Will Northamptonshire be the last council to go bankrupt? We’ve crunched the numbers

Birmingham Town Hall. Image: Very Quiet/Wikipedia Commons.

In two months’ time the UK will hit the 8th anniversary of the Conservative’s austerity programme – an economic strategy that has survived three elections, two Prime Ministers, and several missed deficit elimination deadlines.

Much of that burden has fallen on England’s councils. In early March, the National Audit Office released a report which showed that government funding for local authorities has dropped by 49 per cent in real-terms since 2010, resulting in a 29 per cent drop in spending power.

Since austerity began, councils have been protesting the squeeze in funding from central government – and in February, the first domino finally fell.  By enforcing a section 114 notice, Northamptonshire County Council became the first local authority in over 20 years to effectively declare itself bankrupt, banning all new expenditure in order to hit its legally required balanced budget.  Now, the question may not be if more councils may follow suit, but when.

Austerity may not be on everybody’s lips anymore, but its effects are still rippling throughout the country. Future reductions in funding have led the Local Government Association to project an overall spending gap of over £5bn by 2020, meaning councils will be scrambling to cut costs and generate additional income in order to fulfil their services. Rob Whiteman, chief executive of the Chartered Institute of Public Finance and Accountancy, has given a bleak warning: “Through my own conversations with chief financial officers, I have heard a number of warnings that councils may soon face untenable budget positions…The warning signs have been plain to see for a number of years.”

Future cuts come at a time when council services face enormous demographic pressures resulting in increased demand. There were 1.8m new requests for adult social care in 2015-16. Meanwhile 23.1 per cent of children are expected to be living in absolute poverty by the end of the decade, a rise from 17 per cent in 2009.

Without an increase in funding, it is difficult to see how councils will be able to meet these demands. Both the adult social care and children’s services departments take up huge portions of a council’s yearly budget. Research from the Bureau of Investigative Journalism has found that over 100 councils in England are known to have overspent on their Children’s Services budget this year. Add to the mix the slowdown in projected GDP growth, due to the uncertainty surrounding Brexit, and councils are facing a difficult task to cover financial gaps in their medium term financial planning.

So how big is the gap? The effect on some of England’s cities is as follows:

  • Manchester City Council identified a funding gap of £60m between 2017 and 2020, due to be eliminated through savings, a large part coming out of the adult social care budget.
  • Liverpool has identified a budget gap of £90.3m up to 2020, proposing more cuts which will help bring its overall budget savings to £420m between 2011 and 2020.
  • Bristol has identified a £46.7m gap which will require further savings on top of £33m in cuts this year.
  • Birmingham has already accumulated budget savings of nearly £650m since 2010. and has identified a further £123m in cost-cutting measures needed by 2022. The city’s financial report warned, "Consequently Birmingham City Council of the future will look very different from the one we had before austerity began." Worryingly, the council arrived at this figure after taking into account a plunge into budget reserves by £30m next year, and has admitted that future savings are becoming harder and harder to identify. Most ominously of all, the report announced, "the City Council has also had to consider whether, in some instances, it can no longer afford to provide its current level of service."

The problem is not just isolated to England: the devolved governments also have councils struggling to balance future budgets. Cardiff City Council is facing a £73.5m gap between 2018 and 2021, to be partially offset by £52m in savings. Edinburgh has identified £151m in savings to be found by 2023.

Then we come to Leeds City Council. In July last year the council produced a report projecting a £30.5m spending gap between 2019 and 2021. After planning future council tax increases up to the maximum cap limit, as well as millions in savings, the council stated: “At this stage it has not been possible to identify sufficient savings or income generation opportunities with which to entirely close the gap in the Council’s finances over the next three years.”

Since then, the Council has not come up with any fresh ideas, and the gap has more than doubled. It now stands at £71.9m.  A Leeds Council spokesperson said:

“We are absolutely committed to protecting frontline services, particularly for those who need our support most. To balance those burgeoning costs, we continue to look at ways to make the most of our limited funds and our investment in staff.  

“By targeting resources at preventative services, the council has ensured that the impact of changing demand and demography (which has resulted in significant cost pressures in many other councils) has been contained, for instance within children’s services and adult social care.”

It is worth noting that the council has managed to keep every single children’s centre in Leeds operating, with a commitment to carry on with no closures. That comes in stark contrast to the national picture: over 500 centres have closed in the UK since 2010.


