What is Austerity?

The 2007/2008 financial crisis caught most governments off-guard. The unexpectedness of this crisis, coupled with its severity, left them searching for answers not only about how to recover, but to what led to the crisis in the first place. Although for many commentators, then and now, the lack of regulation, transparency and accountability surrounding the financial sector was at the heart of the problem, the British government came to a different conclusion. In 2010 David Cameron was elected Prime Minister, having campaigned on the claim that excessive state spending had led to the crisis and that his government would restore prosperity by cutting the UK deficit. Following his election, Cameron and his Conservative-Liberal Democrat coalition government began to pursue a policy of austerity, dramatically cutting back state spending .

While in other European countries, austerity was positioned as a necessary evil undertaken in order to save cash-strapped national governments, in the UK austerity was sold more as a virtue. It was not simply that the government could not afford to pay for public services anymore. Rather, the argument was that less government spending would lead to more economic growth, raising standards of living for everyone. For Cameron’s government, the welfare state was seen as especially bad for growth. Strong welfare provisions were depicted as particularly harmful to the economy as they were seen as creating incentives for people to stay away from work.

Today, we know that the impacts of this programme of austerity have done more harm than good. Many economists believe that austerity has hurt, not boosted growth in the UK[1]. Although economic growth rates have risen, the sense is that this would have happened much more rapidly without austerity. Worse still, researchers have shown that only a very small number of people have benefited from this growth. For example, Oxfam has revealed that while the top 1% of earners saw their incomes rise between 2010-2013, almost everyone else in the UK saw their incomes fall over the same period, with the poorest 10% being the hardest hit[2]. More recent research has revealed that cuts to the welfare state hit women twice as hard as men, and have seen minority groups, single parents and disabled people losing the largest share of their income[3].

The rhetoric around welfare cuts has suggested that those who depend on welfare should see their incomes rise as they move off  benefits and into work. But much of the job-growth in the UK has been in low-paid or insecure positions, meaning that moving into work can often make it harder to survive[4].  Meanwhile, changes to a range of personal and household benefits, such as the ‘bedroom tax’, the reduction in child tax credit, and the introduction of universal credit are having a profound effect on family life. Universal credit for example, is paid directly to the top-earner in each household. In today’s labour market, where men still tend to earn more than women, this change gives many men disproportionate control over household finances.

As the national government continues to reduce its spending, much of the financial pressure has been passed onto local and city councils. In turn, local councils have made further cuts to services in an attempt to make ends meet. Here, in Oxfordshire, Children and Family Services have become one such target for cuts. County Council officials have argued that with the budget pressures they face, they need to focus their services on those most in need. What this means is that many open-access services and community groups have lost their funding. Replacing them are new services which can only be accessed through referral, and which focus only on families facing significant hardship.

However, these services can have blind spots of their own. With increasingly limited budgets, austerity has driven many local authorities to find ways to ‘target’ their services at specific groups. This means that measurement and statistics have become more important to how government services are delivered. Yet measurements cannot capture everything. For example, we know that post-natal depression is likely to be significantly underreported[5]. We also know that this can happen to everyone, regardless of background or income. Targeting specific areas may fail to support many of the widespread experiences that form the ups and downs of parenting. Likewise for those living in ‘in need’ areas, targeted services may only focus on specific needs, while neglecting others. For example, current policy in Oxfordshire puts emphasis on signs of malnutrition or neglect in infants, but provides less support for their mental or emotional development, or for parents who may want guidance in navigating the new changes in their lives.

Lastly, austerity also often involves calls for community groups to step in where government is stepping back. In Oxford, after a few years where their future looked very uncertain, all but one of the former Children’s Centres in the city have been taken over by community groups – or are in the process of being taken over. These community groups are expected not only to find ways to run services independently, but to ensure they remain financially sustainable on their own. The result is that users of these centres inevitably see fewer services available.

Oxford today has a glimmer of hope, evident in the ways in which its communities are finding ways to meet the challenge of austerity. However, whilst the endless hard work and determination of such groups should be celebrated, we should not forget the punitive measures which made their efforts necessary in the first place!

[1] http://cfmsurvey.org/surveys/importance-elections-uk-economic-activity

[2] https://www.oxfam.org/sites/www.oxfam.org/files/cs-true-cost-austerity-inequality-uk-120913-en.pdf

[3] https://www.theguardian.com/society/2017/nov/17/women-and-disabled-austerity-report-tax-benefits-reforms

[4] http://eprints.lse.ac.uk/65615/1/Coulter_The%20UK%20labour%20market%20and%20the%20great%20recession.pdf

[5] https://www.nhs.uk/news/pregnancy-and-child/postnatal-depression-often-unreported/

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