Local government – avoid the snip
Author: Paul Bettison, Accountancy Age |
When Gordon Brown announced to the TUC conference in September that he would have to make cuts to public spending, there was an air of inevitability about it.
Everyone knew it was coming and that “hard choices” had to be made. Quite rightly he said he would not support cuts in vital frontline services but this has not stopped the increasingly feverish debate on which services should or should not go.
The Institute of Directors, the CBI, national newspapers, magazines and think tanks have all waded in but, as is so often the case, reality can be very different. At the coalface of local service provision, money has always been tight, even during the good times. Impressions of widespread council waste are unfounded and the ‘job for life’ tag has long since gone.
Unfortunately other people have made the beds in which we all now have to lie. The overall budget gap is such that we cannot afford to sit back and hope for the best. Also, we cannot afford to make knee-jerk reactions and cut staff and services. We have to start prioritising services while improving efficiencies.
The CBI announced last month that the public sector should aim to save £30bn by 2013/2014. It sounds an awful lot of money. When the public sector was dancing to the tune of Gershon it managed savings of £26bn in four years and that was mainly through picking off the low hanging fruit those organisations that bought into Gershon and acted on it immediately.
With a broader plan of efficiencies and more councils getting involved, the target could be achievable without inflicting widespread carnage. In the last budget the Alistair Darling announced plans to save £15bn in public money by 2011. We have yet to see any real sign that the sector is on target.
Central government departments will undoubtedly play a role, but local government has to step up to the plate too. The government, under the watchful eye of former Cabinet Office director of shared services David Myers, made great strides towards implementing an attitude change in the public sector and creating a vision of efficient, shared service provision. Unfortunately local government as an entity didn’t want to play fair and the drive towards shared services came in fits and starts or, in some instances, mismarriages and collapses. A few high profile services such as Somerset’s Southwest One have subsequently pushed shared services down the popularity list. However shared services was always a good idea. It is just that in some quarters it has been poorly translated and implemented.
So what is the solution? More thrust and more direction from central government perhaps? Perhaps not. With mixed results this has already been tried and those that didn’t go for it the first time are hardly about to change their minds now. If anything, the reactionary elements in local government will put a stop to any new schemes and batten down the hatches hoping the storm of recession will pass overhead quickly. They could be waiting a while.
What councils need to do is roll their sleeves up and get their hands dirty. Many are already doing this, trying to avoid redundancies and trying to maintain all services.
A recent report from Localis and KPMG called on councils to save money by outsourcing non-frontline services and touched on the idea that they should be acting as commissioning and procurement hubs. This is born out of shared service thinking.
Bracknell Forest Council is a living, breathing example of the reinvigoration that shared services can bring and the savings that can be made in time and money. There are several initiatives that we have implemented that have all been successful. During the three-year Gershon period, we achieved efficiency savings of £7.1m compared to the £5.6m target.
Getting this foundation right is essential. The proposal last month by a member of the Public Accounts Committee to blacklist IT suppliers who oversell products, services and consultancy, shows how important initial choices have become. We chose Agresso as the main software supplier. Support costs can easily spiral out of control so we had to be sure this wasn’t going to be an issue. Other councils have fallen foul of this. Austin Mitchell, the labour MP who brought this proposal said: “When we try to do more with an IT system than it can bear, it inevitably breaks down and performs inadequately. There is failure on both sides, on the part of the department and the salespeople.”
Local government has to take responsibility and show more energy in fighting its way out of these troubled times. It’s too easy and too detrimental to communities and local government to just make cuts in staff and services. More can be done to improve efficiencies, cut waste and improve accountability. Perhaps the recession should be seen as an opportunity, one that focuses minds on providing efficiently run services and that makes all public sector workers appreciate the value of every penny of public money.