Does what you spend make a difference to what you get?

Posted by / Tuesday 26 June 2018 / Government spending
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Why do councils spend different amounts but don’t always get the same outcomes? When it comes to children’s services that is the £64,000 question.

Well, the Local Government Association has the answer.

New research published last week has found that the difference in spending is mainly accounted for by economic and geographic factors. This includes things like the level of deprivation in an area, the population size and how large a local authority is. These factors account for just over 50% of the difference in spending from one council to the next.

This is a really important finding. Councils will spend different amounts on children’s services but outcomes won’t necessarily show the stark differences you might expect to see.

This often leads to the false assumption that some Councils can spend less and still get the same results. This leads to the dangerous conclusion that councils are not in urgent need of vital funding. Instead, there just needs to be better leadership. This will help a council become more efficient and effective to achieve the outcomes neighbouring local authorities are seeing.

This is a convenient line for a Government looking to push back against calls for additional funding for councils at a time when they are face a £2bn funding gap by 2020.

Yet, the research found that local decision making only accounts for 13% of the variation in spend. This is not insignificant but much less important than geographic and economic factors.

So, what does this all mean?

Well, there is very little councils can do about their size or boundaries. They are not in a position to encourage people to move to reduce the size of their populations.

Simply put, they have no control over, or any way to realistically change, the major factors which drive difference in spend.

Councils can improve internal processes and stronger leadership will help. But it is not about to revolutionise the outcomes we are seeing.

Importantly, it isn’t going to dispel the legitimate need for additional funding that councils are calling for. Improved leadership alone is not about to make a sizeable dent in the funding gap emerging across England.

The Government is currently undertaking a review of spending on children’s services. This will report next year ahead of the Spending Review to help decide how much each local authority requires to meet local need.

Whatever finding comes from the Government review, the LGA analysis has one unmissable conclusion. Local authorities have little control over the factors that drive variations in spending. Council leadership alone isn’t going to make the funding gap disappear. Money matters.  

We're doing everything we can to get the government to understand how important these services are, and how cutting funding on children's services is leaving thousands of children and families without any support. 
Help us show the Government they need to provide vital support for early years services, so that all children get the best start in life. If you haven’t already, you can sign our petition below.

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