ICAEW chart of the week: Austerity in English local authorities

The news of the proposed appointment of Gareth Davies to be the new Comptroller & Auditor General for the UK prompted us to look at the National Audit Office website. There we saw one of its current highlights – a fascinating set of data visualisations derived from a major report published last year on the financial sustainability of local authorities in England.

This has inspired this week’s ICAEW #chartoftheweek, which illustrates just how significantly local government spending has been cut in recent years. Annual net expenditure by English local authorities has fallen by £7.0bn or 16% from £43.7bn in 2010-11 (in 2016-17 prices) to £36.7bn in 2016-17.

Spending on planning and development is less than half what it was, while spending on housing support has almost halved. Budgets for transport (highways and public transport) and culture (including libraries, open spaces, sport and tourism) have been cut by over a third, while spending on waste collection, environmental regulation and administration have also been cut. While spending on adult social care is ‘only’ down by 6%, this conceal a much more dramatic cutback in services given the significant growth in the number of older people needing care. Only children’s social care has increased by more than inflation, and then only slightly.

With reports that more and more local authorities are struggling financially, there are many questions to ask about this often neglected area of the public finances.

We look forward to hearing what areas Gareth Davies will be exploring in his tenure. We hope that he will build on the legacy of the current C&AG Sir Amyas Morse to drive improvements in the public finances on behalf of the citizens of the UK.

To find out more, visit the NAO website for more data visualisations on the financial sustainability of English local government – https://www.nao.org.uk/highlights/financial-sustainability-of-local-authorities-2018-visualisation/.

To comment on this, visit ICAEW Talk Accountancy blog at https://ion.icaew.com/talkaccountancy/b/weblog/posts/chartoftheweek062

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