When taxes go up, we hope to see services improve. But day after day, we report on the growing hardship facing those who rely on local government - especially the mentally ill, young families, and the elderly.

And yet our council tax is higher than ever, after seven years of increases. Investigations reporter JOEL ADAMS tries to find out where the money has gone

What do the figures say?

Ten years ago when Norfolk County Council set its budget for 2012/13, the total sum of money it had available to spend (to the nearest million) was £1,413,000,000.

Fast forward to the present day, and that number for the 2022/23 budget is £1,637,000,000.

So the council has much more money, right? That is an increase of 16pc, or close to a quarter of a billion pounds (£224m, to be precise).

Surely we should all be swimming in cash and public libraries.

In the same period, council tax on a Band D home in Norfolk has risen from £1,145 to £1,517 - an increase of more than 32pc.

So why does the council still not have enough money?

Eastern Daily Press: Norfolk County Council is working with voucher company, Edenred, to ensure children have access to free school meals over the Christmas period. Picture: ArchantNorfolk County Council is working with voucher company, Edenred, to ensure children have access to free school meals over the Christmas period. Picture: Archant (Image: Archant)

If there's more money, why isn't there more stuff?

Sadly it’s not as simple as saying councillors fritter it away on pet schemes, or that or senior officers are overpaid.

Some readers may agree with those sentiments but whatever truth is in them, it wouldn’t account for the kind of sums we’re talking about.

One very significant factor is inflation. The upward trend of wages and prices over time means £1 today is worth less than £1 a decade ago.

Inflation has been low, averaging only 1.7pc over the last decade, but the compound impact of small rises on top of small rises add up to big differences.

According to the Bank of England’s inflation calculator, if Norfolk County Council were to have a budget with the same purchasing power today as it had a decade ago, it would need to have £1.687bn.

It's easy to let your eyes gloss over the numbers, but that is £50 million less than the current budget of £1.637bn.

So immediately, that quarter-billion-pound increase over a decade has been swallowed up: actually we needed all of that plus another £50m just to stand still with the changing value of the pound.

Why haven't councillors done more to keep costs low?

Efforts have been made but many of the inflationary pressures on local councils are hard to avoid.

For instance: the council employs thousands of people on minimum wage, or in minimum wage industries including social care.

When the government puts up the national minimum wage, everyone to whom the council was paying that wage gets a pay rise - as do many of their supervisors and managers, to maintain pay differentials.

That means either the council has to use a larger chunk of its budget to pay those additional wages - or the council can pay fewer staff, but more generously.

With an annual budget of more than £400m, executive director of adult social care James Bullion spends more of Norfolk County Council's money than anyone else.

"When we build our budget every year, we have to put in a £6m increase from demography - that’s mainly the increased number of older people," he said.

"Then in this year for example it’s £12m for contracted inflation costs - by which I mean national living wage, national insurance contributions, and so on.

"Then in addition to that we have the market cost of care going up as well.

"So you add that up and compare it to the money you’ve got coming in from grants and council tax - and yes the cash figure doesn't change much, but what you can do with it gets less, because of those costs going up.

"Basically there are more people, who are getting older, with more complicated needs, which are getting more expensive."

Where does the money come from?

There are three main sources of income for local councils: residents (who pay council tax based on the property value of their homes) businesses (who pay business rates based on the rental value of their property) and central government (which sends out grants).

But changes over the last decade have made councils more dependent on their own taxpayers, to the detriment of less-well-off counties.

Previously business rates were collected by councils but then pooled centrally, to be sent back out to the regions as part of a "Formula Grant" or "Revenue Support Grant" (see graph).

That meant the Treasury could help "top up" poorer counties' funding with ratepayer cash from wealthier areas.

But now councils have to be more self-sufficient, with no revenue support grant and more of the local business rates staying in the area.

That makes councils more dependent on the council tax they can raise.

The problem with that is that wealthier counties have bigger houses and collect more tax with each percentage point increase in tax.

In Norfolk, 65pc of the properties are smaller, Band A-C homes, whereas in Surrey that figure is only 25pc with the remainder being large expensive properties.

So putting one percentage point on council tax in Norfolk raises around an extra £4.5m, but in Surrey that figure is close to twice that.

