Data black hole means government lacks grasp on two-thirds of local spending

Government does not understand why local authority performances vary due to £10bn data gap, think tank says
Kensal Rise Library, London, was closed due to cuts in 2011 and re-opened by the community in 2019. Photo: Jonathan Goldberg/Alamy

By Tevye Markson

04 May 2022

The government does not understand how neighbourhood services are being delivered across the country due to a lack of data, a think tank has warned.

Government has performance indicators for less than a third of neighbourhood spending, which means it cannot analyse around £10bn of local spending properly, according to a report by the Institute for Government.

This makes it impossible to judge how well local authorities are performing in comparison to each other, and to consider what they might learn from each other, the report said.

Based on analysis of local authority spending and outcomes, as well as interviews with council chiefs, the report – Neighbourhood services under strain – assessed how a decade of austerity cuts, from 2009-10 to 2019-2020, together with rising demand for social care services, have affected local services.

The report found that more deprived areas received larger government cuts to funding – causing disproportionate losses of services like libraries and bus routes – due to the government not taking into account that poorer areas were more dependent on central grants.

But it also found that bigger cuts to spending on local services did not necessarily result in equivalently worse performances, which was backed up by local authorities telling the IfG that efficiency savings and local politics were at least as important.

This suggests local authorities could get more out of funds by finding efficiencies and learning from each other. But due to the lack of local authority data on the quality and accessibility of services, the IfG said it is hard to assess and compare how local authorities managed to get the most out of reduced budgets.

The think tank has called for the government to collect better data – it currently only has performance indicators for 31% of neighbourhood services spending across the country – to improve its understanding of how and why local authority performance varies.

The two-thirds of spending on neighbourhood services for which the government cannot assess performance amounted to £10bn a year in 2019-20 and included street cleaning, economic development, museums, galleries and housing programmes.

In another example of poor data affecting the government’s ability to assess and compare local performance, the report found that the least deprived areas increased their spending on adult social care more quickly than the poorest areas.

Reasons for this could include increased demand in less deprived areas and deprived areas finding more savings through being efficient, but the lack of data makes it difficult to assess, the IfG said.

“This is a vital data gap for the government to fill, which the Institute for Government has highlighted before,” the report added.

The Department for Levelling Up, Housing and Communities set out plans to make more local data publicly available in its levelling up white paper, published in February. But the IfG has stressed that the government must make sure the right data “exists in the first place”.

Graham Atkins, who wrote the report, said: “The Johnson government’s ambition to make more subnational data available as part of the levelling up agenda is laudable, but there are still big gaps in what the government knows about local service performance.

“If the government truly wants to understand how and why performance varies, it will have to collect new, comparable local data on the quality and accessibility of services.”

While the think tank said the government already collects plenty of local authority spending and performance data, it described this as being “held in different places with often with little consistency between datasets” and said it often impossible to analyse performance.

A DLUHC spokesperson said: “Our flagship levelling up white paper sets out a clear blueprint on how we will reduce regional inequalities – this includes transforming our approach to data and evaluation to improve local decision-making.”

DLUHC said the most deprived areas of England will receive 14% more funding per home in this year’s settlement than the least deprived areas.

The Cabinet Office has been approached for comment.


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