Cllr Izzi Seccombe is the Leader of Warwickshire County Council and the Leader of the Conservative Group on the Local Government Association.
Twelve years ago, when the country was still dealing with the consequences of the global financial crisis, the Coalition Government, correctly, made some very difficult decisions to reduce the deficit and bring the national debt under control. Although many parts of the public sector were affected by reduced expenditure, local government shouldered a disproportionate share (some £15 billion) between 2010-2020.
An honest assessment of the early period of austerity is that after the New Labour years there was a fair of amount of fat to be trimmed in local government.
For example, in my own authority, Warwickshire County Council, we saved £111 million between 2014-2015 and 2020-2021.
The Council’s strong performance on the Cipfa financial resilience index and ‘green ratings’ from its external auditors reflect many years of effective financial management and a political willingness to take the difficult decisions as quickly as possible.
Five years ago we committed a substantial sum from our reserves to support a wholesale transformation programme which focused on demand management, a new tighter leadership structure, digitisation, and culture change. The programme is on course to deliver £87 million in cumulative savings by the end of the five-year Medium Term Financial Strategy, and the council is a much stronger organisation for it.
Specific areas that we have focused on include estates rationalisation to reduce running costs and provide capital receipts to reduce borrowing costs; investing in early intervention capacity, including our ‘start with strengths’ approach to help families avoid falling into crisis and prevent children entering care; investment in digital infrastructure to deliver process efficiencies and savings; and redesigning special educational needs services so they are more focused on early support in order to help more children stay in mainstream education.
Since 2010, councils across the country have led the public sector in developing shared services arrangements and new ways of working. To date this is estimated to have saved the taxpayer over £1.34 billion across 626 partnerships. More information on this is available at the LGA’s Shared Services page.
In doing so, many learnt from the example of the earliest pioneers of these new ways of working, Adur District Council and Worthing Borough Council, who, in July 2007, created a single officer structure providing joint shared services to both communities. Fifteen years on, staff continue to work across a majority of both council’s services, including IT systems, revenue and benefits, planning and parks, while each council still retains its own strong independent identity and democratic accountability.
This one partnership produces £3.6 million in savings per annum, whilst the consolidation of staff has resulted in the Adur Civic Centre being recently redeveloped for 140 new homes.
At a national level, the LGA and the Cabinet Office’s Government Property Unit jointly run the One Public Estate Programme (OPE).
The core purpose of OPE is to support work across the public sector to deliver property-led projects that create local economic growth, integrate public services, and drive efficiency savings. At its heart, it’s about local and central government working with other public bodies to transform local public services whilst delivering better value for money. OPE, which was launched in 12 pilot areas, now works with over 300 councils in England. By any measure, this is a nationally significant initiative which is estimated to have generated 44,000 jobs, released land for 25,000 homes, raised £615 million in capital receipts and cut running costs by £158 million.
I hope that the above reassures readers that local government has been at the forefront of finding efficiencies and embracing new ways of working over the past decade, and of course it will continue to do so. However, the reality is that little, if any, low hanging fruit remains in terms of budget cuts, and so any further reductions in real terms funding will have a direct impact on frontline services.
This was recognised by the government in the 2022/2023 Local Government Finance Settlement which provided a welcome potential increase of 6.9 per cent in council core spending power in cash terms. However, since then the national and international economic situation has of course significantly worsened.
In November 2021, when councils were setting their budgets for this financial year, the OBR forecast that CPI would be 4.4 per cent in 2022/2023. Since then, various pressures have added significantly increased costs to councils’ budgets. LGA analysis shows that there will be £2.4 billion in extra cost pressures this year, and gaps of £3.6 billion in 2023/2024 and £4.5 billion in 2024/2025 just to maintain services at pre-COVID levels.
Without immediate additional funding, councils will face increasingly difficult decisions about which services to stop providing, meaning not just isolated closures of individual facilities but significant cuts to the services people rely on, including those to the most vulnerable.
It is important that we are honest with central government about these pressures, but I am also clear that we need to set out a positive vision of how greater powers and funding for local government can save the taxpayer money whilst delivering improved outcomes.
I believe that empowering councils to play their full part as leaders of place will streamline resources, reduce bureaucracy, boost productivity and support levelling up.
For example, giving democratically elected local leaders the power to work with partners to join up careers’ advice and guidance, apprenticeships, business support services and outreach in the community by taking forward the LGA’s Work Local proposal could improve employment and skills outcomes by around 15 per cent.
This would mean in a medium sized authority area an extra 2,260 people improving their skills each year and 1,650 people moving into work. The LGA estimates that in such an example the local economy would be boosted by £35 million per year and there would be a saving to the taxpayer of £25 million per year.
Meanwhile, analysis by the University of York suggests that expenditure through the public health ring-fenced grant on preventative work is three to four times as cost-effective in improving health outcomes than if the same money had been spent in the NHS baseline.
These examples are just a couple of the positive and proactive suggestions that the LGA is currently making to government for a radical reinvestment in councils and combined authorities to enable them to turbo-charge local growth and create preventative public services that save money and improve the lives of the most vulnerable.
As we did in 2010, local government is once again ready to step up to the challenge by championing innovation and working in partnership with central government and the wider public sector in the most difficult of financial circumstances.