Arrieta Hernandez - final before TS Correspondence Address: Tania Arrieta Hernandez, School of Business, University of Leicester, Leicester, UK, LE1 7RH; Email: tah32@leicester.ac.uk ISSN: 1911-4788 Volume 15, Issue 3, 518-537, 2021 The Consequences of the Austerity Policies for Public Services in the UK TANIA ARRIETA HERNANDEZ University of Leicester, UK ABSTRACT This article examines the changing landscape of public service provision in the UK during austerity. Austerity is presented through the notions of retrenchment, decentralisation and shifts in governance. The analysis shows that retrenchment and decentralisation eroded the capacity of public institutions to protect the provision of vital public services. This is revealed through the reduced provision of non-statutory services and the reinforcement of inequalities in service provision. Shifts in governance have led to mixed outcomes in the quality of services. This article also addresses how austerity influenced many of the problems observed in service provision during the COVID-19 pandemic. Vital public services in the UK faced the pandemic with a diminished resource base, heightened inequalities and significant fragmentation in service provision. KEYWORDS austerity; public services; retrenchment; decentralisation; governance; pandemic Introduction In the aftermath of the financial crisis in 2007-2009, the Conservative-led coalition government in power in the UK between 2010 and 2015, implemented contractionary fiscal policies, better known as austerity policies. The government’s discourse focused on the need to reduce the public deficit caused by the alleged irresponsibility of the New Labour government that was in power between 1997 and 2010. The fiscal consolidation was achieved through cuts in public expenditure rather than through increases in taxation. The coalition government stated that despite the budget cuts, public expenditure would be around 41% of nominal GDP, representing the same level of expenditure as in 2006-2007 (HM Treasury, 2010). The forecast was not achieved and expenditure on public services in fact decreased from 44.7% in 2010-2011 to 37.9% in 2018-2019 as a proportion of GDP (HM Treasury, 2019). Boris Johnson from the Conservative party became the UK Prime The consequences of the austerity policies for public services in the UK Studies in Social Justice, Volume 15, Issue 3, 518-537, 2021 519 Minister in mid-2019 and released public expenditure above inflation for all public services after a decade of austerity. He released further expenditure during the COVID-19 pandemic in 2020-2021 as a way to protect private firms, the NHS and communities in need. But public services had already been significantly impacted by a decade of budgetary constraints, inhibiting their capacity to overcome the increases in demand during the pandemic. This article examines the changing landscape of service provision in the UK during austerity through the lens of three lines of research: the retrenchment of the public sector, the decentralisation of power and shifts in governance. Retrenchment relates to the reduction of the public sector through budgetary cuts that restricted the capacity of public institutions to protect statutory and non-statutory services. The decentralisation of power relates to the shift in responsibility from central to local government to fund and deliver local services despite authorities’ ability or willingness to accept it. Shifts in governance relate to the public sector sharing responsibility for service delivery with other sectors (e.g., the private sector). The period of analysis of the austerity programme covered in this article is between 2010- 2011 and 2018-2019. Trends in six public services are analysed to provide an understanding of the changing landscape in service provision. The services analysed are the NHS, adult social care, children’s social care, education, housing and the police. Only one study in the UK has analysed changes in service provision through the lens of these three lines of research and at the level of service provision (Pownall, 2013). Pownall analysed the impact that different policies under the austerity programme had on the NHS. This article extends the previous research by examining contemporary trends in service provision for a larger number of public services. The relevance of bringing together these three lines of research is that it provides a more complete picture of how austerity affected the delivery of vital public services in the UK. By carrying out the analysis at the level of public service it is possible to identify the different policies implemented by the UK government and their outcomes. This article also argues that austerity, conceptualised as the retrenchment of the public sector, decentralisation and shifts in governance, influenced many of the problems with regard to service provision that were visible during the COVID-19 pandemic. Only one study in the UK has explored this issue so far (Daly, 2020). Daly’s research shows that austerity fractured the social care sector and hampered its ability to overcome the struggles faced during the pandemic. This article extends the limited research available in this area by showing that budgetary constraints, variations in organisations’ spending capacity and fragmentation in service delivery fractured public institutions and affected their ability to overcome the social difficulties of 2020-2021. The period of analysis of the pandemic crisis covered in this article is from March 2020 (when the Conservative government announced the first national lockdown) to March 2021. Tania Arrieta Hernandez Studies in Social Justice, Volume 15, Issue 3, 518-537, 2021 520 This article makes three contributions to the austerity literature. First, it extends the understanding of how the provision of crucial services in the UK was affected by austerity. While the analysis reveals that the retrenchment of the public sector and the decentralisation of local government eroded the delivery of services, increased inequalities, and negatively impacted the vulnerable, the evidence on governance reveals a mixed picture regarding how the participation of the private and third sectors affected public services. Second, the article provides an understanding of the challenges different public services faced during the pandemic as a result of a decade of austerity. Finally, it provides a contemporary picture of the issues facing service