The Price of Austerity in England
Kev Standishday is a personable, middle-aged social worker in the British county of Northamptonshire, a 90-minute drive northwest of London. He dresses casually, his face dominated by a striking white pointed goatee. While Standishday’s specialty is counseling troubled families, these days he works for the public-sector union UNISON, commuting by car to a two-story brick office building from the picturesque village of Little Harrowden, where he lives with his wife and five kids.
There is no secondary school in Little Harrowden, so Kev’s daughter has to take a bus each morning to the nearby town of Kettering. The county ended up in such a mess in the austerity years following the 2008 financial crisis that it had to file for bankruptcy in 2018; as a result, those bus trips are no longer subsidized. So now the Standishdays have to pay £700 a year (nearly $1,000) for the privilege of sending their child to school. The cost hurts.
As a social worker in a cash-strapped county, Kev saw his pay essentially frozen for several years. In a feckless attempt to balance its books, Northamptonshire took thousands of county employees out of national pay-and-conditions contracts, imposing wage freezes, unpaid furloughs, and other cost-saving changes. But that presented new challenges. “We can’t recruit and retain staff,” Kev says, “because conditions are so poor.”
Since 2010, UNISON estimates, the cost of living has increased by 27.6 percent. During that time, however, county employees received only 5.5 percent in wage increases, translating into a huge decline in living standards for workers who weren’t paid much to begin with. Kev says a teaching assistant in the county these days tops out at about £14,000 ($18,000) per year. As a result, there’s been a brain drain, with qualified people moving to higher-wage locales.
Unlike the United States, Britain doesn’t have a constitutionally delineated federal system that delegates powerful legislative, tax-raising, and regulatory powers to local authorities. Instead, it depends on a largely informal division of duties.
“British local government is a hodgepodge of centuries’ worth of development,” explains Ashley Walsh, head of policy and research for the nonpartisan High Pay Centre. While Parliament funds the National Health Service and the education system, other services—such as those for the mentally ill, as well as programs for foster children, drug-treatment centers, and local transport and road maintenance—fall on the counties or, in the larger urban areas, on city councils. The cities tend to be controlled by the Labour Party; most of the counties are Conservative.
Unlike American states, British counties cannot impose their own income or sales tax. Instead, they rely on what is called a council tax, which is levied on properties. Depending on the value, property owners fall within one of eight bands. The money raised from this tax, however, has never been sufficient to fully fund council services; as a result, these tiers of government are largely reliant on Parliament’s largesse.
In 2010, British Prime Minister David Cameron came to power as the head of a Conservative–Liberal Democrat coalition. It was two years after the global financial crisis had erupted, and the outgoing Labour government—which had spent heavily to shore up social services before 2008, and even more aggressively to protect the banking system during the crisis—was being widely criticized for ballooning the national deficit. As a result, Cameron’s government committed itself to a harsh austerity program.
“It’s been a period in which government has cut its costs to meet its new realities post–financial crisis,” says Matthew Whittaker of the Resolution Foundation, a London-based think tank focused on policy issues affecting low- and middle-income people. Government spending per person as a share of GDP, he adds, has “been on a downward trajectory for much of the last decade.” From 2009–10 to today, the foundation estimates, spending on day-to-day public services has fallen by 9 percent. As a percentage of GDP, such government spending has fallen by 23 percent, from a high in the year immediately after the crisis of 22 percent. In October of last year, Resolution issued a report predicting that even with the recent mild easing of austerity, by 2022 that number would decline to 14 percent.
Despite widespread complaints about the underfunding of the National Health Service, over the past few years government spending on the NHS has actually risen by billions of pounds annually. Thus, to achieve its desired rollback in state spending, the Tory government went after a huge array of “discretionary” programs, eviscerating the welfare system. Resolution estimates that since 2010, per-person spending on housing and communities has decreased by 55 percent, and spending on transport by a whopping 77 percent. Rubbing salt into the wound, the grants given to local governments cratered by roughly 60 percent, meaning that counties also had no choice but to cut services, too.
In response, some counties got creative and started to invest in local shopping malls, office complexes, and other real-estate ventures, looking to partner with international investors in regional-development schemes. Others pushed through incremental increases in their council taxes. But all had to implement punishing cuts.
Northamptonshire’s strategy was centered on a project called Next Generation, which aimed to outsource virtually all government services, essentially turning thousands of county employees into insecure contract workers for private companies. But there was no functioning oversight of the contracts signed with companies, resulting in vastly inflated costs for the provision of vastly inferior services.
