Spending on many services which affect people’s local neighbourhood – waste collection, road maintenance, food safety, trading standards, libraries – has fallen sharply in the last seven years, reflecting a large overall cut in local authority spending. During this period, some activities have been scaled back, re-prioritised or more selectively targeted – but public satisfaction has largely held up, suggesting real efficiencies. However, the Government lacks sufficient data to judge how much further these efficiencies can go.
Spending on services which affect people’s local environment has fallen by around a quarter since 2009/10.
Spending on many of the services which affect the environment in which people live has fallen substantially in the last seven years. Since 2009-10 (in England), real-terms net day-to-day spending on local trading standards services has fallen by a third (from £229m to £153m)*; on libraries by 31% (from £1.17bn to £805m); on local food safety by 22% (from £134m to £104m); and on waste collection by 19% (from £1.37bn to £1.11bn). Day-to-day spending on local road maintenance has also fallen by 26% (from £2.88bn to £2.18bn), although a rise in capital spending suggests that large-scale maintenance activity has been protected to an extent.
All of these services are provided by local authorities. Overall, local authority expenditure on services (excluding education) fell by 13% during this period.** That means that other services have been protected relative to these neighbourhood services: adult social care spending, for example, fell by just 6% over this period (as discussed in Chapter 2).
Local authority revenue comes from a number of sources, including a direct grant from central government, council tax, business rates and sales, fees and charges. Central government determines the size of the grant, but also sets the parameters within which local authorities can raise their revenue.
Central government also sets some of the parameters within which local authorities operate: some ‘statutory duties’ of local authorities are determined by legislation, and there are sets of non-statutory guidance and other regulations which guide supposedly ‘discretionary’ activities. Beyond this, decisions around spending on and activity in these local services are made by locally elected councillors and their officials, and determined by local priorities. Central government therefore has a significant role in determining the funding for these services, but a smaller role in delivering them.
Local authorities – which are not allowed to run deficits – responded to planned budget reductions by building up their reserves. The level of non-ringfenced local authority revenue reserves in England grew by 46% in real terms between 2010/11 and 2014/15, but then last year fell by around 2%. A 2014 survey by the Local Government Association (LGA) found that 37% of local authorities were planning to use their reserves to support their revenue budgets in the coming years. Central government should pay attention to any signs that local authorities are running down their reserves to plug gaps in day-to-day spending. Reserves are a one-off pot of money: a local authority that spent theirs in order to manage their regular activity would soon find themselves in significant financial distress.
Charging for services has become more prevalent in recent years. In 2012/13, the Audit Commission found that 76% of single-tier and county councils, and 54% of district councils, had introduced charging across a wider range of services. The number of authorities charging for organic (i.e. garden) waste collection rose from 88 to 155 between 2010/11 and 2015/16, while the number offering free services fell from 236 to 175.
Staff numbers have been scaled back in some services.
The data show large staff reductions in some service areas, particularly regulatory services. The number of trading standards officers fell by 56% between 2009 and 2016 (from 3,534 FTE to 1,561 FTE), and the number of inspectors with health and safety powers in UK local authorities fell by 30% (from 1,050 FTE to 736 FTE) between 2009/10 and 2014/15. Concerns have been raised that low staffing levels are threatening some local authorities’ ability to carry out their statutory and regulatory duties in these areas.
In libraries, volunteers have filled the gap left by staff reductions: in 2012, the number of library volunteers overtook the number of paid library staff. Staff numbers (in England, Wales and Scotland) fell by 32% (from 24,800 to 16,900) between 2009 and 2015, while volunteers rose 153% (from 14,900 to 37,700).
It is more difficult to tell what has happened to staffing for other services – road maintenance and waste collection are largely managed through outsourced contracts, so the staff working in them are not technically local authority employees. In 2013, the (now abolished) Audit Commission – which appointed independent auditors to local public bodies and published analysis based on their work – found that reducing staff was the most commonly used strategy for managing financial constraints in local government (employed by 96% of single-tier and county councils and 86% of district councils) between 2010/11 and 2013/14.
Some services have been scaled back.
The scope of some of these services has been scaled back since 2010. Waste collections, most notably, have become less frequent: the number of weekly residential waste collections fell by a third (from 152 to 100) between 2010/11 and 2015/16. Recycling collections do not appear to have filled that gap, at least not in the last three years: between 2013/14 and 2015/16, the number of dry recycling collections – weekly or otherwise – remained flat.*** Between 2010 and 2015, the amount of residual kerbside waste collected fell by 4%, while the amount of waste sent for dry recycling rose by just 3%.
The number of sites which offer particular services were falling. The number of libraries (including mobile libraries) fell 8%, from 4,168 to 3,827, between 2009 and 2015. The number of children’s centres has also fallen: in July 2017, there were 2,421 children’s centres in England, and 708 sites providing children’s services alongside other activity, compared with 3,632 Sure Start centres in April 2010.
This is not to say that blanket reductions have been applied across the board – nor that a reduction in the number of sites offering a service necessarily implies a reduction in activity. Local authorities have used a range of strategies to target their shrinking resources.