provision in the UK due to the political choice to pursue austerity policies for a decade. Understanding Austerity Scholars have provided an understanding of austerity through narratives on the retrenchment of the public sector (Bach, 2016; Lobao et al., 2018). The retrenchment of the public sector has been achieved through lower tax bases and decreases in public expenditure. In countries such as the UK and the USA, the governments have reduced the tax bases as a way to attract foreign investment and increase people’s participation in the labour market (Arestis & Pelagidis, 2010; McGahey, 2013). As taxation is reduced, the main source of funding for the public sector is also reduced. Governments have also pursued austerity through budgetary reductions and have presented these reductions as indispensable to reduce public deficits in order to regain the confidence of investors (Kelton, 2015). Such policies have been linked to a neoliberal project to continue discrediting the capacity of the public sector and to allow more involvement of the private sector in public affairs (Grimshaw & Rubery, 2012; Levitas, 2012).1 Budgetary reductions and the increased participation of private providers have eroded public institutions and their capacity to secure social reproduction (Bach, 2012). This line of research is not only interested in assessing the scale of the reduction in public sector funding; it also provides an understanding of the implications of budgetary reductions (i.e., which societal groups the shrinking of the public sector affects the most) (Grimshaw & Rubery, 2012). The state is presented as a redistributive agent capable of balancing resources between wealthier and less wealthy communities (Gray & Barford, 2018) and as a guarantor of the rights needed to avoid the social exclusion of groups who face barriers to participation in the labour market (Ottmann, 2010). In this regard, it is argued that cuts in public sector funding have a 1 The relation between neoliberal policies and austerity is that both have aimed to reduce the public sector as a way to develop the market. These policies share the notion that the public sector crowds out the private sector’s competitiveness and investment, leading to a decline in growth, high inflation and elevated unemployment. The consequences of the austerity policies for public services in the UK Studies in Social Justice, Volume 15, Issue 3, 518-537, 2021 521 disproportionately negative impact on the vulnerable (Taylor-Gooby & Stoker, 2011). These arguments have been challenged by assessments of national budgets showing that public expenditure continues to represent a significant proportion of GDP in countries that have autonomously pursued austerity programmes (Lenzi & Zoppe, 2020). It is also challenged by the neoclassical proposition that argues in favour of reducing the public sector as a way to increase the private sector’s competitiveness and revenues (Alesina & Ardagna, 2010). The latter is said to have an equally positive impact on every household in the income distribution. The neoclassical argument is that the public sector crowds out the private sector's competitiveness, because the public sector offers wage premiums that force private firms to offer competitive wages, reducing the profitability of the latter sector. A second neoclassical argument is that releases of public expenditure can lead to public deficits, which affect investors’ confidence due to fear that government will default on its debt payments. Authors have also provided an understanding of austerity through the re- scaling literature that relates to decentralisation policies and the shift in responsibility for the delivery of services from central governments to local governments and municipalities (Gray & Barford, 2018). Although decentralisation started long before austerity, it has been reinforced by budgetary reductions and the need for local states to offset cuts in grants through other revenue sources. Authors who have opposed the reinforcement of decentralisation during a period of sustained spending reductions argue that these political strategies, which aim to support economic growth, do not consider differences in the collection revenue capacity of individual authorities (Clelland, 2020). Lowndes & Gardner (2016) argue that these practices allow central governments to hold onto political power whilst decentralising operational responsibilities. In this regard, it becomes authorities’ responsibility to develop their local economies and to support the market if they want to deliver public services to their constituents. Evidence of the negative implications of decentralisation, in particular of the inequalities that this political strategy creates, is presented by Gray & Barford (2018), who found that austerity reshaped the relationship between central and local government in Britain, shrinking the capacity of local government and exacerbating territorial injustice. On the other hand, decentralisation has been perceived as an opportunity for local governments to have more autonomy in decision-making. Governments have eschewed a one-size fits all approach and developed strategies that acknowledge and celebrate local variation (Lowndes & Gardner, 2016). Decentralisation is perceived as a remedy for budgetary reductions as it allows local governments to increase and diversify their revenue sources to offset cuts in grants. It is through decentralisation that authorities get the opportunity to retain local resources to identify and address local needs (Hlepas, 2016). Bruch & White (2018) found, for example, that decentralisation in the USA in the last two decades, which was reinforced after the financial crisis, led to higher local spending Tania Arrieta Hernandez Studies in Social Justice, Volume 15, Issue 3, 518-537, 2021 522 for some social programmes (e.g., childcare) and better identification of local needs. Austerity has also been studied through narratives on the shift in the governance of public services. By shifts in governance researchers typically refer to new forms of relationship between the state and non-state, private and voluntary sector actors (Lobao et al., 2018). The private and the third sectors become extensions of the public sector (Myers, 2017). As the capacity of the public sector is diminished due to budgetary constraints, new actors are required to step in and provide services where the public sector is unable to continue doing so. Although governments