Northamptonshire became, says social worker and local UNISON official Alvarez “Wilky” Wilkinson, “an Easy Jet council” (a reference to the low-cost airline that provides basic services but charges for everything else), where everything was contracted out for short-term gain.
Making a bad fiscal situation worse, the council also embraced a vanity project, spending a startling £53 million on an entirely unnecessary new glass-fronted county hall.
The negative consequences of this fiscal mismanagement spiraled. To take just one example: One young man in the county was eligible for welfare benefits, but to get them he had to fill out paperwork at the job center in the town of Peterborough. However, the regular bus service for his village had been cut and replaced by a “dial-up bus,” forcing applicants to phone the company to be picked up. This new service was available on a first-come, first-served basis; when the man couldn’t get a bus ride into town, he lost access to his benefits.
Then there were the food banks, which saw a staggering increase in usage, from 41,000 at the onset of the austerity budgets to 1.2 million in 2016–17, as impoverished residents found their benefits cut off. There was also a spike in gang activity in poor towns and neighborhoods—a problem that Wilky, who works with at-risk youth, attributed to the shuttering of so many youth programs. “In the past fortnight, we’ve had two stabbings in Northampton—one a murder. That’s not normal times,” he tells me. Eight people have been arrested, five of whom are teens.
Linda McFarlane, a local resident with an array of physical and mental-health challenges, lost her social-services grant because the county increased her co-pay and she couldn’t afford the higher rate. With her support system no longer in place, she let her apartment slide into disrepair and, on her 40th birthday, was evicted. McFarlane ended up homeless and living in a tent in the woods. Finally, caseworkers from a local shelter-cum-assisted-living-facility rescued her. “To get that first shower after four weeks of being on the streets was heaven,” McFarlane recalls. “Clean clothes… They gave me a coat.” Yet the homeless shelter itself has not been immune to county cuts. Its security grant has been reduced, and its outreach services now have to raise money from private sources.
Wherever one looks in Northamptonshire, county services have hit the skids. Virtually all discretionary services (those not required under law) have been eliminated. Transport subsidies, eviscerated. Library services, slashed—the beautiful Victorian-era library in the center of Northampton, for example, stopped buying new books, fired most of its staff, and eliminated its public toilet. Grants to the arts, slashed. Support programs for teenage parents, redlined out of budgets. Elder-care systems, largely destroyed. Early-warning monitoring systems for at-risk children and assistance programs for domestic-violence victims, left to languish. Home-aid services to the disabled, massively reduced. Grants to assist unaccompanied asylum-seeking children, imperiled. And so on.
All told, somewhere between £300 and £400 million in cuts were implemented in Northamptonshire after 2010. “The resources are no longer there,” says Paul Crofts, a campaigner with the group Save Northants Services. “They’ve been chopped. Young people become collateral damage in these austerity cuts.”
A half-hour’s drive west of Northampton, in the village of Daventry, a severely disabled man, John Smith, reports that he now has to wait longer for everything, from the installation of a new shower chair to increases to his disability grant that would allow him to pay his home help the legal hourly rate. Smith, 53, is a disability-rights advocate with Disabled People Against the Cuts (DPAC). On the frame of his wheelchair is a sticker: “Your cuts kill.”
“We’ve had cuts in social-care support,” he says, sitting in his living room with his two black cats, Nessa and Elfie, curled on cushions nearby. Whereas, in the past, the goal was to maximize disabled residents’ independence, in the wake of the cuts “people exist on minimal support now—help to get up in the morning, if they’re lucky; to wash; to go to bed.” What’s no longer in the mix, he says, is a concerted effort to keep the disabled from falling into profound social isolation.
The number of hours the county council paid for his home help was slashed, and the day-care centers in which disabled people could socialize have been shuttered. Smith says he has friends who couldn’t get timely help in the evenings and ended up sleeping in their wheelchairs; others who need assistance getting up in the middle of the night to go to the bathroom have been told they no longer qualify for 24/7 care and should use adult diapers.
Many of the services that the county councils fund are vital for marginalized communities, but they largely go unnoticed by the broader public. As a result, during times of austerity, Conservative-controlled counties have managed to slash these services without taking a political hit from the more affluent majority of their electorate. Such is the case in Northamptonshire, where poor residents have seen unprecedented cuts—yet the Conservatives were re-elected two years ago, boasting in their manifesto that they had kept the council tax lower than anywhere else in the country.
