Innovation and Efficiency

20.07.17

LG mutual mooted to reduce £650m a year council insurance costs

The Local Government Association (LGA) has today announced that it is “exploring options” to set up a local government mutual to reduce the huge amounts that councils currently spend on insurance.

The mutual would support authorities to improve risk management through sharing best practice between different local councils.

Nationally, councils spend more than £650m a year on insurance, on claims around property damage as well as fleet cover to employers’ liability and protection against cyber-attacks.

The new mutual that the LGA is considering creating would aim to provide improved protection to LGA member authorities at a competitive rate – and would be owned and controlled by council members.

Other examples of mutuals in public service include the Fire & Rescue Indemnity Company, set up in 2015 by nine fire authorities, which achieved a surplus of £471,428 in its first year of trading.

The LGA stated that a mutual would be successful as it has an inherent interest in sharing best practice, and also supporting members to manage risks more effectively, leading to risk-related incidents reducing over time.

“Councils spend hundreds of millions of pounds on insurance nationally,” said LGA chairman Lord Porter. “They also routinely work together to share best practice and support each other to improve, but currently are limited in doing this by understandable confidentiality around insurance contracts.

“The LGA has for some time been exploring options for the development of a cost-effective alternative to the conventional insurance market products and services available to local authorities.”

Lord Porter also reassured councils that mutuals were long-established and trusted, and that a local government mutual would save councils money and give members the chance to control and manage their risks, claims and cover more effectively.

“The mutual will only be successful if enough local authorities join it,” the LGA chairman explained. “A large number of councils have expressed an interest.

“The crucial next stage is for a sufficient number to come together as founding members to explore the option of mutuality and the practical steps needed to help a local government mutual open for business.”

Have you got a story to tell? Would you like to become a PSE columnist? If so, click here

Comments

Cllr Peter Hughes   20/07/2017 at 14:26

This has to be a good prospect for Local Government, and could it not have a wider perspective, in terms of Public Sector Reform, if this was extended to and included other public sector services?? Mutuals and Co -operatives have to be looked at as beneficial options for Public Services having to find huge savings, with profits (if any) going to the public sector bodies (and effectively the public) instead of private shareholders who are purely in it to make money at our expense!

Stephen Laing At Assettrac   20/07/2017 at 14:51

In addition policy costs can be driven down further with the use of modern cloud based asset tracking systems providing accurate sums insured for buildings and contents, proof of ownership, and mobile device generated audit trails of safety inspections to improve productivity, maintain accountability and compliance with legislation.

Cllr Tom Maddison   20/07/2017 at 17:24

I echo 100% the thoughts and words above of Cllr Peter Hughes. Mutual and Co-operative models for providing efficient , democratic and cost effective services have been overlooked for far to long. With surplus and profit being returned to the sector and members it serves it really is a sensible approach and option both now and in the future.

Anonymous   06/08/2017 at 01:30

I presume you are all aware of the collapse of the last public sector mutual - MMI? We continue to pay for the losses of this as taxpayers. What evidence has been released regarding the new mutual that accurately demonstrates the savings it can make? How has it considered the future losses that commercial insurers are offering protection against? By all means consider any methods of risk financing but surely you are not all gullible enough to just fall for some marketing spiel claiming savings with no evidence?

Add your comment

 

public sector executive tv

more videos >

latest public sector news

Up to 2,500 homes on the way as part of York Central development proposals submitted

14/08/2018Up to 2,500 homes on the way as part of York Central development proposals submitted

Around 6,500 jobs and a 20% surge in the local economy are expected after landmark new plans were submitted for planning permission in York. ... more >
Fight against Dorset merger ends as Christchurch council accepts defeat

14/08/2018Fight against Dorset merger ends as Christchurch council accepts defeat

Christchurch Borough Council has agreed not to take its legal fight to the Court of Appeal following the refusal of its Judicial Review applicati... more >
Social housing green paper only small step compared to ‘huge need’ for affordable homes, LGA says

14/08/2018Social housing green paper only small step compared to ‘huge need’ for affordable homes, LGA says

The government’s social housing green paper is “only a small step” in delivering more social homes says the UK’s largest ... 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 >
Up to 2,500 homes on the way as part of York Central development proposals submitted

14/08/2018Up to 2,500 homes on the way as part of York Central development proposals submitted

Around 6,500 jobs and a 20% surge in the local economy are expected after landmark new plans were submitted for planning permission in York. Making use of one of the largest city-centre brow... more >
Fight against Dorset merger ends as Christchurch council accepts defeat

14/08/2018Fight against Dorset merger ends as Christchurch council accepts defeat

Christchurch Borough Council has agreed not to take its legal fight to the Court of Appeal following the refusal of its Judicial Review application, with leader Cllr David Flagg apologising for t... more >

the raven's daily blog

Don’t horse around! Council finds new home for house-bound pony

13/08/2018Don’t horse around! Council finds new home for house-bound pony

A council that took four years in a legal wrangle to remove a pony from an Isle of Lewis house may have found the four-legged beast a new home. Western Isles council removed Grey Lady Too – a Connemara pony that was taken into the home by pensioner Stephanie Noble on Christmas Eve in 2011 – from its residence in 2014 because i... more >
read more blog posts from 'the raven' >

comment

A new era of opportunity for the north

13/08/2018A new era of opportunity for the north

It’s time to stop seeing transport investment as a nice-to-have: it’s a cut-through catalyst for growth in sectors across the north. ... more >
Council mergers: little gain, less democratic

13/08/2018Council mergers: little gain, less democratic

Dr Linze Schaap, associate professor at the Tilburg Centre for Regional Law and Governance, and Dr Niels Karsten, assistant professor at the Tilb... more >
Creating a council cloud-first approach

13/08/2018Creating a council cloud-first approach

Georgina Maratheftis, programme manager for local government at techUK, makes the case for wider adoption of cloud technology by local authoritie... more >
The strength of districts

13/08/2018The strength of districts

Cllr Isobel Darby, member lead for quality of life at the District Councils’ Network (DCN) and leader of Chiltern District Council, shares ... more >

interviews

Modern policing: the future is bright

06/08/2018Modern policing: the future is bright

SPONSORED INTERVIEW The public sector, and policing in particular, has often been criticised as being slow to adapt to change. But now, says L... more >
Michael King: Time for Ombudsman reform

06/08/2018Michael King: Time for Ombudsman reform

Michael King first joined the Local Government Ombudsman service back in 2004 as deputy ombudsman. At the start of 2017, he was appointed as the ... more >
Helping a city understand itself

06/08/2018Helping a city understand itself

SPONSORED INTERVIEW The urban landscape is changing. How can local authorities keep up with citizen behaviour? Stephen Leece, managing directo... more >
Data at the heart of digital transformation

03/04/2018Data at the heart of digital transformation

SPONSORED INTERVIEW Grant Caley, UK & Ireland chief technologist at NetApp, speaks to PSE’s Luana Salles about the benefits of movin... more >

public sector focus

View all News