With Local Government and their services across the UK devolved, and with devolved governments having limited tax raising and severely limited borrowing powers, what happens in England is highly relevant to the financing of local government and of social care services in NI, Scotland and Wales.
According to the Institute for Fiscal Studies: ‘In England, councils are RESPONSIBLE FOR ORGANISING AND FUNDING THE VAST MAJORITY OF SOCIAL CARE SERVICES. Since 2010, these councils have experienced LARGE CUTS TO THEIR BUDGETS, and have MADE SUBSTANTIAL CUTS TO THEIR SPENDING ON SOCIAL CARE SERVICES IN RESPONSE.
‘Between 2009−10 and 2017−18, MEAN PER-PERSON SPENDING ON SOCIAL CARE FOR THE OVER 65s FELL BY 31%.
‘These cuts went hand-in-hand with A REDUCTION IN THE NUMBER OF PEOPLE RECEIVING GOVERNMENT-FUNDED SOCIAL CARE.’ (with my emphasis)
Source: Institute for Fiscal Studies (2020) What impact did cuts to social care spending have on hospitals (https://ifs.org.uk/articles/what-impact-did-cuts-social-care-spending-have-hospitals)
And more on Local Government funding in England from the National Audit Office:
Source: NAO (14 October, 2022) Introducing Integrated Care Systems: joining up local services to improve health outcomes. Report by the Comptroller and Auditor General.
From para 2.35 of the NAO report: ‘Local authorities continue to face significant financial pressures. THE GOVERNMENT HAS REDUCED FUNDING FOR LOCAL AUTHORITIES SINCE 2010 AND THEIR SPENDING POWER DECLINED BY 26% BETWEEN 2010-11 AND 2020-21.
‘While COUNCIL TAX HAS INCREASED SUBSTANTIALLY IN REAL TERMS SINCE 2016-17, if its effects are removed, local authority SPENDING POWER FUNDED BY GOVERNMENT FELL BY MORE THAN 50% BETWEEN 2010-11 AND 2020-21 IN REAL TERMS.’
And: ‘DHSC provides local authorities with the public health grant, an amount ringfenced for spending on public health areas. However, analysis by The King’s Fund shows PUBLIC HEALTH SPENDING ALSO FELL IN REAL TERMS BY 15% BETWEEN 2013-14 AND 2019-20.’
So in England the burden of Local Government financing has been shifted by Tory governments more towards Council Tax payers. This impacts the level of funding captured within the Barnett Formula.
The recent Fraser of Allander Institute (FoAI) publication entitled ‘Scotland’s Budget Report 2022’ examined options available to the Scottish Government in its budget setting for 2023-24. It provided this useful context for the present Council Tax burden in Scotland relative to other parts of the UK:
‘One legacy of the decade-long council tax freeze in Scotland is that residential properties are SUBJECT TO MUCH LOWER LEVELS OF TAXATION THAN IN ENGLAND OR WALES.
‘A typical band D property in Scotland faced a council tax bill of £1,347 in 2022-23, compared to £1,777 in Wales and £1,966 in England.’