have not equated austerity with privatisation, they have implemented policies to increase the participation of private actors in public domains (Adisson & Artioli 2020; Bach, 2012). In similar terms, Humphris & Sigona (2019) have pointed to the negative implications of allowing more involvement of the private sector in the provision of services, particularly in terms of quality deterioration. As vulnerable communities are more likely to be in need of public services (Lowndes & Pratchett, 2012), erosion of the quality of services is likely to affect these communities the most. Hudson (2016) suggests that private firms tend to deliver lower quality services, in relation to the public and voluntary organisations, due to their need to reduce costs and maximize profits, which is done at the expense of sacrificing service quality. On the other hand, arguments in favour of an increased participation of private actors are grounded in public choice theory, which presents the public sector as an inefficient agent in terms of the allocation of public resources. They are also grounded in neoclassical economic theory, which presents public servants as selfish agents that are only interested in maximizing their personal budgets even though this means neglecting the communities they serve (Wright, 1993). By exposing previously in-house services to a new environment characterised by market discipline and competition, the overall costs are reduced whilst the quality and efficiency of the services are improved (Alonso & Andrews, 2016). Retrenchment of the Public Sector As shown in Table 1, out of the six services analysed, only the expenditure on the NHS and children’s social care were protected in real terms during the austerity years. Expenditure on the NHS increased in real terms by 10.6% from £100.4 billion to £111 billion between 2010-2011 and 2018-2019.2 This growth, however, was smaller in comparison to the years prior to the policies. The average annual expenditure growth in the NHS was 6.4% in real terms 2 Nominal expenditure figures were collected from the House of Commons (2019). The figures have been adjusted for inflation using the Inflation Index of Q4 2010 and Q4 2018 (91.1 and 106.9 respectively). Here and elsewhere, these are the inflation indices used (ONS 2019a). The consequences of the austerity policies for public services in the UK Studies in Social Justice, Volume 15, Issue 3, 518-537, 2021 523 between 2000-2001 and 2009-2010, but only 1.4% between 2010-2011 and 2018-2019 (House of Commons, 2019). As a result of a growing demand for health services measured by the number of episodes, health spending per head declined by 8.5% from £5,837 to £5,339 in real terms.3 Funding pressures in the NHS have also been the result of funding cuts to adult social care services. On average, the NHS spends £820 million annually treating older patients in hospitals who should be treated in local care home services (NAO, 2016a). The decline in health spending has affected the oldest population more in relation to other age groups as spending per head increases with age. While people aged 80 years old and above represented only 4.95% of the total population in England in 2018-2019, they accounted for approximately 16.29% of the health spending.4 Children’s social care is the only service on which authorities have consistently overspent since 2010- 2011. In 2017-2018 alone, the total national overspend in children’s social care was £872m (NAO, 2019a). Even though local governments increased the funding for children’s social care in real terms by 20.1% from £6.6 billion to £7.9 billion between 2010-2011 and 2018-2019,5 many authorities were unable to cope with the increasing demand for children’s services (more detail below). The relative funding protection that the health and the children’s social care services received led to significant real cuts in other services, including adult social care services. Adult social care spending per head, measured as adults in need (e.g., older people requiring support for daily activities), fell in real terms by 20.8% from £4,803 to £3,806 between 2010-2011 and 2018-2019.6 The government announced in the 2015 Spending Review that the spending for police forces would be protected in real terms (HM Treasury, 2015). However, the budget for police forces fell by 18.7% in real terms between 2010-2011 and 2018-2019, and spending per head in the police service fell in real terms by 23.6% from £216 to £165.7 In education, spending per pupil also fell in real terms by 21.4% from £5,600 to £4,402 between 2010-2011 3 Real expenditure figures of 2010 and 2018 were divided by the number of finished consultant episodes (17.2 million in 2010 and 20.8 million in 2018) (NHS England, 2019). 4 This estimation used data from the Hospital Episodes Statistics (HES) regarding outpatient and inpatient episodes in 2018-2019 (NHS Digital, 2019a). The National Tariffs of 2018-2019 were also used to calculate an approximate expenditure by age group (NHS Improvement, 2019). 5 Nominal figures are from the MHCLG (2013; 2019a) and were adjusted for inflation. 6 Nominal figures are from the MHCLG (2013; 2019a) and were adjusted for inflation. Real expenditure figures for 2010 and 2018 were divided by an estimation of the number of adults in need. NAO estimates that 28% of people aged between 65 and 80 years old are being limited with their day-to-day activities. This estimate doubles for people aged 80+ years old. These estimations were represented in the population of England for 2010 and for 2018. According to these estimates, there were three million adults in need in 2010 and 3.6 million in 2018. 