Visible and critical elements of services have been prioritised.
There is evidence that councils are prioritising critical and visible services. For example, the evidence suggests that improving the quality of major roads has been prioritised over less-used ones. Since 2012, the deterioration in quality of unclassified roads which began in 2009/10 has halted, while the proportion of ‘A’, ‘B’ and ‘C’ roads which ‘should be considered for maintenance’ (the Department for Transport indicator of road quality) has fallen. The result is an overall improvement in road conditions, but also a widening in the gap between ‘unclassified’ roads and the rest.
While structural maintenance has been prioritised, case study evidence from the NAO suggests that some authorities are cutting back on some less-urgent activities, such as maintaining drainage and gullies, risking long-term deterioration of roads. The consequences may be starting to be felt: last year saw an uptick in the number of local authority roads in ‘poor’ condition, after four years of improvement in standards.
Food safety and trading standards are ‘regulatory services’, which are also prioritising their most critical activity. In these kinds of services, officers work to ensure that local businesses are complying with regulations relating to safety or quality: through activities such as inspections, education and prosecution.
Data from the Food Standards Agency (FSA) suggest that safety is being prioritised. Food hygiene interventions,**** which assess issues such as microbiological quality and contamination, are mostly happening to schedule: the number of hygiene interventions completed on time has remained above 80% since 2009/10. At the same time, food standards interventions, which largely assess less health-critical issues, have fallen much further behind: the number of standards interventions completed on time has fallen from 62% to 36% in this period.
Within both of these categories, the highest-risk establishments have been prioritised. The largest declines in timeliness have taken place in the categories of establishments designated the lowest-risk.
Targeting activity where known problems exist – taking an ‘intelligence-led’ approach - can be a sensible way to run a more efficient service, and is being encouraged by some professional bodies. For example, the number of ‘proactive’ health and safety inspections fell by 95% between 2009/10 and 2014/15, following the release of a new national enforcement code explicitly designed to improve the targeting of resources. At the same time, concerns have been raised about the potential consequences of this shift. A 2015 study commissioned by the Department for Business, Innovation and Skills (BIS) found that many trading standards officers were concerned that a more reactive working style could allow problems to be missed, or to escalate before they were dealt with.
In road maintenance, ‘reactive’ maintenance has clearer, negative consequences. Pothole repairs do not have the same longevity as a new road surface, and cracks in poorly maintained roads can swiftly become new potholes. The Asphalt Industry Alliance (AIA) – who undertake an annual survey of local highways authorities – estimates that reactive repairs cost a third more than a planned maintenance programme. Despite fears that cost pressures would encourage local authorities to take a ‘worst-first’ approach to road maintenance, the evidence suggests that a strategic, planned maintenance approach is being protected: since 2010/11, the proportion of local authorities’ carriageway maintenance budget spent on reactive maintenance has fallen from 27% to 22%.
In spite of sharp spending reductions, residents’ satisfaction with these services has largely held up.
Polling by the Local Government Association suggests that public satisfaction with local authorities as a whole – and with the individual services they provide – has dropped since 2012, but only slightly. Satisfaction with waste collection has fallen by three percentage points (from 83% to 80%); with road maintenance by seven percentage points (from 46% to 39%) and with libraries by five percentage points (from 67% to 62%). These data suggest that if the public has felt a reduction in the scope and quality of locally delivered services, it has not been on anything like the same scale as the spending reductions.
Richer and more informative data on the quality of services may well be held at a local level. This is the most important place for it to sit: ultimately, locally elected council members hold a large share of the responsibility for the direction and performance of local services. But while they have control over budget allocations, local authorities can only manage their finances within the parameters set by Whitehall: the rates of council tax they are allowed to set, and the funding they are provided by the Treasury.
There are other services that have a significant impact on people’s local neighbourhood, which have seen substantial budget reductions, such as open spaces (23% reduction), culture and heritage (26% reduction) and sports and recreation (34% reduction), but for which there is even less national-level data to show what has happened as a result. The 2013 Spending Review was supported by a cross- government assessment on potential savings and impact on services, but not all service areas were covered (including libraries, youth services and trading standards).
The lack of data on the scope and quality of these services means that Whitehall – the Treasury, the Department for Communities and Local Government, and the departments which set local authorities’ various statutory obligations – is unable to understand the performance of locally delivered services. It cannot be sure how much further efficiency savings can be achieved. As the NAO argues, this means there is room for service quality to fall significantly in a number of areas before central government takes notice – risking a repeat of the deterioration, crisis and cash injection cycle which we have seen elsewhere.
* The spending category ‘trading standards’ includes food standards; spending on food standards activity specifically is not provided.
** Total net current expenditure, excluding education and Housing Benefit expenditure (the latter 2009/10 only).
*** We would not expect these changes to happen progressively: most waste collection is done through large, multi-year contracts which are only likely to change substantially when they come up for renewal.
**** ‘Interventions’ are mostly inspection, surveillance and sampling visits, but also include advice and education. This category does not include ‘enforcement’ activity, such as prosecutions, issuing warnings and prohibition notices and seizing food.