Time for councils to step up 5

Mike Denham Burning Our Money

The spending review cuts Whitehall's annual support for local councils by 26% in real inflation adjusted terms. And that's just the headline shown in the report – once account is taken of the new social care responsibilities they've picked up, the like-for-like funding cut is almost certainly even bigger. The cost of their loan funding has also been increased.

So it should surprise nobody if councils up and down Britain start screaming foul.

But as the Taxpayers Alliance has consistently pointed out, in most councils there is a significant margin of waste. And the best councils have already shown how better management can extract huge savings without undermining service standards.

At a recent TPA seminar (reported by the BBC here), the leaders of three flagship councils highlighted some key steps councils can take to drive increased efficiency. They include:

Be more transparent – expose all spending to full scrutiny
Don't compromise on quality – better to cut functions than accept second-rate services
Outsource ruthlessly
Pinch ideas from other councils
Don't run arts centres – aka "stick to the knitting"

In these tough fiscal times, taxpayers everywhere should expect their local councils to learn from the best. And with the flexibility they have now been given over 80 previously ringfenced grants, councils should find it much easier to do what makes most sense locally, rather than what has been dictated from Whitehall.

What would not be acceptable would be councils failing to make these savings and instead racking up Council Tax.

Mike Denham

Mike is a former Treasury economist who worked extensively on public spending and fiscal analysis during the 1970s and early 1980s. His work included cost benefit appraisal of public projects, analysis of public sector cost inflation and value for money studies.

Follow @the_tpa

John

” . . outsource ruthlessly”
Outsourcing has been one of the costliest mistakes of local government in recent history. Some services can probably be outsourced effectively – the litmus test is ‘will the specification change during the lifetime of the contract?’. If the answer is ‘yes’, then we’re better off putting our house in order ie fixing problems from within. IT contracts are a shining example of shifting specifications, which just provides opportunities for outsourcers to pillage at will.
So please use some judgment before calling for outsourcing – we seem to get it wrong far more frequently than we get it right
Steve Collins

I agree with most of this article, except about outsourcing.
I agree with John, above. Be very careful before you relentlessly outsource, going down the Suffolk or Barnet route will ultimately compromise the quality of services and will cost money in the long run.
Also, balance money saved against risk. For example, one council is looking into outsourcing their child protection assessment work to a profit-driven company. How utterly mad is that?
mel

my local council – Peterborough – has just announced it is going to d a lot of outsourcing of back office services next year. These back office services are Housing and Council Tax Processing/delivery, Council Tax and Business Rates billing and administration, Payroll, Recovery. These are NOT back office services. What is going on? This is going to cost the local tax payer far more in the long run!
http://www.buy-ffxiv-gil.org ffxiv gil

The best councils have already shown how better management can extract huge savings without undermining service standards.
Pingback: Daily Mail's baseless 'pay apartheid' slur on public sector | Left Foot Forward