7 Nominal figures are from the MHCLG (2013; 2019a) and were adjusted for inflation. Expenditure figures for 2010 and 2018 were divided by the population in England and Wales for 2010 and 2018 (55.6 million and 59.1 million respectively) (ONS, 2019b). Tania Arrieta Hernandez Studies in Social Justice, Volume 15, Issue 3, 518-537, 2021 524 and 2018-2019.8 School spending is an area that was relatively protected during austerity. Yet, reductions in school spending and an increase in pupil numbers led to funding pressures in the delivery of education. There is evidence of a deterioration in the quality of the six public services due to budgetary reductions and insufficient public sector employee numbers. For example, some schools faced funding challenges, which resulted in compromising teaching quality, by relying on more unqualified staff and encouraging staff to teach outside of their specialism (NAO, 2016b). In the police service this was evidenced by the increase in the number of days to charge criminal offences (NAO, 2018a). Expenditure changes in real terms for the six public services, between 2010- 11 and 2018-19 Figures in million Service Expenditure in 2010-11 (£) Expenditure in 2018-19 (£) Figures of 2018-19 adjusted for inflation (£) Expenditure change in real terms (%) NHS 100,400 130,300 111,041 10.6 Adult social care 14,408 16,076 13,700 -4.9 Children social care 6,654 9,375 7,989 20.1 Police service 11,982 11,425 9,736 -18.7 Education service (schools) 45,362 45,150 38,477 -15.2 Housing service 2,482 1,672 1,425 -42.6 Table 1. Expenditure changes in real terms for some services between 2010- 2011 and 2018-2019 (sources: House of Commons, 2019; MHCLG, 2013, 2019a; NAO, 2019b; ONS; 2019a). In local government, authorities faced budgetary constraints, and whilst the budget for statutory services was protected, the provision of non-statutory services was significantly reduced. Even in those relatively protected statutory services, funding for preventive services was significantly reduced reflecting the scale of the reduction in the public sector. The decline in the provision of preventive services has had negative implications for people who 8 The nominal figure of 2010 is from the MHCLG (2013) and the nominal figure for 2018 is from NAO (2019b) to account for funding variations given the conversion of schools to academies. Nominal figures for 2010 and 2018 were adjusted for inflation and were divided by the number of pupils in primary and secondary schools in 2010 and 2018 (8.1 million and 8.74 million respectively). The consequences of the austerity policies for public services in the UK Studies in Social Justice, Volume 15, Issue 3, 518-537, 2021 525 benefit from short-term programmes to enhance their well-being. As suggested by the National Children’s Bureau (NCB, 2017), for every £4 spent on later intervention in children’s services only £1 is spent on early intervention services. Although authorities recognise the negative consequences of restricting services focused on early intervention, many have prioritised services focused on later intervention (e.g., children’s protection plans). For instance, families of children with disabilities are likely to benefit more from intervention plans in the form of therapy and programmes that promote children’s development (e.g., the enhancement of specific skills). According to the Rainbow Trust, as cited in the NCB’s report (2017), for some children early intervention means that their families are better able to support them so they do not have to be taken into care. In adult social care services, authorities have also prioritised the budget for long-term support services (e.g., care homes) over the budget for preventive short-term services. Short-term services aim to provide support for people to regain their skills, confidence and independence when these are lost as a result of illness. In 2018-2019, the budget for short-term services was £0.6 billion in comparison to the budget for long-term support, which was £15.0 billion (NHS Digital, 2019b). Preventive care services are also becoming restricted for ethnic minorities. For example, Black British people have higher rates of mental health hospital admissions and readmissions, and longer stays compared with other ethnic groups. Despite this, Black adults are the least likely group to report receiving preventive treatments (CQC, 2018). Decentralisation of Power The UK government pursued the decentralisation of local government by reducing central grants and by allowing authorities to collect additional revenue from different sources (e.g., property taxes, fees and investment). In 2018-2019, cuts in grants still outweighed authorities’ revenues from other sources (MHCLG, 2019a). According to Lowndes & Gardner (2016), the decentralisation of local government has been a political strategy to stimulate economic growth based on greater sub-regional autonomy and increased competitiveness across and between regions. Authorities in deprived areas have been significantly affected due to their dependency on grants and their restricted capacity to raise additional revenues from taxes, fees and investment (given their households’ and businesses’ composition). Deprived areas have also been affected by the restrictions faced by other sectors, such as voluntary organisations, which step in and provide services where the public sector is unable to do so; due to austerity, these other sectors have faced challenges as a result of their dependency on statutory funding (Jones et al., 2016). In children’s social care services, there is an important variation in Tania Arrieta Hernandez Studies in Social Justice, Volume 15, Issue 3, 518-537, 2021 526 authorities’ intervention rates (NAO, 2019a).9 This variation is the result of authorities’ discretionary responses in terms of how to allocate funding and their interpretation of local policy. Children in deprived areas face more inequality in accessing services, because deprived authorities have less spending power and larger numbers of children in need, which affects their intervention rates. According to a study by Bywaters et al. (2017), children in the most deprived decile are around 13 times more likely to be under a child protection plan (e.g., the promotion of the child’s welfare) and 11 times more likely to be under a looked-after children plan (children in the care of authorities) than a child in the least deprived decile. The same study shows that ethnic minority status is strongly associated with a greater chance of deprivation. Only 21% of white children live in the most deprived neighbourhoods, compared with a third of children belonging to ethnic minorities. As suggested by Bywaters et al. (2017) areas with few services, where services are not accessible or appropriate to families’ needs, are likely to have lower rates of intervention in comparison to areas where services are accessible and plentiful. Inequality is also evident in health and adult social care services. According to the CQC (2018), there has been an improvement in the overall quality of health and social care services despite continuing challenges related to demand and funding. However, as suggested by the commission, people still face inequality when accessing these services. The