This report provides an early, yet systematic insight into how English local government is dealing with the severe contraction in grant income implemented after the 2010 Comprehensive Spending Review and subsequent local authority financial settlement. It is based on detailed analysis of local authority budget and expenditure data at a national level, plus interviews with 25 senior executives in a representative sample of English local authorities.

It has been widely reported that local authorities are among the most significant casualties of public spending cuts in the UK. This report provides the first full assessment of the real scale of the cuts. It also examines how reductions are distributed between local authorities of different types and levels of deprivation as well as between different kinds of services. In addition, the report explores how authorities are beginning to grapple with the challenges of budget contraction. It identifies the distinctive strategies and approaches being developed to remodel services, to address needs and to achieve broader efficiencies, and provides some evidence of the early impacts of these. A key focus of the research was on how the cuts would affect the capacity of local government to continue to serve deprived households and communities. The report provides initial evidence on this important question.