CUTS AND CONTEMPT Experiences of austerity and council democracy in Newham REPORT SUMMARY
Local government is in crisis. With up to 40% reduction in funding from central government since 2010, councils are struggling to meet their legal obligations to deliver services to residents. A recent survey suggested that officials in 80% of councils fear for their financial sustainability. Over 90% of councils in England plan to raise council tax and increase charging for services in 2018.1 There is significant uncertainty as to how local government will be financed post 2020, when nearly half of all councils will stop receiving funds from the government altogether.2 To add to the comprehensive figures that show councils’ financial distress, we set out to document residents’ lived experience of austerity in one of London’s poorest boroughs. We asked Newham residents about their experiences interacting with a range of council services, their views on council accountability and to what extent they felt their opinions were heard in local decision-making.
Why we undertook this study This report is part of evidence collection for a citizen debt audit that seeks to evaluate the social sustainability of Newham’s debt.
Newham: ranking high on poverty Newham is an East London borough perhaps best known for hosting the London 2012 Olympic Games. It is one of the poorest boroughs in London with: • • •
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A poverty rate of 37%, second highest in London 3 The highest proportion of low-paid workers 4 Average household income before housing costs 71% of the national average 5 Over 43% of children growing up in poverty 6 The highest number of people housed outside the borough and in temporary accommodation in London 7 One in 25 residents homeless 8
Despite these pressures on its population, since 2010, Newham has cut spending on council services by 31%. 9
The aim of a citizen debt audit is to improve the accountability and transparency of local government towards its residents in managing funds in the public interest. It will examine the financial sustainability, legality and legitimacy of the local authority’s debts, especially where interest repayments “We’re a bit stretched – are preventing the many people here have council from meeting its not got much money, obligation to provide a council should listen to duty of care to residents people who have lived here long. There’s been and universal access to more cuts and changes services. in the last 10 years.” For the study, we interviewed 51 residents in different locations in Newham, mainly in the vicinity of council services. A description of our methodology is included in the forthcoming full report. Despite having cut total “Council says lack of service spending by money in everything you ask for, which is £129m in the last seven wearing a bit thin.” 10 years, Newham council is paying out millions of pounds in additional interest payments to banks that sold them LOBO loans. In 2016/17, Newham’s expenditure on “interest and similar charges”, which includes an impaired Olympic Stadium loan, was over £83m - equivalent to 125% of what it collects locally in council tax.
What we found When interviewing residents, we found that only a third felt that their needs were being met by the council. Half had experienced cuts in services they used, and everyone was aware that cuts were happening. Most respondents did not think the council’s spending priorities reflected their “Staff did not want to needs, and many voiced understand and resolve their frustration on vanity my problem, it felt like projects or cosmetic a box ticking exercise.” improvements such as the Olympic developments, whilst they felt that the most pressing needs of residents, such as housing, education and support for those who are struggling, were neglected. The strength of residents’ feelings raises serious questions about the fairness of continued, ring-fenced interest payment expenditure to the financial sector.
more services for the youth to help address street crime.
We found that the majority of residents were satisfied with the services they used. This is shows that local government is still an invisible realm of cuts, with relatively small “Housing and number of people using homelessness services council services most are under immense significantly affected. In pressure. The scale of homelessness in 2016/17, 50% of council Newham forces people spending was on social into unacceptable care. 11 However, the housing situations. I stories of those who fear for my family.” feel left out in the cold, sometimes literally, because of lack of council services, should not be overlooked, which is why we have given emphasis in our study to the experiences of those affected by cuts.
Considering the scale of changes in local government since 2010, the failure of Newham Council to inform and consult residents about the cuts is striking. We frequently encountered feelings of contempt and a general lack of accountability. With “I’m unhappy and the removal of central anxious... Because you government funding don’t know the future, of local government you have an idea of (known as the revenue repercussions if you’re left without income support grant) councils and support but you like Newham will move can’t do anything about towards 100% funding it. I’m left with a few via locally raised council pounds a day.” tax and business rates.
