The cost of not listening series: Councils are counting the cost when citizens are counting on them

16 August 2022

The cost of not listening series: Councils are counting the cost when citizens are counting on them

Austerity was officially over, the pandemic just a memory, and levelling-up was coming to a town near you.

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However cynical they were about any or all of these statements, councils were ready to seize the opportunities they saw and get their areas moving again as economies and communities emerged from the on-off lockdowns of the last two years. Then along came the cost of living crisis.

That those commentators who like to stay politically neutral have started yelling ‘JUST DO SOMETHING!’ from their social media accounts is significant – it feels practically non-political to say that the Government has been woefully absent in this rapidly developing situation.

And as so often, while central government figures out what it should do, local government has no choice but to get on with it – with its own problems growing all the time.

The pandemic saw councils diverting significant resources to cope with the impacts of Covid-19 – public health and otherwise – whilst many of their revenue streams were simultaneously drying up. Soaring prices are now squeezing councils further and creating a dual problem: a surge in demand for council services alongside rising costs and staff shortages which make those very services harder to sustain.

Research by the County Councils Network (CCN) and the Society of County Treasurers suggests that inflation costs in 2022/23 for 40 of England’s largest councils rose by an eye-watering 92% in the three months since they set their budgets in March.

The Local Government Association (LGA), meanwhile, believes that inflation, energy costs and projected increases to the National Living Wage will add £2.4 billion in extra cost pressures to council budgets in 2022-23, rising to £3.6 billion in 2024/25.

Keeping the lights on in their buildings, fuelling their fleet, purchasing materials and labour costs on external contracts – all are now costing councils more. Their staff, just like their service users, will be feeling the impact and pressure to increase wages will grow. And then, beyond the walls of the town hall, will be thousands of residents struggling with daily living costs.

Councillors report more and more people coming to them with money worries. And while central government-funded services exist to help those in the most need, councils argue that funding is lagging far behind the scale of the challenge and so they, at the local level, are having to step in to help people avert crisis. 

While central government figures out what it should do, local government has no choice but to get on with it – with its own problems growing all the time.

What we are seeing now

The cost of living crisis is, unsurprisingly, fast translating into rising demand for council support across the UK as rocketing food and energy bills push more and more people into financial difficulties – and ultimately into poverty.

There are knock on effects for housing too as growing rent and mortgage payments put more people at risk of homelessness. As the charity Crisis reported at the end of April, government data for the final quarter of 2021 showed a 168% increase in people facing eviction – and this was before the cost of living crisis began to bite.

Around housing costs, as elsewhere, the Government has taken steps to help, but councils view it as too little to deal with the scale of the problem. Some councils complain that the baseline local housing allowance rate valuations of 2020 are skewing the allowance available to people now in 2022 when rents have risen significantly. 

The risk to reviving local economies and ‘levelling-up’

As well as being bad for individuals and families, councils are worried that the ramifications of the crisis will take the legs out from under the post-Covid economic recovery, regeneration and wider ‘levelling-up’ ambitions.

The decline in high streets in recent years is a well-documented source of people’s frustration and despondency about where they live. The picture since the end of lockdown is mixed – some areas have continued to see the number of empty properties increase while others have benefitted from a bounce in consumer spending and business confidence.

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With rising interest rates and the Bank of England’s recent predictions of a prolonged recession, that spending and confidence – in those places where they were evident – look like they will be short-lived.

Increasingly we have seen councils becoming very interventionist in their local economies, from small grants to support start-ups, diversification, and digital retail to big schemes to redevelop whole shopping centres. The risk now, however, is that those new or recovering businesses or those big redevelopments are set back – some terminally so.

Against this backdrop, there is a real risk in many areas that substantial levelling-up investment in the next few years will fail to deliver the impact the government intends and that localities are hoping for.

Budgets for big capital projects simply won’t go as far as they would have done, and some schemes will need to be reined in or shelved altogether. And even when big projects survive relatively unscathed, if they are landing amid weak business confidence and shrinking spending power locally, they won’t be able to send out the positive economic ripples they are supposed to.

No wonder, then, that the Levelling-Up Secretary Greg Clark wants to see projects fast-tracked to ‘beat inflation.’