commission argues that access to these services varies depending on where people live and the type of services accessed. In addition, people’s experiences are often determined by how well the different parts of the local system work altogether. As a result of this unequal access, the number of older people with unmet needs is now estimated to be 1.4 million. The CQC (2018) estimates that the cost of informal care amounts to more than £57 billion annually. This is three times more than the expenditure on adult social care of £16 billion incurred by local governments in 2018-2019 (MHCLG, 2019a). Inequalities in health and adult social care services may also be driven by differences in the funding allocated per person. For instance, the average weekly funding for a person with a learning disability aged under 65 is £1,436 compared to £550 for older people with dementia (CQC, 2018). Furthermore, spending cuts in the health service have led to a gap in the provision of services between deprived and less deprived areas. For example, in 2019 the percentage of patients who waited up to 18 weeks to receive treatment varied from 83.7% in the South West of England (a less deprived region) to 88.1% in northern regions (NHS England, 2019). Spending cuts in the police service and housing have also affected more deprived areas to a greater extent than less deprived areas. Regarding the 9 Intervention rates are authorities’ assessments of children in need. Authorities may use their statutory powers to place children in need in protection plans or take them into care (e.g., foster care or residential care). The consequences of the austerity policies for public services in the UK Studies in Social Justice, Volume 15, Issue 3, 518-537, 2021 527 police service, the authority most affected by spending cuts between 2010- 2011 and 2018-2019 was Northumbria,10 while the least affected was Surrey (NAO, 2018a). Data from the ONS (2019c) show that areas that have seen important cuts in their police service funding have also experienced rises in crime rates. For instance, the rate of crime (i.e., excluding fraud) per 1,000 people was 110.7 in Northumbria in 2018, while in Surrey it was 63.1. Furthermore, crimes using sharp instruments (e.g., knives) more than doubled from 393 offences to 887 in Northumbria between 2010 and 2018, while in Surrey these offences slightly decreased from 65 to 60 over the same period. In the housing sector, spending cuts led to unequal dwelling development. According to the ONS (2019d), the three regions with the lowest number of social housing dwellings between 2010-2011 and 2018-2019 were the North East with 10,080, Yorkshire and the Humber with 10,860, and the North West with 17,080.11 These three northern regions face more deprivation in comparison to southern regions. Despite the low number of dwelling developments, these three regions represented 27.5% of the total population in England in 2018 (ONS, 2019b). In contrast, the region with the highest number of social housing developments was London, with 56,780. Although some boroughs in London also face deprivation, London is also a region that concentrates wealthier populations and higher paid jobs. Shifts in Governance The government promoted greater involvement of the private and third sectors in public services since the early years of the austerity programme through policies such as Open Public Services.12 Private actors have been the real winners of these policies, since voluntary organisations have encountered more barriers due to their dependency on statutory funding and limitations to raising funding from other sources (e.g., donations). Concerns have emerged regarding the increasing involvement of the private sector in public services, such as the erosion of service quality and the tendency towards market concentration and the dominance of a few private providers at the national and regional levels (NAO, 2016c). Despite these concerns, budgetary constraints and the need for local authorities to achieve savings have led to authorities continuing to rely on private actors for service delivery. As suggested by Rubery (2015), the traditional model of service provision, where public actors had most of the responsibility for delivering public services, has shifted to one of heightened fragmentation and complex 10 This authority is located in the North East of England. According to the 2019 Index of Deprivation, this region had a concentration of neighbourhoods in the most deprived decile in that year (MHCLG, 2019b). 11 This is measured as started dwellings instead of completed dwellings. The number of dwellings represents housebuilding by housing associations and local authorities. 12 Implemented in 2011, it invited competitive and willing providers to deliver public services. Tania Arrieta Hernandez Studies in Social Justice, Volume 15, Issue 3, 518-537, 2021 528 multifaceted relationships. The participation of private providers in service provision is now visible in most services. In the health service, this was reinforced through the Health and Social Care Act 2012, which established a market structure where private organisations have been able to compete alongside NHS departments for the delivery of health services. Although there were concerns about how the Act could influence the marketization of the health service (Pownall, 2013), it did not lead to a significant increase in the share of spending on services delivered by private organisations. As shown by the think tank The King’s Fund (2019), in 2019-2020, the NHS spent £9.7 billion on services delivered by the private sector, which represented less than 11% of the total revenue spent by the NHS. Yet, as pointed out by the think tank, this estimate is likely to underrepresent the real spending on private providers, given that central bodies do not hold detailed information on individual contracts with service providers. Moreover, since 2015 there has been a trend towards the concentration of high value contracts with a few private providers. Some of these contracts have proved unsuccessful, such as the £330 millon contract that the NHS signed with the private firm Capita to provide primary care services, which Capita then failed to deliver. Local services have experienced a more pronounced shift in governance due to their limited resources. In the adult social care sector, 84% of the services are delivered by private providers (Daly, 2020). Studies have shown that the quality