Early intervention under threat as biggest cuts strike deprived areas

Cuts to council funding continue to disproportionately batter the most deprived areas in England, analysis by CYP Now has revealed.

The local government funding settlement for 2013/14, announced last month, brought in average cuts to local authority funding of 1.7 per cent.

That figure is lower than in previous years, but disguises within it a hefty cut to the Early Intervention Grant, which becomes rolled into the overall settlement, so the amounts are indicative allocations to guide councils.

After factoring in money to extend the free childcare entitlement to two-year-olds and a £150m withdrawal of funds by central government, the grant will be reduced by 11 per cent on a like-for-like basis, from £1.919bn in 2012/13 to £1.709bn in 2013/14.

But rather than sharing the pain equally, the least affluent areas are faring worst. As our table shows, eight of the 10 most deprived areas have received the maximum Early Intervention Grant cut possible, which the government has capped at 13 per cent.

Bearing the burden
Conversely, nine of the 10 least deprived authorities in England have received the lowest cut possible - 8.7 per cent. In total, 71 authorities were handed the maximum reduction of 13 per cent, with 55 receiving the minimum of 8.7 per cent, and the remaining 26 authorities somewhere between the two extremes.

The latest cuts exacerbate a trend of deprived areas bearing the brunt of local government cuts. Calculations by CYP Now show that the most deprived areas have been on the receiving end of deeper cuts to their grant since it was introduced in 2011/12. Hackney - the most deprived authority in England - has seen the level of its grant drop by more than a quarter (26.7 per cent) during that time. Over the same period, the least deprived area, Wokingham, has seen its grant value decrease by less than a fifth (19.3 per cent). Indeed, nine out of the 10 least deprived authorities have received grant cuts of around 19 per cent, compared to all 10 of the most deprived facing cuts of more than 25 per cent over the same period.

The trend is mirrored by decreases in the overall "spending power" of councils over four financial years.

Although reductions in spending power among top-tier authorities do not exceed 2.7 per cent this year, comparison with figures from 2010/11 lay bare the cumulative impact of cuts.

Since then, three of the most deprived local authorities - Newham, Manchester and Liverpool - have suffered double-digit spending power cuts. By contrast, three of the most affluent local authorities - Richmond, Surrey and Buckinghamshire - have actually seen their spending power increase.

Alison Garnham, chief executive of the Child Poverty Action Group (CPAG), says: "It is deeply worrying to see such wide disparities between the richest and poorest areas." She points out that levels of need are increasing at a faster rate in deprived areas, which are home to more people who are struggling with the impact of benefit cuts.

"If anything, we should be seeing increased investment in the poorest areas if we hope to make any difference to the lives of children living in poverty," she says. "Low-paid families and children living in poverty are the ones most likely to be experiencing the £28bn in benefit cuts already. We urgently need some review of what's happening."