This has also been the case with several other counties, including Cambridgeshire and Somerset, which, while not in bankruptcy, have also experienced extraordinary fiscal uncertainty over the past five years. In July 2018, says journalist Daniel Mumby, who covers county finances as part of the Local Democracy Reporting Service, an internal audit found that Somerset was likely to head into bankruptcy by 2021. In response, everything from road-gritting in the winter to children’s and elder-care services were reduced.
In Somerset, as in Northamptonshire, the electorate’s affluent majority has remained solidly Tory. In fact, says Paul Crofts, before 2017, “Northamptonshire Tories actually boasted they were a pioneering authority. I think they were given a green light. It was a neoliberal project.”
By the end of 2017, however, the financial hole was too large to ignore. Northamptonshire became the first British county in two decades to go bankrupt, filing what is called Section 114 paperwork.
Suddenly, everyone disavowed the council. The central government sent in highly paid auditors who wrote up scathing reports and recommended creating two new “unitary councils” to merge district and county responsibilities; doing so, it was hoped, would dilute the county’s incompetence. The local members of Parliament, all hard-line Conservatives, were stinging in their criticism of the council. Next Generation was shelved.
The council leaders were ousted in an internal party coup after some 20 Tory councilors wrote a public letter urging their removal. According to Victoria Perry, one of the rebels: “No one really understood what [Next Generation] was, except a massive outsourcing project, which cost us £60 million and achieved nothing.” In the wake of the rebellion, a new leader, Matt Gollby, was elected to steward a more sustainable budget. “The leadership was changed, and we move on,” Perry says, perhaps a touch optimistically.
Most humiliating of all, at least for the council leaders, Northamptonshire was forced to sell off its new county hall—and then lease it back on a 35-year-contract. The cash that the council raised by doing so would in normal times have had to be reinvested in capital projects; instead, the central government, in a special waiver, allowed the council to use it to temporarily plug its budget holes. And finally, after years of refusing to raise the council tax incrementally, the Tory-dominated body was forced to introduce a 5 percent increase all in a rush—thus further cash-strapping residents already suffering from pay freezes and service cuts. For Labour councilmember Danielle Stone, this all but guarantees “the impoverishment of our families and communities.”
Recently, Northamptonshire has managed to stabilize its financial condition. But it has done so by accepting as a new normal the appallingly low level of services ushered in over the past nine years. At the end of February, the anti-tax Tory council passed a budget for the upcoming fiscal year. It had managed to balance the books, but over outraged protests from the Labour and Liberal Democrat councilors, it did so without including a pay raise for the thousands of county staff members who have seen their paychecks erode so hugely. Nor did it restore most of the cut services.
Stone stood up in the council chambers to argue that “on every single well-being indicator, our county is failing,” with declining educational achievements and growing levels of hunger and homelessness. She also challenged her Tory colleagues on their decision not to grant pay increases: “You’re joking, aren’t you, if you say we can’t afford it? We can’t not afford it. What really gets me is the unfairness of what’s going on.”
For Hester Gallen, who lives with her 7-year-old twin daughters in the small village of Hartwell—the only place where she can afford the rent—and commutes to her job at a drug-treatment center in Northampton, this means ongoing insecurity about her bus route to work. Her village is connected by a subsidized bus that goes from the town of Milton Keynes, in the south, through Hartwell to Northampton.
Gallen—with her two daughters, dressed as wizards, in tow—went to the council’s budget meeting along with a few other protesters. “Our route has been spared temporarily, compared to some that have been cut entirely,” she said, explaining how, after she and some neighbors launched a save-our-buses campaign, Milton Keynes’s district council ponied up the cash, while Northamptonshire balked. But she knows that the £27,000 operating subsidy could easily disappear. And if it does, she will be isolated in Hartwell.
In the mid-17th century, a local chapter of the Diggers, an early communalist organization that campaigned for redress for the poor, set up shop in the county, holding a series of meetings in Bareshanks field, outside Northampton. The nine founding members of the chapter signed a declaration denouncing those who “withhold the Corn (or the Land) from the poor, which the people shall curse.” Not long after, the local justice of the peace shut the chapter down. Almost 370 years later, antipoverty activists are once again decrying the actions of local leaders.
“We had to turn away 150 families last year because we didn’t have any spaces,” says Ann Bodsworth, who runs the increasingly underfunded Domestic Violence Services/Women’s Aid program for the county. “Our local authority has failed to make monetary provision available. They are failing to see the problems under their noses.”