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Hard times: the latest chapter in the story of local government public health spending

  • 27 December 2022
  • 4-minute read

Authors

At The King’s Fund, we – and others – have been charting the trajectory of local government public health spending and the grant that central government provides since 2013. In that time we have seen a period of optimism, and early growth, followed by a serious decline and a plateauing in recent years. This blog updates the story, with the latest chapter recently set out in local government financial returns. So, how much did local government spend on public health in 2021/22, and what did they spend it on?

First off, though, these numbers don’t tell the whole story. Public health funding has become more complicated over time, partly due to temporary additional Covid-19 spending and partly because central government has made significant discretionary commitments in areas of related spending such as drugs and early years. We have argued, unsuccessfully, that the Department of Health and Social Care needs to put the pieces of this jigsaw together for transparency and scrutiny.

Nonetheless, local government public spending, principally funded through the central government grant, is the bread and butter of public health spending in England. What is happening to it is therefore critical to understand. The last time we looked, in March 2022, we saw a gap between what central government allocates to local government for public health spending and what local government reported on what it actually spent, the ‘out-turn’, and speculated what might be behind this, including Covid-19.

Figure 1 provides the answer, now we have the data for 2021/22. Local government spent £894 million more than the grant in 2021/22, growing from £514 million in 2020/21 and £92 million more the year before. In 2021/22 local government received an additional £879 million for Covid spending, £616 million of which was for test and trace and in 2020/21 £605 million overall, of which £377 million was for test and trace. If we take this out of the numbers due to its exceptional nature, as in Figure 1, we see that local government has essentially spent the same as the baseline allocation it receives from central government over time, with some minor variation year-by-year.

A chart showing public health grant allocation and out-turn spend in cash terms

Turning to Figure 2, real-terms spending (taking out the exceptional Covid-19 spending) continues its broadly flat trend from 2019/20 after falling from the high watermark of almost £4 billion in 2015/16. If that level of allocation from central government had been maintained year-on-year in real terms (taking out exceptional Covid-19 spending), public health services would have received almost £3 billion more cumulatively than it did to the end of 2020/21 (The King’s Fund analysis of underlying data in local government returns and GDP deflator estimates).

Figure 2 showing public health grant allocation and out-turn spend in real terms

Looking in more detail on what councils spent this money on in 2021/22 and how that has changed gives more in-depth detail on where local government is putting the money it does have on public health. Figure 3 ranks reported spending categories within the grant (minus exceptional Covid-19 spending).

Figure 3 shows local government out-turn spending on public health services (excluding Covid-19 exceptional spending) 2021/22

This shows that the biggest category is miscellaneous children’s 0-5 mandatory services – these include services such as health visiting that local government has a statutory duty to provide. This is followed by a mix of services for children, and substance and alcohol misuse treatment services. In comparison, non-treatment services (with the exception of contraception) tend to attract less funding. This trend – of prioritising statutory service budgets over prevention – has been apparent in the data right from the early days of the public health reforms and reflects both the absolute size and importance of these treatment services. This gives local government less leeway to prioritise other more preventative services. However, with the specific additional funds for drugs and early years services announced by the government this may change over time.

Figure 4 shows the percentage changes in spending lines between 2020/21 and 202/22. The highest percentage rises were in services with low absolute spends, for example at the top of the tree is spending on adult obesity, with growth of more than 25 per cent (probably tied to the government’s specific weight management services funding boost), closely followed by health protection (which may be related to other Covid-19 activity), childhood obesity measurement, public mental health and substance misuse prevention and harm reduction. These may be early signs of the fall-out of Covid-19 on longer-term issues in the population, and to some extent local public health teams trying to get ahead of the curve.

Figure 4 shows local government out-turn spending on public health services (excluding Covid-19 exceptional spending) per cent change from 2020/21 to 2021/22

In conclusion, these remain hard times for local government public health spending. Apparent growth during 2020/21 and 2021/22 is accounted for by additional exceptional funds for test and trace and other public health aspects of Covid-19. Beyond that spend is flat, and a cumulative £3 billion below in real terms what it would have been had it been kept at its 2015/16 level. We are seeing some changes in how local government allocates this spending, with some early signs perhaps of the longer run impacts of Covid-19 starting to feed through. But we will need to wait for more on that in the next set of figures, and for the Department of Health and Social Care to do more to make sense of these numbers in the wider context of changes made to the public health system.