Is It Ever Right To Steal From The Poor And Give To The Rich?

Between the first year of the coalition Government and the end of the 2016 tax year, councils across England will have seen their spending power reduced by over 23% on average. The largest decreases have disproportionally hit the more deprived areas of the country. Can this be justified?

Last week the Government released the local government finance settlement letting each local authority know how much(or indeed, little) they’ll have to spend in the 2016/17 fiscal year. They also announced a £300m “transitional” fund to help hard hit councils. This led to Labour accusing the Tories of only looking after Conservative-run councils.

Curious to see exactly how each council has been hit since the coalition Government came to power, Ravi Subramanian has taken a look at the cuts to test the theory that the most deprived parts of the country have indeed suffered the most. I recommend you read his analysis but the tl;dr version is:

Yes.

Yes they have.

Here’s the pertinent graph:

What this graph shows is the most deprived councils (from left to right) and the percentage reduction in their budget (with the largest cuts at the top) over the past 6 years. It’s quite clear that the poorest places have fared, well, poorly.

There’s something that troubles me though. Why would the Tories disproportionally disadvantage poorer areas? True, the majority of these councils will be Labour controlled, so it’s a chance to kick Labour in parts of the country where the Conservatives are unlikely to ever win. But why give someone the chance to create the graph above that could be used to easily illustrate a “Nasty Party” narrative?

There were two things I wanted to see to help me understand what’s really going on. How much money does each council receive for every person in their catchment and which party controls each council.

As a proper data fiend, Ravi linked to the numbers he gathered to produce his analysis. To these I added the ONS population estimates for 2014 and the overall controlling party for each local authority. I could then produce this:

The City of London and Isles of Scilly have been removed because they’re weird. District councils have also been removed to align with Ravi’s graph.

As with the original graph I’m showing the most deprived councils on the left and most affluent on the right. However now we can see how much money each council has to spend for every person in their region (the reality will likely be a little lower for most councils as I’m using 2014 population estimates). We can also see which party controls each council.

To me, two things are clear. The first is that Labour are more likely to control councils in poorer parts of the country and vice versa for the Tories (no surprise but good to confirm it). The second is that the Conservatives are planning to give poorer, Labour-run councils more money per person than the more affluent Conservative controlled councils. It’s easier to see this by looking at the figures for the 4 types of council:

(Ok, there are more than 4 types of council but it’s already confusing enough. District councils don’t have as many responsibilities as the others — they’re not being short-changed.

The figures just go to underline what the graph suggested. Conservative councils and affluent areas get less money per person than Labour councils and deprived areas.

So what’s going on? How can Ravi’s graph show the Tories taking money from poor Labour councils yet my graph shows these councils getting a better deal than Tory ones? The truth is the results don’t contradict each other. Poorer areas were presumably getting significantly more money than the more prosperous places under the last Labour Government. This has allowed the coalition (and now Tory Government) to reduce the funding of some councils at a high level (in percentage terms) while still making sure they get more than their better-off neighbours.

It’s possible that prioritising underprivileged areas is the best thing to do. Or it could be more sensible to make sure everyone in the country is treated somewhat equally, as it’s possible the Tories are attempting to do (in terms of local government grants anyway). If I was feeling sinister I could claim that the last Labour Government ignored Tory councils and bribed Labour ones in a blatant attempt to win votes. I could also, of course, claim that the Tories have since robbed from the poor to subsidise the rich.

I suspect the there’s an element of truth to both conclusions.

Here’s my data