Budgeting and governing for deficit reduction in the UK public sector: act four - risk management arrangements

Abstract

It is now over a decade since the global financial crisis. This seismic event led to governments in many developed countries arguing that cutting spending and austerity policies were necessary in order to reduce the gap between public revenues and expenditure. In England, many of these spending reductions fell on the shoulders of local authorities, at a time when demand for locally-funded services such as adult social care was increasing (National Audit Office 2018). \nIn previous articles, we have argued that the UK Government sought to deliver its austerity programme through three Acts: multi-year spending reviews; annual budgets; and changes to accountability arrangements (Ferry and Eckersley 2011; 2012; 2015). Given the government’s desire to deliver many of its proposed spending reductions through local authorities, we might have expected ministers to increase their oversight of audit and risk management practices within councils, to ensure that funding cuts did not result in service failure. As this short piece will show, however, there has been a retreat from the ‘risk society’ and ‘audit society’ in central government’s approach to local authorities. Risk management practices have become more localised as a result, but concerns are increasing about the exposure of councils to significant financial and (especially) service risks.