs to monitor whether efficiencies that local authorities make are sustainable.
There are case studies of local authority savings, which emphasise back-office improvements, service redesign and sharing services, but there is no way to assemble firm figures of economies in the six neighbourhood services we examine in this chapter. Unlike workers in the other public services analysed in this Performance Tracker, council workers were not formally covered by the public sector pay cap. We do not know whether council workers’ pay went up more, but councils were expected to “operate to the same standards as the rest of the public sector”, so it is unlikely to have done so. Given that we also know little about workers in outsourced services, we cannot say whether local authorities have made savings by holding down wages.
There is some evidence that staff in food standards and libraries have become more productive. Professionally qualified food standards and hygiene staff are undertaking more inspections and audits per person. In libraries, there are now fewer paid staff per library. There were the equivalent of 4.6 full-time paid staff per library in 2009/10, which declined to 3.8 in 2016/17.* But the absence of any information on staff morale or recruitment or retention data in all services means we cannot comment on how staff have managed under spending cuts – and whether workforce issues are likely to emerge.
There is qualitative evidence of pressure in neighbourhood services. The Department for Business, Energy and Industrial Strategy, which is responsible for consumer protection, has told the National Audit Office that it believes trading standards are a “high-risk area in the medium term” due to service cuts. Based on case studies of local authorities, the National Audit Office has argued that some authorities’ cuts to routine road maintenance, such as maintaining drainage and gullies, risk long-term deterioration of roads. But in the absence of worsening trends over time, it is not possible to attribute these pressures to efficiencies made since 2010 – and so to analyse whether efficiencies are sustainable.
* Although given that the number of volunteers increased at the same time, this is only an efficiency for the public sector.
Have efficiencies been enough to meet demand?
Similarly, we cannot say whether efficiencies have been enough to meet demand in these services. We are not able to measure queueing or unmet demand in libraries, health and safety, road maintenance, trading standards and waste collection.
We have limited data for food safety and standards, which suggests that demand is being met in spite of deep spending cuts. The number of food establishments waiting to be inspected and rated for food hygiene in England actually shrank from 7.3% in 2009/10 to 5.4% in 2017/18. But we cannot say whether a similar pattern has emerged in other services – or whether local authorities are choosing to leave some demand unmet.
Have local authorities made sustainable efficiencies?
In the absence of data to analyse whether efficiencies have been enough to meet demand in neighbourhood services, changes in local authority reserve levels provide a useful indicator of the sustainability of local authorities’ financial position.
Local authorities built up their reserves in the early years of austerity – shoring themselves up against further spending cuts and uncertainty about future funding. This uncertainty has not gone away, but reserves have fallen since 2015/16 – suggesting that local authorities are struggling to meet their day-to-day costs.
This is because drawing down from reserves is one of the only things that local authorities can do if the efficiencies they have made are not enough to enable them to meet demand within the money that Westminster has given them or allows them to raise. They are not allowed to run deficits. In truly drastic circumstances, local authorities can issue a Section 114, prohibiting any new expenditure beyond that which is legally required – as Northamptonshire did twice in 2018, for its 2017/18 and 2018/19 budgets respectively.
Reserves are not an ideal indicator of service performance. In individual local authorities, changes in reserves are likely to reflect specific local issues. But overall, trends in local authority reserves indicate whether local authorities can continue to meet their day-to-day costs each year – and whether efficiencies have been sufficient to meet demand.
Initially, local authorities increased their total usable reserves* by 54% in real terms between 2009/10 and 2015/16. But reserve levels then fell by 5% between 2015/16 and 2016/17. This indicates a turning point in local authority behaviour, as more councils decided to spend their reserves rather than increase them.
Since then, reserves have increased again: by 1% between 2016/17 and 2017/18. This, however, primarily owes itself to an injection of emergency cash for social care – in the form of the improved Better Care Fund and the Council Tax precept for social care. Both must be spent on social care and are currently only forecast to last until 2019/20. Without these cash injections, local authorities may have drawn down more of their reserves in the past year.** Local authority revenues would have been cut 5.1% in real terms between 2016/17 and 2017/18 without this extra money.
Drawing down reserves does not necessarily mean that local authorities are not financially sustainable. Local authorities can draw down prudently, by using reserves to meet the upfront costs of one-off ‘invest-to-save’ projects, such as investing in road maintenance to reduce later insurance claims. Local authorities do not report what they spend their reserves on, so we cannot say whether their use of reserves has been prudent or not.
However, we can see whether, and by how much, local authorities planned to use their reserves in a given financial year. Unplanned uses of reserves – where local authorities either use reserves without budgeting for it or use more reserves than they budgeted to – are likely to indicate that local authorities are using reserves to top up day-to-day spending, perhaps having struggled to implement savings plans or manage costs. The National Audit Office calculates that unplanned withdrawals from reserves increased from £114m in 2010/11 to £658m in 2016/17, the only years for which figures can be calculated.
Local authorities do not look like they can continue to deliver the same quantity and quality of services without dipping into reserves to finance day-to-day activity. Reserves can only be used once: local authorities who spend theirs to manage their regular activity will not find the practice sustainable.***
* We define usable reserves as total earmarked and unallocated reserves not specifically ringfenced for public health or schools.
** It should be noted that unallocated reserves – the reserves that local authorities can use to cushion unexpected in-year financial pressures – have been consistently falling since 2014/15.
*** For example, the independent Caller Review into Northamptonshire found that the council had made significant use of one-off reserves to balance its budget. See Caller M, Northamptonshire County Council Best Value Inspection, The Stationery Office, 2018, pp. 9–10.