of private care homes tends to be generally lower in relation to the services provided by local authorities and voluntary organisations (Hudson 2016). This has been related to the need for private organisations to generate a profit; they therefore implement strategies to reduce costs such as reducing the staff-patient ratio and paying lower wages for less experienced and qualified staff (Hudson, 2016; Sasse et al., 2019). The participation of private actors in the children’s social care service has also increased significantly in the last decade. Of the 11,000 more children in care in 2019 in comparison to 2011, 73% were cared for by private organisations (Children’s Commissioner, 2020). There is little available evidence on how the commissioning of children’s social care has affected the quality of the service, but as suggested by the Children’s Commissioner (2020), the quality has been generally “good” or “outstanding” except for smaller private organisations that have received lower quality ratings from OSFTED. Many schools have converted to academies in the last decade, driven by the presumption under the Education Act 2011 that all new schools would be academies and the compulsion of underperforming schools to convert to academy status. As of 2018, nearly a third of all schools in England were registered as academies (West & Wolfe, 2018). Although academies are funded by central government, they are entitled to receive grants and additional funding from other organisations or businesses. Concerns have been raised about the involvement of other funders in the decision-making of academies in relation to relying on more unqualified and inexperienced The consequences of the austerity policies for public services in the UK Studies in Social Justice, Volume 15, Issue 3, 518-537, 2021 529 teaching staff, the appointment of senior personnel and the procurement of services (House of Commons, n.d). The government promoted the conversion of schools to academies by arguing that the latter would lead to higher attainment and improved educational outcomes. However, evidence presented by Eyles et al. (2016) showed that the creation of academies during the New Labour government led to higher educational attainment, but the bulk of conversions after 2010 did not lead to improved outcomes. In the housing sector, private new housing continues to be the largest contributor to the housing sector. Since 2013 housing output has increased by 58.9%, of which over three-quarters has been accounted for by private new housing (ONS, 2020). Shifts in governance are also revealed by the recent commodification of the housing stock in the housing association sector. After 2010, housing associations came under increased pressure to diversify and generate funds through the sale of older properties and by providing housing with rents well above social housing levels (Murie, 2018). More involvement of private actors in housing development has not equated to higher quality. The NAO (2017) argues that there has been a significant improvement in the quality of housing since the government set out a definition of decent homes in 2001. Yet, there continues to be a higher proportion of non-decent homes in the private sector in relation to the social rented sector (75% vs. 14%). Discussion: Austerity and its Implications for the Pandemic Austerity has eroded the capacity of the NHS and local authorities to overcome the challenges brought by the pandemic. These challenges are related to the increase in demand for health services as the virus continued to spread and a higher demand for local services as people experienced unemployment, reductions in working hours and losses in disposable income due to lockdowns. Although expenditure on the six public services analysed here continues to represent a significant proportion of GDP, the analysis above points to the insufficiency of the latter and the reduced capacity of the state to protect people at vulnerable life stages. Public organisations have faced a decade of spending reductions and have had to protect statutory services over non-statutory services despite the negative implications that this has for groups in need of preventive services. Austerity did not lead to a “whole-state retrenchment,” but the gradations of state change were sufficient to erode public institutions’ capacity to protect communities in need (Lobao et al., 2018). Budget reductions inhibited the capacity of public organisations to protect services during the pandemic and this is visible in all of the services analysed. For the NHS, retrenchment in the form of budgetary reductions meant disinvestment in infrastructure and medical equipment, restrictions in the expansion of bed capacity and insufficient staff numbers. Prime Minister Boris Johnson allocated significant amounts of funding to the NHS throughout 2020 to deliver urgent priorities such as acquiring tests and Tania Arrieta Hernandez Studies in Social Justice, Volume 15, Issue 3, 518-537, 2021 530 ventilators. The funding allocated revealed the government’s commitment to supporting the NHS. On the less positive side, it also revealed the underfunding of the health sector experienced during austerity. The consequences of insufficient investment in infrastructure and medical equipment were soon evidenced in 2020, when the lack of protective equipment (PPE) put at risk the lives of many healthcare workers (Dyer, 2020). Although the NHS experienced increases in employment during austerity, these were not enough to address the recruitment and retention problems in the sector. In 2020, NHS England addressed the insufficiency of staff by inviting retired doctors to support the NHS in the fight against the pandemic, and by allowing final year medical students to graduate earlier to support the NHS (Harvey, 2020). Thousands of volunteers also helped to address the shortfalls in the NHS by delivering medicines to people in need. In the housing sector, budgetary constraints meant insufficient housebuilding by local authorities and social housing associations. The combination of increases in private rents, the freeze in housing benefit, and spending reductions in preventive housing services influenced a homelessness crisis in England. Data from MHCLG (2019c) show that 4,677 rough sleepers were estimated on a single night in 2018, an increase of 164% since 2010. The number of vulnerable people such as children and older groups facing homelessness also rose