This report is part of a larger study of the management of austerity by local government in England and Scotland. It is particularly concerned with impacts on disadvantaged people and places.

30 Nov 2013

The 2010 Comprehensive Spending Review and subsequent Local Government Finance Settlements in 2010 and 2012 were the ‘worst in living memory’ according to a press release from the Local Government Association. In June 2013, a Spending Review for one further year (2015/16) indicated that the budget for English local government would be reduced by a further 10 per cent and further consultation about the technical implementation of the cuts reveals that funding for core services may in fact be cut by up to 15 per cent. While there is evidence that Scottish Government policy has offered a degree of protection to the budgets of councils north of the border, it is clear that local government is one of the foremost casualties of austerity in the UK. 

The core of the project undertaken by students of Heriot-Watt University, Edinburgh and University of Glasgow, comprises detailed analysis of change in local government finances nationally as well as in-depth case studies of four local authorities.



  • Current cutbacks in local government spending follow a period of sustained increase in real terms expenditure, amounting to 68% in England and 47% in Scotland between 1997 and 2009. However, local government’s share in the economy in 2012 was no larger than in 1991.
  • We estimate that spending power of local authorities in England is set to reduce by 19% in nominal terms by 2014 relative to 2010, equivalent to 24-26% in real terms. By 2015 the reduction will have reached 29% (24% in Scotland). By 2013 budgets, the actual real reduction was 18% in real terms.
  • Spending power cuts are slightly greater in London and slightly less in shire areas, but with wide variation between individual authorities. There is a clear relationship of greater cuts with greater deprivation across most classes of authority and most services. Relationships with political control of council are not very clear.
  • The main impacts of the cuts, and the differences in impact between different types of area, are driven by cutbacks in what were specific grants up to 2010, although there are moderate changes in the needs aspect of the Formula Grant at work as well.
  • The services seeing the greatest cutbacks are education support, partly due to academies programme, transport and cultural services, and planning, with smaller cuts in social care and housing.
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