Any eternal optimist left in local government who thought that the government would ‘Santa Claus-like’ deliver a sack of additional money will have woken up with a start when Eric Pickles (no Santa Claus) announced the local government finance settlement. This may have been a festive period announcement but it was not a festive message. Not only will there be no additional money, there will be further cuts to the grant.
Even our most optimistic local government friend would be considered outlandish if they expect any improvement in terms of central government support in the next spending review if the coalition government remains committed to its current macro-policies. There can also be little prospect of any sizeable increases in grant – if any – from a labour government in 2015.
Council tax freezes simply compound the financial challenges because at some time the government support to plug this gap will disappear.
Demand for local government services is not abating but far from it. The impact of the austerity driven recession, welfare ‘reform’, cuts to other public sector budgets such as the NHS and demographic changes are adding to the financial pressures on every local authority.
Recently the Leaders of three major northern city councils have spelt out what they see as the consequences of these financial pressures for their authorities and their communities, without additional government support. The Leaders of a large number of rural councils have also expressed their own concerns about the implications of the government’s grant cuts.
Local government – politically and managerially – has no choice but to respond to these pressures. Balanced budgets have to be set – and silly patronising ideas about how to save money from the Secretary of State and Communities and Local Government Committee (CLG) – are less than helpful. Hard political choices have to be made about which services to finance, which to change and indeed which to stop providing or financing. New and enhanced collaboration across local public sector has to be fostered; the basis of a new relationship between communities and citizens and councils will need to be developed; and new ways of securing core services will be essential.
It is easy to write these words. It is much more difficult as a Political Leader or Chief Executive to implement what lies behind them!
Local authorities have demonstrated their resilience over the decades but now there is the possibility that some will be unable to sustain themselves. The vast majority, especially those most hit by cuts to central grants and with the greatest social pressures, will have probably exhausted the usual and easier means of saving money. Of course, efficiencies will always be available but they won’t close a 28% + funding gap. Neither will shared services or shared management arrangements any more than the classic recruitment freezes or cuts to staff terms and conditions do so.
Every possible money-saving measure will need to be explored but this is the time for local government to think and act more collectively. There is a real opportunity to consider sharing and trading expertise, experience, ideas and spare capacity between authorities. Approaches such as CapacityGRID offer the means to support such initiatives.
What matters most is that local and central government finds a united voice to press for changes in policy, whilst working together to change and survive for the sake of local communities, businesses and residents.