Poorer cities have borne the brunt of austerity. Time to fix it, Chancellor

Liverpool, 2008. Image: Getty.

The chief executive of the Centre for Cities on its latest survey of urban Britain.

Before the 2016 referendum the government’s austerity programme was the defining political issue of our age. Over the last 10 years, the public spending reductions implemented following the 2008 financial crisis have radically altered the nature and shape of the state at the national and in particular at the local level.

Until very recently it looked as if this period of austerity was to become the new normal. But in her party conference speech last October the Prime Minister announced that austerity was coming to an end. Whether austerity actually ends only time will tell, but even if it does for the state as a whole, the worry is that for parts of the public sector, and in particular for local government, the austerity story will carry on well into the next decade. 

Local government experienced the deepest cuts by far in the last ten years. While this has made councils more efficient and effective, the sheer scale of the cuts is increasingly impacting on their ability to provide local services to their residents, particularly those most reliant of such services.

Our Cities Outlook 2019 report, released this week, examined this issue in detail and found that nowhere has felt the fiscal pinch of austerity more than cities. Despite being home to around half the population, the country’s 62 biggest cities and towns have shouldered three quarters of all cuts to local government. In cash terms, this is equivalent to a £386 cut for every city dweller over the last decade, compared to just £172 per person living elsewhere.

Poorer northern cities have been hit especially hard. The five cities that saw the biggest falls in spending were located in the North of England, with Barnsley, Liverpool and Doncaster all seeing real-terms cuts of over 30 per cent. Liverpool’s per head spending fall was by far the biggest in the country, equivalent to £816 for everyone living in the city.

Unfortunately for these cities, their weaker local economies meant that they have been less able to absorb the cuts to their central government grant funding by generating income from other means such as raising council tax or increasing fees and charges for services.

This is a problem on many levels. Firstly, there is a question of fairness. The cuts were not intentionally designed to fall harder on poorer cities, but this is the reality of how they played out. As a result there is a moral case for correcting the unintended impact of this approach.

Secondly, on a more strategic level, cities are the economic hubs that drive our national prosperity; their performance is felt far beyond their political boundaries. Therefore cuts to services that help make our cities vibrant and dynamic places to work, live and visit, such as planning and economic development will not only harm them in the long term, it will also hit the country’s prosperity.

How can we address this situation? Yes, more money would go a long way in the poorer cities that have seen the biggest falls in spending; but it is not just a question of cash. There are relatively cost-free measures that the Chancellor should introduce as part of the upcoming Spending Review to empower city leaders to more effectively manage their finances.


First, the current restrictions on what councils can spend funds raised through public charges on should be loosened. Currently, for example, money raised through parking charges can only be spent on transport. Having to spend scarce funding on potentially unnecessary transport initiatives makes little sense to people seeing their libraries and children’s centres closing due to lack of money. The Chancellor should address this in the upcoming Spending Review.

He should also enable councils to set multi-year budgets – where spend and income can vary year on year within the budget period. The current rules force them to set annual balanced budgets which make delivering long-term strategic service reforms and investments in areas such as health, social care, housing and transport very difficult.

The final challenge for cities’ finances will be the hardest to solve: developing a sustainable social care funding strategy. Cities Outlook 2019 found that the growing demand for social care is adding to the squeeze on cities’ finances. A decade ago, just four cities out of the 62 we studied spent the majority of their budget on social care: now, half of them do. It is no coincidence that Barnsley, the city that has seen the largest cut in spending nationally, is also the city that dedicates the largest share of its budget to funding social care in Britain.

Developing a long-term plan for meeting our growing social care demands is crucial to addressing cities’ financial challenges.

Cities are home to 58 per cent of the UK’s high skilled jobs, 60 per cent of new business starts and 62 per cent of the country’s GVA, making them vital to our national success. However a decade of falling spending, particularly in areas deemed “non-essential” such as economic development, planning and skills, has greatly weakened the capacity of cities to support sustainable long-term growth.

The upcoming Spending Review is an opportunity for the Chancellor to address this challenge and allow them to take back control of their finances. It is in all of our interests that he doesn’t miss this opportunity.  

