GLASGOW CALEDONIAN UNIVERSITY
Glasgow School for Business & Society
Spending Cuts: Mitigating Risks for Scotland’s Disadvantaged Communities
EXECUTIVE SUMMARY August 2011
Dr Darinka Asenova, Prof. Stephen Bailey & Claire McCann
Department of Law, Economics, Accounting & Risk
Funded by:
The Joseph Rowntree Foundation
This is an executive summary of the working draft literature review produced as part of the “Spending Cuts: Mitigating risks for Scotland’s disadvantaged communities” research project commissioned by the Joseph Rowntree Foundation. The aim of this research is to determine how local authorities (LAs) can develop risk-mitigation decision-making procedures to better protect vulnerable and disadvantaged groups from severe and ongoing spending cuts in virtually all parts of the public sector during times of austerity. This research will explore Scottish LAs’ use of decision-making criteria, frameworks and priority-setting processes, if any, to determine whether they take sufficient account of the risks faced by the most disadvantaged groups in the reconfiguration of public services. The executive summary will follow.
The UK Government’s ongoing budget cuts are leading to significant challenges to both total public spending and resource allocation across the UK. The ongoing transformation in the public sector’s funding environment has the potential to lead to a reconfiguration of the range and quality of services being delivered.
In Scotland, cuts were delayed by one year as the 2010/11 budgets were already set. Cuts to the Scottish budget in 2011/12 will create real challenges for Scottish local authorities to find cost savings. Given that the reform of social security benefits is not a devolved issue, Scottish local authorities will have little control over such aspects.
Public service reconfiguration can be expected to include service reduction, service closure, service transfer, maintain the status quo, increase service provision or join-up services to achieve savings. In redesigning public services consideration should be given to the impact this may have on increased social risk for vulnerable and disadvantaged groups.
A number of vulnerable and disadvantaged groups have been identified as those most likely to be adversely affected by the public sector spending cuts: young people, people with disabilities and long-term illness, women, homeless, older people, single-parents and ethnic minorities.
Considerable uncertainty exists about the possible outcomes for vulnerable and disadvantaged groups arising from the speed, scale and aggregation of ongoing cuts to public services. This is because of the ‘combined-effect’ of the risk of adverse impacts arising from the aggregation of a reduction and/or complete withdrawal of a number of public services along with changes to social security benefits.
In particular, the short-term focus on immediate cost-savings may ultimately lead to higher costs if cuts exacerbate social inequality. This may have cost implications in the longer-term for unemployment and for the provision of public services such as health and education. The speed, scale and aggregation of these cuts has the potential to increase social risks related to higher unemployment, a decrease in educational attainment, reduced health & well-being, increased alcohol and drug abuse, increased criminal activity etc. in the longer-term.
In colloquial terms, a ‘multiple whammy’ effect may occur where specific individuals fall into multiple disadvantaged groups and where there is a risk that cuts in one area of public services have the potential to exacerbate their vulnerability to cuts in other public services. In other words, the whole effect may be greater than the sum of the individual cuts if they exacerbate each other to magnify adverse social risks.
A reduction in access to services may lead to further social exclusion and ‘inequality exacerbation’ for disadvantaged and vulnerable groups who are significant users of public services. The UK Government’s ongoing austerity measures can be expected to both widen and deepen social disadvantage as vulnerable groups become disadvantaged groups and as already existing disadvantage is exacerbated by spending cuts, tax increases and other austerity measures.
A ‘knock on-effect’ effect may also occur where increased provision of, for example, informal care to substitute for cuts in health and social care impacts disproportionately on women and elderly carers.
The UK Citizens’ Jury highlighted the importance of personal responsibility and consideration of the long-term future of individuals and services. The focus should be on outcomes of public services rather than how they are delivered and there should be a shift to preventative care rather than focusing on demand-led services.
In Scotland, the Christie Commission also focused on prevention of social inequality. Preventative measures to mitigate adverse social risks need to accompany cuts and reconfiguration in the redesign of public service. Local government should prioritise identifying and targeting the underlying causes of inter-generational deprivation and low aspiration.
Increased involvement of the third sector in service delivery is not capable of fully offsetting cuts in UK public services even though its greater participation is seen as highly desirable.
Increased level of risk exposure for service users can result from inadequate service provision or from the substitution of established service providers with casual or inadequately trained providers such as neighbours, relatives etc.
Local authorities are therefore best placed to mitigate the risk of adverse effects on disadvantaged and vulnerable groups to minimize the potential for exacerbation of inequalities. A policy distinction can be made between vulnerable groups and disadvantaged groups. Nevertheless, the terms ‘vulnerable’ and ‘disadvantaged’ are used interchangeably in the policy and practice fields they are not necessarily synonymous.
For risk mitigation purposes, local authorities need to distinguish between groups already disadvantaged and groups at the margins of becoming disadvantaged before they implement their austerity measures. The latter are perhaps most vulnerable in terms of the reduction in the range and quality of services being delivered.
Criteria already exist to aid the decision-making process in resource allocation giving specific consideration to certain groups (e.g. women as part of gender equality audits) and such criteria could be developed to incorporate consideration of vulnerable and disadvantaged groups so as to mitigate their exposure to risk of adverse outcomes.
Such risk mitigation measures can be facilitated if local authorities begin to record and evaluate information relating to the aggregated impact on vulnerable and disadvantaged groups of cuts, not just in their own spending but also spending by the rest of the public sector and cuts in social security benefits. By such means, local authorities can learn how to manage their ongoing austerity programmes more effectively, ultimately becoming more skilled in identifying, auditing and mitigating social risk.
CONTACT US
To request a copy of the full report or if you would like any further information about the project. Please contact Claire McCann [email protected] 0141 331 8497 or visit our website for further information: http://www.gcu.ac.uk/mrsc.
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