Better Health For All

The government has announced a consultation on its future proposals for local government funding and our analysis shows that these proposals would take more money from poorer local authorities and give it to richer ones – widening social and health inequalities. If we are going to address the huge inequalities this country faces we must allocate a greater share of local government funding to areas that have been economically ‘left behind’.

The proposals, currently out to consultation until 21 February 2019, are for new funding formulae that will be used to assess how much funding each local authority needs to provide essential services. Under the proposals a new “foundation” formula will determine the share of funding that each council receives for services to improve the environment in which people live (e.g. parks) , housing and preventing homelessness, leisure facilities (e.g. swimming pools, libraries), culture (e.g. museums) and planning as well as community and economic development.

Extensive research has shown that these services have a major impact on people’s health and that greater investment in these is needed in more disadvantaged communities who have poorer health, if we are to address the huge and widening health divide that blights this country. These foundation services – largely provided by district councils, are the foundation for good health. Indeed, the current formula, adjusts for levels of socioeconomic deprivation allocating 20% more resources per head to disadvantaged local authorities to provide these services. But the government’s new proposal is that differences in need should not be taken into account in the future. Rather they propose that each council in England should receive the same funding per head for these foundation services, regardless of differences in need.

In England there is a long history of allocating local government and NHS resources to local areas based on an objective assessment of their needs. This has led to more resources for these services going to the poorest areas with the greatest needs, which we have shown has resulted in a narrower gap in health between these areas and the rest of the country than would otherwise be the case. The government’s proposals would bring this to an end for these council services. If implemented today, figure 1 shows that the new allocation formula would lead to the most deprived 20% (quintile) of councils losing £35 per head per year – a total of 390 million per year, whilst the most affluent 20% of councils would gain £24 per head – a total of 260 million per year. (Click here for an interactive map showing the impact for each council.)

Assessing differences in needs between areas is complicated, and the consultation document is highly technical, the serious implications of these proposals therefore, could easily have been missed. The standard practice used for assessing differences in need is to investigate the factors that are associated with differences in historical spending per capita between places and to use these as a proxy for need. One of the key predictors of need is the level of socioeconomic deprivation in an area, an indicator which is well developed and established in England for use in resource allocation and public health needs assessment.

But the consultation erroneously justifies not including socioeconomic deprivation as a measure of need for these foundation services by claiming that it only explains 4% of the variation in historical spend on these services. This is based on a flawed analysis that investigates predictors of total spend, rather than per capita spend, as would be standard practice. In fact, using the correct analysis, socioeconomic deprivation is a very strong determinant of variation in historical per head spend on foundation services. Using 2016 data – we show that social and economic deprivation explains 16% of differences in spending per head on foundation services. Even this is an underestimate of how much deprivation is a driver of need for these services, as the budget has been severely cut during recent years due to the government’s austerity programme. These cuts have been far more severe in deprived areas than in more affluent areas, leading to significant unmet needs in the most deprived areas. Figure 2 shows that since 2009 the poorest councils have lost on average £160 per head for these foundation services, whilst the richest councils have lost £50 per head.

A better estimate of the extent that deprivation predicts need for foundation services would be to use data from 2009 before these cuts were applied. On this basis deprivation explains 40% of the differences in spend per head between councils of these foundation services. In other words we estimate that deprivation is a 10 fold greater driver of need for these foundation services than has been estimated in the government’s consultation document. Figure 2 (below) shows that applying a formula that took into account this difference in need would allocate an additional £28 per head to the most deprived areas and a reduction of £24 per head for the most affluent 20% of local authorities.

Changes to the way public funds are allocated to the NHS and council areas have consequences for people’s quality and length of life. The new NHS long-term plan has a focus on prevention and addressing health inequalities that is difficult to reconcile with a council funding allocation proposal that will lead to poorer health and bigger inequalities.

Following the cuts in funding to councils in recent years – for the first time on record we are seeing life expectancy declining and infant mortality increasing in the poorest areas, widening health inequalities. To us, as public health experts, these are seriously concerning trends suggestive of something going very wrong with the current system of resource allocation. These trends have reversed progress that had been made to decrease inequalities between 2000 and 2010.

Implementing the government’s new proposals would further fuel these adverse trends, ending the tradition of allocating resources to areas according to need and replacing it with a new, unjust, norm. Even if the overall funding envelope for these services increased in the future, the proposals would mean that poorer councils received a diminishing share of these funds. If further cuts were implemented – it would mean that these cuts would hit poorer councils harder. In a country that is divided, with widening inequalities, these proposals would further cast adrift the health and life chances of people in those areas, who already feel they have been abandoned by government. It’s time to take action on inequality, by ensuring fair funding for local government, increasing investment in the communities that have the greatest needs.

Written by Ben Barr, Senior Clinical Lecturer at University of Liverpool, Professor David Taylor-Robinson, University of Liverpool and Professor Dame Margaret Whitehead, University of Liverpool.