This funding change also explains why council tax has gone up twice as much, in percentage terms, than our council budget has increased - 32pc not 16pc. It's because the council tax makes up a greater and greater percentage of the council's overall income.

Andrew Jamieson, the Conservative councillor who serves as chair of the finance committee, was scathing about the tax.

"The more I look at it the more regressive I think it is, it's in desperate need of reform," he said. "We're expected to do more than we used to, but with less money."

Eastern Daily Press: Andrew Jamieson, Norfolk County Council cabinet member for financeAndrew Jamieson, Norfolk County Council cabinet member for finance (Image: Norfolk County Council)

He said the Institute of Fiscal Studies had estimated that in England, real terms spending per person had fallen by around 25pc over the last decade.

This year his party fought officers' recommendations, and kept this year's council tax rise one percentage point below the maximum.

How has the council handled the shortfalls?

Broadly, the work to reign in costs have come in three stages: first, the council cut wages, then, it sought to compress demand, and finally it started cutting services.

James Bullion explained how this had worked in the care sector: "At the beginning of austerity it was about getting maximum value.

"In Norfolk here in 2013 or '14, they externalised the residential care homes and the day centres to companies - going to [lower] private sector wages. So at that point we were doing the same, and it was costing less.

"We have 27,000 employees, and wages are 80-90% of cost, so it made sense for us to buy at the most competitive rate.

"After that the strategy, we did demand management. So to try and reorient people, rather than coming to the council, to use a strengths-based approach to reorient people to do their own thing."

Such efforts might include creating a personal budget for a person, or providing 're-ablement' services (for instance after a period of ill-health) over a short but intensive period, reducing overall costs.

Or it might mean adapting an older person's home, or moving them to a better-provisioned home, rather than incurring daily wage costs for a carer to come in each day.

This can cause upset: an elderly or disabled person's family might disagree with the council about just how independent that person can be, versus what care they need.

Mr Bullion went on: "However, even that strategy has not been enough to plug the gap. So we’ve had to go further.

"Currently, we’re now charging people more, and prioritising services - saying we won’t meet what was previously met, but was always discretionary.

"So for example for many years we funded wardens in housing schemes - people who looked out for the residents. Most of the people living there wouldn’t have been eligible for social care - their needs weren't 'critical or substantial'.

"And we took the unpalatable step of saying if we’ve got a gap, and we’ve done demand management and we’ve got better value out of the market, we have to say about some services: 'We can’t pay any more, but you can do this yourself'.

Where has the axe fallen sharpest?

Some services have been axed - the 'supporting people' fund was recently slashed from £10m to £5m, with all warden funding cut.

Others have been trimmed without disappearing, like the generosity and comprehensivity of adult social care services. And unlike many local authorities, Norfolk has not closed public libraries, but opening hours have been reduced, staff let go and mobile library services cut down to a single van.

However staff who work at the coalface warn that even subtle savings are having dramatic effects, both now and into the future.

One youth services worker told this paper: "Since the Youth Service was lost in Norfolk our 'looked after' numbers went up, and young people facing mental health issues has risen dramatically.

Eastern Daily Press: Jonathan Dunning, Norfolk county secretary for UNISON.Jonathan Dunning, Norfolk county secretary for UNISON. (Image: Supplied)

"Young people are telling us that they need someone to talk to somewhere to go and something to do and the county council is not really providing it in sufficient scale.

"The Youth Service budget was cut from around £4.5 million to £1 million today. Don’t forget that at around the same time as the loss of the Youth Service, the Connexions service had just been closed (£6m) and the Teenage Pregnancy Service closed - so in the space of a few years huge amounts of Youth Budget were lost to Prevention and Early Help Services.

"There has been some increase in provision recently, but what is lacking are the universal services that prevent the escalation to services such as social care and Norfolk and Suffolk Foundation Trust."

Unison union branch secretary Jonathan Dunning said: "Overall given the raw deal local government has been dealt I think NCC have managed it pretty well.

"But there simply isn't sufficient funding to provide the service we took for granted ten years ago.

"But the other thing is: we used to have a real living wage and career structure, right across these services. Now, terms of service and pay for staff are making it less attractive to take these kinds of careers."

With Norfolk suffering the effects of 1,000 care staff places unfilled, with 40pc of police officers' time being taken by mental health calls, all while our failing mental health trust cries out for more staff, one has to wonder who is counting the cost of all of these savings.