The Lloyds Bank Foundation for England and Wales has today warned of a “quiet crisis” in local government funding, placing more pressure on charities.
It commissioned the research because the local charities it funds “tell us every day of the increasing pressure on their communities” and that charities are “left to pick up the pieces”.
A Quiet Crisis: Local Government Spending on Disadvantage, by the New Policy Institute (NPI) for Lloyds Bank Foundation for England and Wales, looks at official data on local government spending in England on a range of services for adults and children facing disadvantage.
The research found that councils had moved away from preventative spending and that areas with higher levels of disadvantage were most affected.
It also found there is “great variation” in spending on different types of disadvantage
Councils have faced significant cuts to their own funding since 2010, but the research suggests that most have tried to protect vulnerable people. Overall there has been an 8 per cent decline in local government spending but spending on disadvantaged groups has fallen by 2 per cent.
However the report said that there had been an increase in demand for some services.
Local authorities are a significant funder of the voluntary sector. According to the latest NCVO Almanac figures, for the 2015/16 financial year sector income from local government reached £7.5bn, overtaking income from central government for the first time since 2004/05.
‘Worst could be yet to come’
Paul Streets, chief executive of the Lloyds Bank Foundation, said: “This research uncovers the quiet crisis that even well-run local authorities are facing up and down the country in trying to fund services for disadvantaged adults and children, a crisis for which the worst may be yet to come.”
He added that councils are approaching the “tipping point” and that: “Local charities are doing their best to help councils pick up the pieces but as a country, we can and must do better than this. The government needs urgently to look again at how it funds local councils to enable them to provide and fund services for those who need it the most, regardless of where they live.”
The research calls for a “change of direction” and an “urgent debate” about future funding for local councils.