Austerity, the sustained and widespread cuts to government budgets, has characterised Britain’s public policy since 2010. The local state has undergone substantial restructuring, driven by major budget reductions from central government. Hitherto, few studies of austerity in the UK have considered the interplay of national and local policies. We contribute a fine-grained spatial analysis of local authority budgets, highlighting their socioeconomically- and geographically-uneven impacts. We identify substantial variations between authorities in terms of funding, local tax-base, fiscal resources, assets, political control, service-need and demographics. We argue that austerity has actively reshaped the relationship between central and local government in Britain, shrinking the capacity of the local state, increasing inequality between local governments, and exacerbating territorial injustice.