significantly. Homeless people were recognised as one of the most vulnerable groups during the pandemic due to their living conditions and poorer health in comparison to the rest of the population. In response to this, the government introduced the “Everyone In” campaign, which provided free accommodation to rough sleepers and those at risk of rough sleeping. It is estimated that more than 20,000 infections and 266 deaths among homelessness people were avoided due to this campaign in the first half of 2020 (NAO, 2021). By the end of 2020, more than 33,000 people had been placed in temporary accommodation (NAO, 2021). Although the government aims to move homeless people into more settled long-term accommodation by mid-2021, due to the insufficiency of housebuilding this is likely to prove challenging. Although the budgets for children’s social care and education were relatively protected during austerity, they were not enough to protect every child in need. Even prior to the pandemic, child poverty in the UK increased driven by budgetary constraints in public services and the freeze in welfare benefits between 2016 and 2020, which affected families with children.13 Relative child poverty increased to 4.2 million in 2018-2019 from 3.6 million in 2010-2011 (DWP, 2020). The pandemic worsened the situation for many low- and middle-income families with children. According to the Trussell Trust, the largest foodbank in the UK, it delivered approximately 2,600 food parcels to children every day during the first six months of the pandemic (The 13 The child element does not apply for a third and subsequent child born after April 2017 and the family element has been abolished for families with an eldest child born after April 2017. The consequences of the austerity policies for public services in the UK Studies in Social Justice, Volume 15, Issue 3, 518-537, 2021 531 Trussell Trust, 2020). During austerity, local authorities overspent on children’s social care services by reducing their spending on other services. This seems unlikely to happen again in the near future, as authorities will have to support the many needs that have emerged in their communities as a result of the pandemic. This may put more strain on low-income families with children. There is no evidence from the analysis above that decentralisation led to better identification of local needs and to more equipped authorities capable of supporting their communities. The government’s political strategy to push decentralisation at a time of constrained resources led to an unequal provision of services and greater needs in deprived areas (Gray & Barford, 2018). The pandemic revealed the polarization between richer and poorer regions and the many inequalities that were reinforced during austerity, whilst also highlighting the variations in the spending power of authorities. Most of the high COVID-19 infection rates happened in major urban cities and areas that have more neighbourhoods in deprivation, such as London, Birmingham, Manchester and Liverpool (Kulu & Dorey, 2021). COVID-19 deaths were higher among ethnic minorities (Kulu & Dorey, 2021), who are more likely to live in deprived areas compared to the White population. The geographical spread of infections and deaths is not unrelated to what happened during austerity. Budgetary constraints in the NHS led to a deterioration in the quality of the service and consequently to a rising number of unmet health needs. Fewer resources in deprived areas and a higher number of people in need of public services in these areas served to reinforce health, housing and income inequalities. As a result of school closures to avoid the spread of the virus, the educational gap is likely to increase further. This is likely to considerably affect more deprived areas where there are larger numbers of children in need and with lower educational attainment. Attainment is influenced by children’s nutrition, and children living in poorer areas are more likely to be in need of free schools’ meals. The inadequate quality and quantity of school meals has been exposed during the pandemic. As suggested by Power et al. (2020), the pandemic created the “perfect storm” for families with children from poorer backgrounds, given the combination of school closures, shortages of food due to losses in household income and the compromised availability of support from emergency food provision. Inequalities have also been exposed given the funding cuts in the police service. Although crime fell overall during the pandemic, areas with higher numbers of state benefit claimants and higher unemployment rates have continued to experience crime rates above pre- pandemic levels for some violent types of crimes (Kirchmaier & Villa-Llera, 2020). This reflects the unequal experiences between poorer and richer groups regarding social protection. The analysis of governance revealed that market competitiveness has been reinforced by the increased participation of private actors in public affairs. The development of the market has been made possible by sacrificing the Tania Arrieta Hernandez Studies in Social Justice, Volume 15, Issue 3, 518-537, 2021 532 quality of some services where the private sector has not been able to deliver quality at a reduced cost. A possible explanation for the underperformance of the private sector is given by Daly (2020), who argues that the fragmentation in service delivery has imposed difficulties for public organisations to regulate the performance of private providers whose main interest is to retain a profit. Nonetheless, the analysis of governance revealed the complex picture behind the involvement of the private sector in service delivery, since it showed that for some services, such as children’s social care, it has been beneficial. This complexity was also revealed in the mixed outcomes in quality across and within services. Yet, the evidence shows that service fragmentation influenced some of the problems that public organisations faced during the pandemic. The fragmentation in adult social care led to the inability of the government and public organisations to regulate the implementation of PPE and tests, which has been associated with the deaths of staff and care home residents (Daly, 2020). Fragmentation also made it difficult to monitor mortality rates in care homes associated with COVID-19. During austerity, local authorities achieved savings by reducing the fee they paid to their care commissioners, causing