“We would have to close all of our libraries, all of our leisure centres. We would have to reduce the electricity to our street lighting and close them down five nights a week. We’d have to stop all of the things that we do: cleaning out streets, keeping our parks maintained – and we still wouldn’t have enough to pay that money,” says Joe Anderson, Liverpool’s mayor, describing the effects a projected £33m “coronavirus budget shortfall” would have on his city if the council is asked to pay for it.
The city’s director of finances has estimated that the crisis could have cost the council £73m to date compared to normal spending. The council has already had £20m from the government in emergency funding, and is expecting about the same again – which would still leave it £33m in the red.
That’s on top of £30m of cuts the council had already passed in its April budget. Anyone hoping austerity was over and that things couldn’t get worse has been proven very wrong, very quickly.
London may be the hardest hit area in the country by the coronavirus outbreak – but it is far from the only one. In absolute terms, the capital has had the most cases of any UK city or region. This is clear when we draw a map of confirmed Covid-19 cases by council area, like this:
Then there is the fact that London had a surge of cases that put a huge and very newsworthy strain on emergency health services – quicker than anywhere else in Britain, at a time when consumption of Covid-19 news was at a peak.
Now, though, there are other places that have been hit just as hard by Covid-19 on a per-capita basis, and many of them may not have London’s economic resilience. Let’s look at that map again, but this time adjust it for population size:
Here other “epicentres” of the outbreak emerge: we see clusters of high case and death rates around Tyneside, Greater Manchester, the Black Country, and Merseyside.
In Liverpool, 2.7 out of every 1,000 residents has been confirmed as having Covid-19. That’s the same as central London on a per-head basis, and more than east or north London.
Liverpool has also recorded an age-standardised death rate of 82 for every 1,00,000 residents up to 17 April – the latest figures available. That is more than twice the national rate of 36 deaths for every 1,000 people in England and Wales.
Other parts of Merseyside have also been seriously affected. Neighbouring Knowsley and St Helens have both seen 3.3 cases for every 1,000 residents, and The Wirral 2.9. Parts of the north-east have had even higher confirmed case rates; Sunderland has 3.9 per 1,000 residents – second only to the London borough of Brent – and a death rate of 63 in every 100,000. There is also a cluster of high case rates in the Black Country, with Walsall showing around three cases per every 1,000 residents, as well as 0.7 deaths, and Wolverhampton a high death rate of 68 in every 100,000.
All are home to neighbourhoods with extremely high poverty rates; all are among the places affected most by a decade of government cuts, and therefore less well placed to respond to a pandemic.
There is no single explanation for the distribution of Covid-19 cases in the UK, and we might never know exactly why things have turned out the way they have. Population density is one obvious reason viruses might spread quicker in urban rather than rural areas. The age, wealth and baseline health of the population are almost certainly factors in the death rate, too.
An analysis by the ONS found that when adjusted for people’s age, the mortality rate of deaths involving Covid-19 in the most deprived areas of England was more than twice that in the least deprived areas.
Knowsley and Liverpool ranked second and third respectively in last year’s index of multiple deprivation – a measure of how deprived local areas are in terms of income, health and education, among other factors. In Knowsley, 476 in every 100,000 people die under the age of 75, as do 498 in Liverpool. That’s compared to 330 across England as a whole.
“We’ve got pretty densely populated communities,” says Anderson. “Most of them are the ones living in the most deprived wards of the city. Looking at morbidity rates in the city you’d probably find that they were higher in those most deprived areas.”
Councils – which have borne the brunt of austerity, and nowhere more so than in the urban north – aren’t just responsible for picking up the bins and cleaning the streets. They administer social care for the vulnerable and elderly, too, and process homelessness and benefit claims.
Liverpool council’s “core spending power” – the total money available to it from government and council taxes – fell by roughly 28 per cent between 2011/12 and 2018/19.
Knowsley Council’s core spending power dropped by 31 per cent, while St Helens and The Wirral saw their spending power drop by a quarter. Those core spending power figures include large hikes in council tax, so the true extent of cuts from national government is even higher.
Over the same period of cuts, local government has been forced to take on more responsibilities, including in areas such as adult social care and public health from 2013/14.
Many councils had only just started to see their core spending power start to rise again when the virus struck. We don’t yet know whether that trend will continue after the crisis.
“We used to have £163m in reserves,” says Anderson. “Today we’ve got £17m and we can’t go any lower than that because it’s illegal. That’s what we’ve been spending to keep our head above water to pay for adult social care. We’ve lost over 3,000 staff in Liverpool City Council since 2010.”
Those cuts are biting now, exacerbated by sickness and staff isolation during the epidemic. The council recently had to stop its green waste collection: at one point, Anderson estimates, 30 per cent of council workers were unable to come into work because they were ill or self-isolating.
Any money going to help the fight against Covid-19 is money not going on other pressing issues, such as homelessness.
In the three months to September last year, 615 households were assessed as being owed a homelessness duty in Liverpool, or 1.7 per cent of all households. That is well above the national average of 1.4 per cent, but far from the highest in the UK. Salford (also a coronavirus hotspot with 92 deaths for every 100,000 people) registered 696 families declared homeless in July-September 2019, or nearly 5 per cent of households.
The Local Government Association (LGA), which represents councils across the country, said that many are being “stretched to the maximum” by the coronavirus crisis, having faced a large and immediate hit to their income. It said: “Services from which councils normally derive income have discontinued or been scaled back and councils have also rightly offered other services free of charge.
“Many councils rely heavily on income from fees and charges to fund their annual expenditure. It is not possible for councils to reduce their activities to accommodate a loss of funding on this scale, particularly when facing other pressures. Councils have also received many requests to delay collection of council tax and business rates. They are at the same time being urged to continue to pay suppliers, in some cases upfront before services have been provided.”
The LGA said that cost pressures, lost income, and lost savings opportunities could nationally amount to four times the £3.2bn of coronavirus funding given to councils by the government.
If hard-pressed residents can’t look to the council during a crisis, can they manage on their own? Personal finances also have less capacity to take a hit in the urban north. On average, people in Liverpool took home £453 a week in 2019, compared to £482 across England. Those in Tyne and Wear took home even less, at £429.
That’s if people are lucky enough to be taking wages. Around 11,600 people in Liverpool were estimated to be unemployed in 2019 – around 4.8 per cent of the population – far higher than the national rate, which stood at 3.8 per cent in England.
It feels a lifetime ago since Rishi Sunak delivered on 11 March what was billed and received as a Budget that had finally turning the public spending taps back on, long after Theresa May originally declared an end to austerity. Can that still happen? A report earlier this month from the Office for Budget Responsibility projected a steep rise in the national budget deficit in 2020/21.
It said: “Before the impact of the coronavirus became clear, the government was content to run an ongoing deficit that would broadly stabilise the debt-to-GDP ratio over the medium term rather than reduce it – a judgement that it will no doubt revisit in the wake of the current crisis.”
The results of that revisiting could mean another round of austerity, which would be dreadful news for cash-strapped councils. “Governments over the past ten years have divided and ruled,” says Anderson.
“Some local authorities, especially in the big district councils, have been very well off and haven’t suffered in austerity like the northern cities. There are others, and some in London, of course, as well, that have really struggled. The bottom line is local government cannot pick up the cost of this.”
“If Liverpool has to pay £33m on top of the £30m cuts that it has found it will be looking at bankruptcy.”
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