In facing these budget pressures, one alarming trend has emerged: the NAO revealed that one in 10 local authorities could run out of reserves within the next three years, after dipping into their reserves to cover spending. In response, Meg Hillier, MP for Hackney South & Shoreditch and chair of the Public Accounts Committee, said many councils were relying on “rainy day funds” to pay for vital services. The Bureau of Investigative Journalism also found that 22 councils had reduced these reserves by more than 50 per cent in the last five years.

As well as dipping into reserves, councils also have to come up with ways to increase their income. Last month the LGiU found that 95 per cent of councils were hiking council tax, and 93 per cent were raising charges.

Whether these changes will be enough to prove Northamptonshire to be an isolated case remains to be seen. But for now, the warning signs could not be clearer.

Reporting on this story was aided by The Bureau of Investigative Journalism.

Nathan Fogg is a freelance investigative journalist.

 
 
 
 

How can cities become more bike friendly? The Netherlands offers useful lessons

(Aurore Belot/AFP via Getty Images)

It might seem like cycling is in the DNA of the Netherlands, a country where even the prime minister takes his bicycle to work. But the Dutch haven’t always lived as one with their bikes. In the Amsterdam of the early 1970s, cars were considered the wave of the future. They can be seen filling up squares and streets in historical photographs, and killed an average of over two Amsterdammers per week, including many children.

It is nothing more than an “accident of history” that the Netherlands embraced cycling, says Marco te Brömmelstoet, the director of the Urban Cycling Institute in Amsterdam and a man better known as the city’s cycling professor. Today’s bike rider’s paradise was created after parents and activists took to the streets to protest “child murder” by car. A Saudi oil embargo, rising gas prices, concerns about pollution and anger about the destruction of entire neighbourhoods to build motorways did the rest. 


Amsterdam, 1958. Not a cyclist's paradise. (Keystone/Getty Images)

What’s important about this history is that it can be replicated in other cities, too. Of course, the Netherlands has certain advantages – it’s flat as a pancake, for example. But in the eyes of traffic reformers, the rise of e-bikes (and even cargo bikes) means there’s no excuse for prioritising cars everywhere. 

So how can cities, flat or not, follow Amsterdam’s path to creating places where cycling is a pleasant, safe and common way to get around? The Dutch have some tips. 

Separate bikes from car traffic

Any city could start painting dedicated bike lanes on the streets. But in the Netherlands, those white marks indicating space for cyclists are considered just a minor first step. 

“A line on the road is not enough. Motorists will ignore it,” says Frans Jan van Rossem, a civil servant specialising in cycling policy in Utrecht. If other cities want their residents to choose bikes instead of cars when dodging pandemic-era public transport, protecting them from fast-moving car traffic must be the priority, Van Rossem says. 

The Dutch research institute CROW developed a widely praised design manual for bicycle infrastructure, full of tips for creating these protected lanes: A row of vertical white posts or a curb can serve as a physical separator, for example. Still, cyclists tend to feel safest in a "solitary" path, separated from the road by grass, trees, or an elevated concrete island. 

“The main bottleneck, the main reason why people don’t cycle, is that they don’t feel safe,” Van Rossem notes. “To start, construct separate paths.”

Turn those bike paths into a network

Many cities may have some bike lanes on some streets, but leave cyclists to roll the dice everywhere else. Will conditions still be safe when they turn left or right? Often they have to continue their way without any protected facilities for cyclists. 

“In many cases, cities take fast action, without thinking it through very well,” says Lucas Harms. He leads the Dutch Cycling Embassy, a partnership between the Dutch government and several companies, which promotes Dutch bike knowhow globally. “Don’t build small pieces of bike lane from nothing to nowhere. Think about a network of cycling infrastructure.” 

Utrecht aims to have cyclists within 200 to 300 metres of a connected path anywhere in the city, Van Rossem says. Avoid constructing those paths in sketchy industrial areas, he warns. “A connection through an unattractive area may be fast, but won’t be used a lot.”

Embrace the ‘fietsstraat’, a street where bikes come first


On some streets, drivers have to give up their privileges. (Rick Nederstigt/AFP via Getty Images)

A peculiar Dutch invention called "fietsstraat" (cycling street) holds strong potential for the rest of the world, Kevin Krizek says. He’s a transportation professor from Colorado who spent three years at Radboud University in Nijmegen. 

