Innovation and Efficiency

12.10.18

IfG: Unpopular funding reform decisions ahead as easiest council cuts have already been made

The easiest savings across the public sector have already been made and choices of where to cut corners are getting increasingly harder, meaning the government will soon have to face tough decisions on the future of public service financing.

In this year’s Performance Tracker report, the Institute for Government (IfG) argued that governments can no longer continue to provide the same services “by simply muddling through, with dollops of emergency cash.”

Instead, they will soon have to decide on the future sustainability of local government – whether that is through tax increases, lower expectations of services, more individual contributions, or radical service changes.

Worryingly, data from the OBR shows that if current taxation levels stay the same, in 50 years the state will only be able to fund retirement pensions and health services. Rob Whiteman, chief executive of CIPFA, argued that the government must therefore be willing to “fashion a new sustainable funding model,” backed by “bolder, braver and perhaps politically-unpopular decisions.”

On a local level, the IfG determined that the public have not been made explicitly aware of “important choices and trade-offs between spending and performance” in order to keep core services afloat and stay within budget.

The Performance Tracker takes an in-depth look at nine public services, providing a ‘concern rating’ for each – similar to an idea previously floated by CIPFA, which contributed to today’s report.

It raised particular concern about prisons, neighbourhood services and adult social care, with the latter “crowding out other spending” locally. Schools, on the other hand, have faced the smallest overall financial drop since 2010, but their budgets have started to be squeezed more tightly over the past couple of years and could be the government’s next target when seeking future cuts.

Overall, public services are more efficient than they were eight years ago, a phenomenon partly helped by the public sector pay cap. But this productivity has improved mostly by doing “more of the same” rather than through reform, and savings haven’t been enough to “bridge the widening gap between spending and demand.”

“One way the government has tried to save money and avoid the need for tax increases is by asking members of the public to contribute more in other ways – from volunteers running libraries to people paying a greater share of the cost of defending themselves in court,” Dr Emily Andrews, associate director at the IfG, explained.

In fact, where government can shift the costs of services onto individuals, it is “increasingly doing so,” the report claimed.

Andrews’ colleague Gemma Tetlow, chief economist, added: “The prime minister and chancellor must start making explicit the realities facing the country about what public services cost and how that money can be raised. They need to begin telling people clearly that they face a national choice.”

Responding to the tracker, LGA Resources Board chairman Cllr Richard Watts said councils have embraced efficiency and innovation “in a way that is not being replicated anywhere else in the public sector,” but funding remains unsustainable.

 

Enjoying PSE? Subscribe here to receive our weekly news updates or click here to receive a copy of the magazine!

Comments

   18/10/2018 at 07:44

Add your comment

 

related

public sector executive tv

more videos >

latest public sector news

Neath Port Talbot Council threatens to pull out of £1.3bn Swansea Bay City Deal

17/04/2019Neath Port Talbot Council threatens to pull out of £1.3bn Swansea Bay City Deal

A council has threatened to pull out of Swansea Bay’s £1.3bn city deal unless it starts delivering projects in the next six months. ... more >
Flintshire council takes over litter enforcement services from controversial Kingdom

17/04/2019Flintshire council takes over litter enforcement services from controversial Kingdom

Flintshire County Council has taken over litter enforcement services in the county and urged residents to “take responsibility” over ... more >
City council rejoins ICS after reforms agreed in privatisation and accountability row

17/04/2019City council rejoins ICS after reforms agreed in privatisation and accountability row

Nottingham City Council is to rejoin its local NHS integrated care system (ICS) after significant reforms were made to the way the system runs in... more >

editor's comment

25/10/2017Take a moment to celebrate

Devolution, restructuring and widespread service reform: from a journalist’s perspective, it’s never been a more exciting time to report on the public sector. That’s why I could not be more thrilled to be taking over the reins at PSE at this key juncture. There could not be a feature that more perfectly encapsulates this... read more >

last word

The importance of openness after Grenfell

The importance of openness after Grenfell

Following the recent Grenfell Tower tragedy, Lord Porter, chairman of the LGA, argues that if the public are going to have faith in the safety testing process then everything must be out in the o... more > more last word articles >
Neath Port Talbot Council threatens to pull out of £1.3bn Swansea Bay City Deal

17/04/2019Neath Port Talbot Council threatens to pull out of £1.3bn Swansea Bay City Deal

A council has threatened to pull out of Swansea Bay’s £1.3bn city deal unless it starts delivering projects in the next six months. Neath Port Talbot Council asked the other auth... more >
Flintshire council takes over litter enforcement services from controversial Kingdom

17/04/2019Flintshire council takes over litter enforcement services from controversial Kingdom

Flintshire County Council has taken over litter enforcement services in the county and urged residents to “take responsibility” over waste after it cut ties with the controversy-hit K... more >

the raven's daily blog

Self-build builds potential for more and better homes

15/04/2019Self-build builds potential for more and better homes

The director of The Right to Build Task Force – which advises stakeholders on bringing on more custom and self-build homes – Mario Wolf, who is currently on secondment from the Ministry of Housing, Communities and Local Government, discusses challenges the public sector needs to engage with to deliver housing supply growth. In... more >
read more blog posts from 'the raven' >

comment

Connecting the North East

15/04/2019Connecting the North East

Cabinet member for economic regeneration at Northumberland County Council Richard Wearmouth outlines the plans to reintroduce passenger services ... more >
What about social care?

15/04/2019What about social care?

Glen Garrod, president of the Association of Directors of Adult Social Services (ADASS), outlines the challenges facing the social care workforce... more >
How public sector IT can exploit the last 'big things'

15/04/2019How public sector IT can exploit the last 'big things'

Martin Ferguson, director of policy and research at Socitm, outlines the technology-related trends to look out for in the public sector throughou... more >
Brexit's systemic fallout

15/04/2019Brexit's systemic fallout

The third in a trilogy of Brexit articles for PSE, Chris Painter, Professor Emeritus at Birmingham City University, considers the wider constitut... more >

interviews

Digital innovation in the public sector: The future is now

17/12/2018Digital innovation in the public sector: The future is now

One of the public sector’s key technology partners has recently welcomed a new member to its team. Matt Spencer, O2’s head of public ... more >
Artificial intelligence: the devil is in the data

17/12/2018Artificial intelligence: the devil is in the data

It’s no secret that the public sector and its service providers need to invest in technology to help make better use of their resources. Bu... more >
New Dorset Councils CEO on the creation of a new unitary: ‘This is going to be the right decision for Dorset’

05/11/2018New Dorset Councils CEO on the creation of a new unitary: ‘This is going to be the right decision for Dorset’

The new chief executive of one of the new unitary authorities in Dorset has outlined his approach to culture and work with employees, arguing tha... more >
Keeping the momentum of the Northern Powerhouse

15/10/2018Keeping the momentum of the Northern Powerhouse

On 6 September, the biggest decision-makers of the north joined forces to celebrate and debate how to drive innovation and improvement through th... more >

public sector focus

View all News