The 2008 economic crisis highlighted the need for financial resilience among governments to handle economic downturns. The report Governmental financial resilience under austerity: English local authorities examines the concept of financial resilience in four English local authorities, emphasising its growing importance. In response to the 2008 global financial crisis, some countries implemented austerity measures like tax increases and cuts to social spending. But, as time passes, rather than just ‘bouncing back’, local councils now focus on ‘bouncing forward’, developing long-term financial management strategies.
The increased uncertainty, volatility and complexity arising from the economic crisis and the context of austerity require governments to put greater emphasis on flexibility, adaptability and a long-term perspective in their financial management.
Through a multiple case study analysis of four local authorities, this report adopts the conceptual lens of financial resilience to explore the main shocks undergone by local authorities over the last ten years and the related responses and capacities, with a specific focus on the 2008 crisis and current context of austerity.
The analysis suggests relevant implications for policy makers and managers.
This project explores and conceptualises financial resilience by looking at:
How English local authorities react to, anticipate and absorb shocks that affect their financial condition and whether different approaches emerge.
How reactions and capacities for response have evolved over time, particularly in the aftermath of the global financial crisis.
The lessons to be learnt to ensure that the financial resilience of local government is seen in a longer-term perspective.
"Looking forward, the councils appeared to be less optimistic about their ability to respond to the next wave of cuts, and future years are seen as potentially difficult. Each council recognised the need to further rethink its approach to financial management yet again in the coming years."
- The Governmental financial resilience under austerity: English local authorities report