financial instability for many of them. Many of these private organisations faced the first wave of the pandemic with limited resources, which may have influenced their responses, or lack of them, during the pandemic. Yet, some of the problems that care homes faced seemed to have been beyond the provider’s control. For instance, care homes were pressured to accept patients from the NHS without certainty that they were free of COVID-19. Shifts in the governance of the NHS also influenced many of the struggles the service experienced during the pandemic. These struggles were related to the insufficiency of PPE, problems with the quality of tests and issues with IT systems that delayed information on test results to inform central government and local authorities about the rates of local infections (BMA, 2020). In 2018, the responsibility for managing PPE supplies and stockpiles was spread across multiple public bodies and private sector contractors with the objective of prioritising financial savings (NAO, 2020). Although NHS Procurement is responsible for monitoring the supply-chain logistics in the NHS, the complexity of the contracts makes it difficult to do this in practice (BMA, 2020). Problems with the quality of tests were revealed in July 2020 when the government withdrew testing kits from the private contractor Randox that did not comply with the quality standards. Co-governance, however, proved to be beneficial for some services during the pandemic, such as the housing sector. The campaign “Everyone In,” which helped over 33,000 rough sleepers (or at risk to become one) to find temporary accommodation during the pandemic, revealed the partnership and cooperation between central government, local authorities, and voluntary and private organisations. Central government allocated £4.6 billion to support local authorities to cover expenditure related to the campaign (NAO, 2021). This funding allowed authorities and voluntary organisations to identify homeless people across the UK and to The consequences of the austerity policies for public services in the UK Studies in Social Justice, Volume 15, Issue 3, 518-537, 2021 533 move them into temporary private accommodation based on a triage system (e.g., prioritisation of needs). Conclusions Austerity in the UK was pursued by the Conservative government between 2010-2011 and 2018-2019 as a political strategy to increase competitiveness and revenues in the private sector, hidden behind a political narrative on the need to reduce the public deficit. This political strategy led to the shrinking of the welfare state through budgetary reductions, the decentralisation of local government and increased fragmentation in service delivery. Despite the early evidence of the negative consequences that austerity was having for the poorest and most vulnerable groups (Taylor-Gooby & Stoker, 2011), the government continued to pursue austerity, making clear its priorities and preference for supporting the development of the market over the welfare state. The analysis revealed the consequences of this political strategy by presenting an understanding of the changing landscape of service provision through the notions of retrenchment, decentralisation and shifts in governance. The analysis revealed the reduced capacity of public institutions to protect crucial public services and the communities in need of those services. Decentralisation allowed authorities to have more autonomy over their revenue collection, but the revenue from different sources has been insufficient to offset the reductions in grants. As a result, authorities have seen divergences between the revenues collected and their actual spending needs, and the inequality in service provision between wealthier and less wealthier areas has been reinforced. The increased participation of private actors in service delivery has led to mixed outcomes in the quality of services, reflecting the complexity of private organisations’ incentives to deliver quality services (Alonso & Andrews, 2016). This article also presented an understanding of how austerity fractured public institutions and eroded their capacity to protect vital public services during the pandemic. The analysis revealed that public institutions faced the pandemic with constrained resources in relation to funding, infrastructure and staff. The many inequalities that were reinforced during austerity became clear during the pandemic. Deprived areas have seen higher rates of COVID- 19 infections and deaths, higher numbers of children needing support from foodbanks, and more challenges related to social protection. In addition, fragmentation in service delivery meant that the government and public organisations faced limitations in terms of regulating the compliance of private commissioners during the pandemic, which has been associated with shortages of resources and difficulties in monitoring infection rates and deaths. The outcomes of the pandemic have had a disproportionately negative impact on the most vulnerable and poorer groups. A decade of austerity placed lower-income households and poorer communities in an unfavourable Tania Arrieta Hernandez Studies in Social Justice, Volume 15, Issue 3, 518-537, 2021 534 position in terms of overcoming the struggles caused by the pandemic. As Levitas (2012) pointed out, austerity was punitive towards the low-income class in Britain, and this became evident in 2020. Perhaps one of the most important lessons of 2020 is that, as long as governments implement policies that prioritise wealth accumulation over social development, the neediest communities will continue to suffer the most. The Conservative government will play an important role in setting out the course for Britain. The government will be judged not only by its capacity to restore economic growth, but also in relation to the restoration of the welfare state. Some of the policies introduced in 2020-2021, such as the limited weekly increase in benefits and the proposed pay cap for health employees, have already triggered controversy by showing the government’s interest in continuing to support the development of the market at the expense of reducing the welfare state. Acknowledgements I would like to thank my PhD supervisors, Professor Peter Jackson and Professor Peter Nolan, for their invaluable support, feedback and guidance throughout my research. References Adisson, F., & Artioli, F. 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