On cycling streets, cars are “guests”, restricted by a speed limit of 30 kilometres per hour. Drivers are not allowed to pass, so cyclists comfortably dominate the road. In the Netherlands the fietsstraat is usually paved with red asphalt, to resemble a bike path and notify drivers of their secondary status. But creating a cycling street can be easy. “All you need to do is put signs at intersections,” Krizek says. The effect is revolutionary in his view. Drivers have to give up their privileges, and cyclists can take the lead. 

Some Dutch traffic experts worry the cycling street won’t work if a city doesn’t also have a robust cycling culture. In the Netherlands, drivers are aware of the perils of urban cycling because they too use bicycles. Moreover, Dutch cities use sophisticated “circulation plans” to direct cars away from city centres and residential areas, onto a few main routes. 

Without “calming” traffic this way, the cycling street could be a step too far, Harms says. “In a city like New York, where all roads are equally accessible and full, it’s better to separate bicycles and cars,” he says.

Redesign intersections for cyclists' safety

If cyclists have to cross intersections “at the mercy of the Gods”, you’re not there yet, says Harms. When he travels abroad, he often finds clumsily designed crossings. As soon as cars turn, cyclists may fear for their lives. 

Harms recommends placing physical barriers between cars and bikes in places where they must cross. The Dutch build elevated islands to direct traffic into separate sections. The golden rule: cars wait behind bicycles. That way, drivers can see cyclists clearly at all times. Barriers also force Dutch cyclists to turn left in the safest way possible. They cross the street first and wait for their turn again before making their way left.

“You can create that with simple temporary measures,” Harms says. Planters work fine, for example. “They must be forgiving, though. When someone makes a mistake, you don’t want them to get seriously injured by a flower box’s sharp edge.”

Professor Krizek points out how the Dutch integrated cycling routes into roundabouts. Some are small; some are big and glorious, like the Hovenring between Eindhoven and Veldhoven, where cyclists take a futuristic-looking roundabout lifted above the highway. Most of those traffic circles move high volumes of cars and cyclists through intersections efficiently and safely. For a simpler solution, the Dutch manual suggests guiding cyclists to quieter streets – crossing a block up or down may be safer. “Nobody knows how to do intersections better than the Dutch,” says Krizek. 

Ban cars, or at least discourage them


A man rides down from a three-level bicycle parking garage near Amsterdam's main train station. (Timothy Clary/AFP via Getty Images)

The quickest, most affordable way to make a city more bikeable is to ban cars, says Ria Hilhorst, cycling policy advisor for the City of Amsterdam. It will make streets remarkably safe – and will most likely enrage a significant amount of people. 

Amsterdam doesn’t outlaw cars, but it does deliberately make their owners feel unwelcome in the historic city’s cramped streets. Paid parking is hugely effective, for example. Many car owners decide to avoid paying and use bicycles or public transportation for trips into the city. Utrecht, meanwhile, boasts the world’s largest bicycle parking garage, which provides a dizzying 12,500 parking spots.

To further discourage drivers from entering the city’s heart, Amsterdam will soon remove more than 10,000 car-parking spaces. Strategically placed barriers already make it impossible to cross Amsterdam efficiently by car. “In Amsterdam, it is faster to cross the city on a bike than by car,” Harms says. “That is the result of very conscious policy decisions.”

Communicate the benefits clearly

Shopkeepers always fear they will lose clients when their businesses won’t be directly accessible by car, but that’s a myth, says Harms. “A lot of research concludes that better access for pedestrians and cyclists, making a street more attractive, is an economic boost.”

Try replacing one parking space with a small park, he recommends, and residents will see how it improves their community. Home values will eventually rise in calmer, bike-friendlier neighbourhoods without through traffic, Van Rossem says. Fewer cars mean more room for green spaces, for example.

“I often miss the notion that cycling and walking can contribute a lot to the city. One of the greatest threats to public health is lack of exercise. A more walkable and bikeable city can be part of the solution,” says Ria Hilhorst. “But in many countries, cycling is seen as something for losers. I made it, so I have a car and I’m going to use it, is the idea. 

“Changing this requires political courage. Keep your back straight, and present a vision. What do you gain? Tranquility, fewer emissions, health benefits, traffic safety, less space occupied by vehicles.” 

Again, she points to Amsterdam’s history. “It is possible; we were a car city too.”

Karlijn van Houwelingen is a journalist based in New York City.