Andrew Carter is Chief Executive of Centre for Cities; you can read its Cities Outlook 2019 report here.

This article previously appeared on our sister site, the New Statesman.

 
 
 
 

Could twin towns bring Britain back together?

An unlikely pair. Image: Wikimedia Commons.

Twin towns: an irrelevant novelty to most of us, a peculiar name on a village’s welcome sign. But could linking one British town to another – a domestic reinterpretation of this long-standing European practice – help bring Britain back together in a time of national crisis?

Born in the aftermath of World War II, town twinning aimed to foster cooperation and solidarity across Europe. Communities entered formal alliances, nurturing friendships and shared histories. Coventry forged links with Dresden and Volgograd, then Stalingrad, marking the devastation faced by their citizens during the war.

The democratisation of Greece, Spain and Portugal during the 1970s led to a new wave of twin towns across Europe, as did the fall of the Soviet Union a decade later. Since its inception, the focus of town twinning has been on uniting people through relationships. It is a testament to the initiative’s success that many of these remain to this day; Coventry recently enjoyed a performance at the city’s cathedral by Volgograd’s children’s choir.

While European relations have improved since the 1940s, unity at home has received less attention. As a result, Britain is riven with deep economic, political, educational and cultural divides. These fault lines are increasingly determined by geography, with a growing gap between our big metropolitan cities and almost everywhere else.

In comparison to other European countries, we face staggering levels of regional inequality; six of the ten poorest regions in northern Europe can been found in the UK. As outlined by Alan Milburn, the government’s former social mobility tsar, “the country seems to be in the grip of a self-reinforcing spiral of ever-growing division. That takes a spatial form, not just a social one.”

These divisions are poisoning our body politic. As Adam Smith argued in The Theory of Moral Sentiments, putting yourself in someone else's shoes is vital for developing a moral compass; in doing so "we conceive ourselves enduring all the same torments, we enter as it were into his body, and become in some measure the same person with him..." But this is difficult when we have little interaction or experience of those with opposing views.

This is increasingly likely in geographically polarised Britain, with the places we live dominated by people who think alike. Our political leaders must commit time and energy to bridging these divides, just as the leaders of Europe did in the aftermath of the Second World War. By forging links between different parts of the country, a new era of domestic town twinning would do just that.


School exchanges between sister towns would offer an opportunity for children to be exposed to places, people and perspectives very different to their own. This would allow future generations to see things from an alternative and opposing perspective. It may also embed from a young age an awareness of the diversity of experiences seen by people across our highly unequal country.

MPs would be encouraged to spend time in their constituency’s sister town. First-hand exposure to voters in a very different part of the country would surely soften the views of even the most entrenched parliamentarian, making for a more civil debate in the Commons. Imagine the good this would do for Parliament today, with Brexit gridlocked because of the unwillingness of MPs to compromise.

In 2016 the Carnegie UK Trust launched its Twin Towns UK programme, a pilot linking twenty towns across the UK to examine how they might develop together. Emerging benefits include a reduction of insularity and a greater awareness of the bigger picture. Its focus was not on bridging economic divides – towns with similar socioeconomic characteristics were twinned – but initial outcomes from the scheme suggest a broader programme of domestic town twinning could have a powerful impact.

Looking further back, Camden has been twinned with Doncaster since the 1980s, a relationship that unionised Camden Town Hall workers forged in a display of solidarity with striking miners during the 1980s. Funds were raised to feed families of striking workers at the pit and Camden locals even drove north to deliver presents at Christmas. Though the relationship appears less active today, it serves as a powerful reminder of twinning’s capacity to bring people from very different places together.

As we prepare for Brexit it’s imperative that we protect existing twin town relationships with our European partners. This is of vital importance when we know sadly many of these are under threat from austerity and gloriously un-PC mayors. But we should look to breathe new life into these traditions too, where possible. Domestic town twinning would do just that: a step towards bringing Britain back together, just as a continent was reunited after the devastation of war.

Ben Glover is a researcher at the think tank Demos.