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Putting the future on pause

During the height of the pandemic we saw future-focused and vision-setting work put on hold whilst councils turned all resources they could into handling the many primary and secondary impacts of Covid on its communities.

As I wrote late last year, that was beginning to thaw and, if anything, the experience of and learning from the pandemic had prompted councils to invest more energy in rethinking their local futures. We are still seeing those projects commissioned, but there is once again a risk that a focus on the here-and-now kicks the can further down the road when it comes to rebuilding local visions that can guide and galvanise councils and their partners in the coming years.

What can we do?

At a time when vulnerable people and communities are under so much pressure, and their councils in turn are under pressure, what are the principles that needs to inform the local government response?

View the cost of living crisis as a ‘whole system’ challenge and collaborate

The ramifications of this crisis will filter into many areas of people’s lives, and that makes it a crisis that must be viewed and tackled by partners across local systems. One of the vehicles for doing that should be the new Integrated Care Systems (ICSs) – the latest attempt to bring health, government and voluntary, community and social enterprise (VCSE) organisations together in improving the health of their populations.

We hear from some of the places we’re working in that this can look and feel like ‘another health reorganisation’ which council officers and elected members watch from the side-lines, yet it will only achieve impact if local government fully engages in shaping these ICSs.

We know from our current work supporting emerging ICSs that while, like any transition, they are creating uncertainty and anxiety, health and local government staff also hope they can make it easier to build cross-sector and whole-system responses to the biggest local challenges – challenges which may manifest themselves in poor health, but which are rooted in wider problems.

The cost of living crisis will inevitably aggravate these existing challenges for individuals, families and communities, impacting directly and indirectly on people’s physical and mental health. As ICSs become established, therefore, working together across local systems to tackle the symptoms and effects of this crisis will be an early test of their mettle. 

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Take an asset-based approach to supporting people

Some of our public sector systems and processes mean that when citizens present with problems, those people can end up being seen as problems themselves. Even if this is rarely the intention, the deficit-based thinking which defines people only in terms of their needs and weaknesses will miss opportunities to build people’s skills, self-worth, confidence and agency.

Even when people’s needs are urgent, it is the responsibility of service providers to offer that support in ways that recognise and build people’s strengths. Councils talk positively about the way neighbourhoods rallied during the early pandemic, and how the voluntary sector and hyper-localised mutual aid were such a crucial element to the local Covid response.

This needs to be something councils and their partners continue to nurture and plug-into even though the challenges of the pandemic have morphed into something different.

Respond in ways that are shaped by people’s lived experience

A growing number of people need help now – and will continue to need help – in dealing with the stresses and strains they are facing. As winter approaches things will only get worse. In the rush to provide help, however, we need to make sure that we are still listening to and learning from people’s lived experience and using that to shape the support on offer.

It will be easy to revert to more paternalistic approaches which dole out help without fully grasping what help is most appropriate or how it can most effectively be received.

It will also be easy to lose sight of what good commissioning means – to provide or buy-in the services that appear to be needed but to ignore the other elements of the commissioning cycle whereby understanding need, gathering learning, and responding in real-time help to achieve impact.   

In the rush to provide help…we need to make sure that we are still listening to and learning from people’s lived experience and using that to shape the support on offer.

People need help right now – to eat, to heat their homes, to clothe their children – and that may reduce everyone’s bandwidth for thinking about the future. But as the experience of Covid showed us, difficult times also invite us to step back, reassess what matters and reaffirm what we want our communities to be like in the longer term.

This current cost of living crisis is throwing up some new or at least exaggerated challenges for people in the UK and is impacting people usually immune from financial worries. But as with the pandemic, it is also shining a light on the challenges that for some already existed and that will continue to exist.

Listening, engaging, involving and ultimately co-creating better futures with our citizens – these are not things we can put off until things are ‘back to normal’. Rather they are things we should continue to build into the foundations of how our councils work and how they support people to live their lives.

If these are all messages for local government, what’s the message for national government? It’s one they should be used to hearing: give councils more of the levers – and the money – and let them get on with what needs doing.

Get in touch

Rob Francis

Head of Local and National Government

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