Local authorities are struggling to provide services for rising numbers of people facing disadvantage, with the most deprived areas hit hardest, report reveals.

A Quiet Crisis: Local Government Spending on Disadvantage shows that 97% of total cuts in spending on disadvantage have fallen on the fifth most deprived councils despite them also having higher numbers of people in need.

Published by the New Policy Institue (NPI), the report outlines how these deprived councils — typically northern metropolitan areas — have had to cut spending by 5% or £278m since 2011/12 due to reductions in central Government funding.

The least deprived areas, meanwhile, have been able to maintain or even increase spending on services for people facing disadvantage in the last five years. These are mostly southern county council areas.

The report, which was funded by the Lloyds Bank Foundation for England and Wales, shows that councils are being forced by Whitehall’s policy of austerity to shift funding away from preventative services in order to meet immediate crisis costs.

NPI found that in housing, preventive funding to help people stay in their homes has fallen 46% since 2011/12, while crisis spending, primarily on the costs of temporary accommodation for those who have become homeless, has risen 58%.

Similarly, A Quiet Crisis shows, to meet the costs of rising numbers of children going into care, councils are having to cut spending on the very services which could keep children out of care in the first place.

Council spending on services for disadvantaged groups has fallen overall by 2% since 2011/12 relative to 8% for local government spending overall.

During this period there has been an increase in the number of people needing help, with a 60% rise in the numbers requiring temporary accommodation due to homelessness, an 11% increase in the number of children being taken into the care system and a 4% increase in the number of people with a learning disability requiring assistance.

Reductions in the Government grant, coupled with the reduced capacity of poorer areas to raise their own taxes, will further undermine the link between an area’s need and its funding, the NPI report concluded.

‘Councils have been trying to do more with less for some years, but the tipping point is increasingly close with deprived areas hit hardest,’ said Paul Streets, chief executive of Lloyds Bank Foundation.

‘It cannot be right that the services you get if you are homeless or have a learning difficulty are dependent on the post-code lottery of the ability of your council to raise local taxes.

‘And it’s a false economy that in trying to cope councils are forced to cut the very preventive services that can help people before they get into trouble in the first place.

‘Local charities are doing their best to help councils pick up the pieces but as a country, we can and must do better than this. The Government needs urgently to look again at how it funds local councils to enable them to provide and fund services for those who need it the most, regardless of where they live.'