Our findings also suggest that the importance people place on council services does not depend on whether they personally use them. Many people value the support networks provided by the council, considering “I would use council important for services more often them community or if there was a change the of circumstances, for because they might instance if I had kids or one day need them lost my job.” themselves. Although our questionnaire did not directly ask about crime and security, it was one of the themes respondents brought up most in the open questions, calling for the council to provide
Most respondents raised the need for better communication from the council: nearly everyone agreed that residents should have a say in how council “It would be nice if money is spent, and there was a newsletter many raised concrete with a pie chart how ideas for how the council money is spent. I think that would make could engage people, it more accountable such as publications, because you could leafleting, open meetings, see where the money participation days and goes. There could be participatory budgeting. an annual meet-up with citizens to say this is Many respondents what we’ve done, make wished it was easier it more participatory to meet their elected and involve people in decision-making.” representatives.
There is a clear onus on the council to explain in simple language how it spends public money and to consult more widely on changes. At the moment, residents do not have an accurate picture of how the council spends public money. People who have lived in multiple London boroughs or work in other boroughs are able to compare service levels across councils, often finding significant variation. Benchmarking of public service provision across London councils in a way which is accessible to residents could help identify areas of neglect and spread best practice.
Our full report will be published in April.
Policy Notes recommendations
1. https://www.lgiu.org.uk/report/lgiu-mj-state-oflocal-government-finance-survey/
1. Provide clearer information and real opportunities for residents to have a say on issues that affect them. Residents need to be given better information about what the council does and how it spends public money, as well as real opportunities to influence financial decision-making. Expecting residents to seek out opportunities to participate in consultations is unrealistic, and consultations should be brought to where people are. 2. Ensure better integration of services, especially those related to mental health. Mental health problems affect every aspect of people’s lives and cannot be treated in isolation. This is true especially for those who are experiencing poverty, difficult housing situations and unemployment. Mental health support should be integrated with these services. 3. Stop cuts to youth services. Many Newham residents feel unsafe in their borough due to increased crime and voice concerns over the presence of young people on the streets. More spaces and activities would provide the youth with meaningful things to do, keeping them away from crime. 4. Better identify individuals who are at risk due to cuts. Despite widespread satisfaction with council services, there is a segment of the population that is at significant risk of marginalisation, poverty and mental health due to the pressure cuts put on council services. 5. Monitor council service provision more efficiently to avoid neglect and inaction. Benchmarking of public service provision across London could help monitor the quality of the services that councils provide for their residents and help to spread best practice.
2. https://www.local.gov.uk/about/news/councilfunding-be-further-cut-half-over-next-two-yearslga-warns 3. https://www.trustforlondon.org.uk/data/boroughs/ newham-poverty-and-inequality-indicators/ 4. https://www.trustforlondon.org.uk/data/boroughs/ newham-poverty-and-inequality-indicators/ 5. http://eprints.lse.ac.uk/58039/ 6. http://www.newhamrecorder.co.uk/news/httpwww-newhamrecorder-co-uk-news-newhamhas-the-highest-level-of-child-poverty-inlondon-1-5379763-1-5379763 7. https://www.trustforlondon.org.uk/data/temporaryaccommodation-borough/ 8. ttp://www.itv.com/news/london/2017-11-08/ homeless-rates-grow-to-1-in-25-in-parts-oflondon-as-total-uk-figure-outstrips-population-ofnewcastle/ 9. https://www.ifs.org.uk/publications/8780 10. https://www.ifs.org.uk/publications/8780 11. https://www.local.gov.uk/sites/default/files/ documents/A4%20STATIC%20IMAGE_04_1.pdf
Photo credits: Annie Theby, Fanny Malinen
Published in March 2018 by Research for Action.
Research for Action is a workers’ co-operative that produces research to support social, economic and environmental justice. Through in-depth investigations into vested interests and corporate power as well as researching alternative economic models, Research for Action produces informative, reliable and accessible material for the general public, the media, civil society and grassroots organisations to help strengthen their activities in bringing about long lasting change. @Research_Act www.researchforaction.uk info@researchforaction.uk