Which public services face the biggest pressures ahead of the spending round?

Summary

Repeatedly delayed and now only covering a single year, rather than the planned three, today’s spending round will see the government set out its spending plans for 2020/21. Much like the recently-announced Queen’s Speech, this looks to be part of preparations for a potentially imminent election campaign.

The chancellor is likely to focus on vote-winners in today’s spending round

After nine years of austerity, all major public services face some pressures – from a rising number of vacancies for children’s social workers, to falling retention rates among teachers – but the extent of service deterioration, and the size of the challenge to maintain current performance, varies significantly.

Deciding what the scope of public services should be is an inherently political choice – there are trade-offs to be made between the quality and availability of services and levels of taxation. Last year, the government announced that “the era of austerity is finally coming to an end”. If ending austerity means reversing some or all of the decline in the quality and availability of public services since 2010, our analysis from Performance Tracker – produced in partnership with the Chartered Institute of Public Finance and Accountancy – shows that adult social care and prisons are most in need of additional money because they have seen the largest declines in performance.

However, government briefings so far suggest that this is not how the chancellor is likely to prioritise the money for next year. While the government has indicated that it will provide some additional funding for prisons, other spending boosts are likely to focus on electorally popular services, such as hospitals, schools and the police.

Hospitals, schools and police will certainly benefit from extra funding given the pressures they face – but they are not the services that have experienced the sharpest declines in performance since 2010.

Adult social care and prisons are most in need of money to restore performance to pre-austerity levels

In adult social care, publicly funded social care has become harder to access as local authorities have responded to spending constraints by tightening their interpretation of who is eligible for social care. Fewer adults receive publicly funded care than did in 2010 – even though the number of people aged 65 and over has grown and requests for support from the working age population have risen since 2015/16. Local authorities have not been able to meet all the needs of the growing number of adults eligible for social care, meaning adults with care needs have increasingly relied on unpaid care – care provided informally by family and friends.

In prisons, there has been a sharp and sustained decline in prison safety since 2012/13. The number of prisoner assaults on other prisoners, and on staff, are both more than twice as high as they were in 2010. ‘Protesting behaviour’ incidents – including prisoners taking hostages and barricading off parts of prisons – have also risen substantially since 2012/13.

School and police performance has not declined as notably. Pupil attainment in school has not declined since 2010 and victim satisfaction with the police has fallen only three percentage points, from 69% to 66%, since 2009/10. Hospitals face fewer immediate pressures following the government’s announcement last summer that NHS England would receive a real-terms funding increase of 3.4% each year for the next five years.

This does not mean that additional spending on hospitals, schools and the police will not be beneficial. Secondary schools are finding it harder to recruit and retain teachers, hospitals face a growing bill to fix their maintenance backlog – which has risen from £4.1bn (2009/10) to almost £6bn (2017/18) – and the average time taken to charge a criminal offence rose from 14 days in March 2016 to 18 days in March 2018. Additional funding – if well-targeted – could help schools, hospitals and police forces address these pressures; but these are other services in greater need of support to restore performance to 2010 levels.

Our updated assessment (below) considers the latest available data to assess the scale of the gap between spending and demand, how far services have made efficiencies, and whether these were enough to maintain performance in nine key public services.

Methodology

Our concern rating summarises our assessment of past performance, with a coloured rating for three different elements:

  • How demand for a service has changed, compared to how spending has changed
  • Whether that service has become more efficient – delivering more, or the same, for less
  • Whether those efficiencies were enough to ‘bridge the gap’ between the change in demand and the change in spending to enable the service to maintain its performance.

The boundaries between the different ratings are not defined quantitatively: the data is not adequate to allow this. Instead, we have made qualitative judgements – the basis of which is outlined in Table 2 – which are informed by the quantitative data we analyse.

For our full analysis of public services, please see Performance Tracker – produced in partnership with the Chartered Institute of Public Finance and Accountancy.

Table 2: Methodology for concern ratings

Category

Criteria

Has spending risen faster than demand?

Green – Spending has risen in real terms at the same rate or faster than demand

Amber – Demand has risen somewhat faster than spending (0-10%)

Red – Demand has risen significantly than spending (10+%)

Grey – Insufficient information to make a clear judgement

Have efficiencies been made?

Green – Clear evidence of efficiency improvements in the service

Amber – Mixed evidence of efficiency improvements

Red – No efficiencies made – or efficiency has declined

Were those efficiencies enough to bridge the gap between spending and demand?

Green – No signs of unmet demand, queuing or overspending

Amber – Some evidence of unmet demand, queueing or overspending

Red – Widespread evidence of unmet demand, queueing or overspending

Grey – Insufficient information to make a clear judgement