England & Wales, Scotland Health and social care, Welfare and equalities

What can local government do to prevent the recession from becoming another burden on health?

Persistent and enduring levels of health inequalities have been reinforced by the pandemic. Adam Tinson of The Health Foundation asks how we can prevent a worsening of health outcomes linked to poverty as the recession starts to bite.

This article is part of our Post-Covid Councils work focusing on Place and Community.

The Covid-19 pandemic has caused disruption and economic damage unprecedented in modern times, as well as a dreadful human toll. What has not been unprecedented are the inequalities it has highlighted – a disease that has hit those from deprived areas hardest and lockdown measures which have also had unequally distributed risks and consequences.

Our recent work, including the Marmot Review: ten years on that we funded, has highlighted the scale of the inequalities by health and their key drivers in socio-economic status. Health outcomes are worse for those living in poverty, and worse still for those living in poverty for prolonged periods of time. The association between poor health and income goes beyond affecting people who experience poverty, however. While poor health is most common among those at the bottom of the income distribution, the relationship continues up the income scale. Poor health is twice as prevalent for the bottom 40 per cent of people than it is among the top 10 per cent and even being in the top 10 per cent is associated with better health than being merely in the top 30 per cent.

The links between income and health are not simple, and likely interact with each other over the course of entire lifetimes, with disadvantage in health or income at one point in time influencing health or income later on in life. Both are also related to other factors such as access to quality housing. For example, being in good health can make finding and keeping employment easier, which raises incomes, while an adequate income can protect health by reducing the number of stresses and hardships people face.

The association between financial hardship and health outcomes suggests there are further risks to health from the economic fallout of Covid-19. The employment position has weakened slightly as of the figures covering July 2020, but the unwinding of the furlough scheme is likely to bring about increases in unemployment. Research from the IFS has found that areas hit hardest by unemployment in the last recession had increases in long-term health conditions, and the risk is we see a repeat on top of any lasting health legacy from Covid-19.

As we have recently noted, lower income workers are more likely to be furloughed than those higher up the income ladder. Some of those on the lowest incomes have benefitted from increases in certain benefits, which are set to expire next spring. Allowing these to expire next year when unemployment is likely to be considerably higher would inevitably result in further hardship given the inadequate level of social security going into the pandemic.

Where do these findings leave local government as we enter the next stage of the Covid crisis? There has been a transfer of risk from central to local government over the course of the decade, with councils bearing more responsibility but without corresponding increases in powers and resources. The reduction in budgets have had other consequences: our analysis has recorded shifts from preventive spending to late intervention spending in housing, children’s services, and public health. One risk is that preventive services face further cuts at a time when demand for council services increases, for example, when the ban on evictions is lifted. Maintaining these early intervention services around homelessness prevention, employability, and children’s services as far as possible should remain a priority for local government. While central government has provided two additional rounds of grant funding to councils, these are still low relative to some estimates of additional cost pressures and lost income.

Another area of focus should be on local government as a provider of last resort social security, such as hardship payments and local welfare schemes, as well as more routine reductions such as council tax support. The patchwork provision of local welfare funds and the widespread use of council tax minimum payments were associated with poverty before the pandemic. The risk is that with higher unemployment, these negative impacts are magnified.

In the first phase of the pandemic, councils have had to work quickly and in different ways: for example, alternative operating models other than simply delivering or commissioning services, and working more closely with the third sector. Our forthcoming report on inclusive economies discusses how local government can create a shared vision of quality economic growth that supports health through engaging residents and local leaders. At a practical level, this might include collaboration and integration between public health and economic development functions in councils and improving the measurement and analysis of economic development interventions. Innovations such as these might offer one way to start addressing enduring inequalities in health and income at the local level.

Place and Community will be the next pillar of our Post-Covid Councils project to launch. The first was Sustainable Futures.

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