The House of Commons Library has published a briefing paper examining changes in local-authority grant funding, spending power and spending per person.
The figures for Northumberland show that the real-terms government grant to the county council was £125.82million in 2015-16, but it has dropped every year since, with the current year’s grant just £84.02million and next year’s set to fall further to £75.7million – a five-year change of -39.84 per cent.
However, the analysis makes clear that local authorities vary in the amount of money they raise and retain in taxation, business rates and other forms of income and ‘it is therefore something more useful to look at their spending power, which takes these into account’.
On this measure, the five-year forecast still shows a decrease, but of just 3.91 per cent, from £277.52million in 2015-16 to £269.61million this year and £266.66million next year.
There were also small increases in spending power in the previous two years, although not enough to take the figure back near 2015-16 levels.
In terms of what the council has actually spent, this has dropped from £614.09million in 2010-11 to £540.28million last year, although this was a slight rise compared to 2016-17 and there was a small uplift in 2013-14.
When you look at the real-terms figures (based on 2017-18 prices), the fall is more stark – from £686.13million down to £540.28million – with every year showing a decrease compared to the one before.
These figures include ring-fenced grants for the likes of schools and public health, which is why they are much higher than the spending-power data above.
Looking at the national picture, the paper reports that inner London boroughs receive more grant funding per person from central government than any other type of local authority, while shire counties and the districts within them receive the least.
However, once again, these variations are considerably reduced when looking at the local authorities’ core spending power, which takes into account the amounts of money that each authority can raise on its own behalf.
On average in England, both grant funding and spending power have decreased in every year from 2010-11 to 2015-16, and grant funding is projected to continue to decrease until at least 2019-20.
Local authorities mostly spend their resources on education services and adult and children’s social care – these three areas together made up well over half of local-government spending in 2017-18, much of it as part of ring-fenced grants.
Ben O'Connell, Local Democracy Reporting Service