Latest Public Sector News

15.10.14

Change ‘inevitable’ for councils in response to cuts – Vision 2020

Fundamental changes to local government both operationally and constitutionally are inevitable if the sector is to remain relevant by 2020, according to new research from Grant Thornton UK LLP. 

Produced in collaboration with the University of Birmingham's Institute for Local Government Studies (INLOGOV), the Vision 2020 report highlights that the economic and financial situation remains “increasingly untenable”, with an expanding north/south divide arising from the pattern of funding reductions and economic growth. 

In the study it says: “The Local Government Association (LGA) anticipates a £14.4bn shortfall in the funding required in 2019-20 and asserts that 60% of councils are no longer able to meet the budget challenge through efficiency improvements. While the Department for Communities and Local Government (DCLG) does not accept the scale of this shortfall, all stakeholders recognise the scale of the financial challenge.” 

Recognising that local authorities throughout England continue to face unprecedented challenges, not just relating to the pressures of austerity and central government funding reductions but also to those of demographic and technological change, the study authors highlight the vital role of a successful local government sector in society and encourage it to continue to think hard about how it will cope in the future. 

Paul Dossett, partner and head of local government at Grant Thornton UK LLP, said: “The pressures local government are under – financial and operational – will magnify exponentially over the next 10 years. 

“With funding reductions due to bite harder and deeper after 2015, and many councils already facing a potential 'tipping point', authorities will need to maintain a relentless focus on transforming the models that have largely served them well over the past generation. 

“For local authorities to remain relevant and able to deliver the services which the public relies on them for, a radical change in thinking is necessary.” 

Launched at the 2014 Solace Summit, the report, informed by the views of a broad range of local authority leaders, chief executives and other sector stakeholders, has identified six potential scenarios for the future of local government: 

  • Adaptive innovation: councils creatively redefine their role and are able actively to affect their operating environment, often working in close partnership with other authorities;
  • Running to stand still: councils are led and managed well and can see a positive future, provided that they can keep up the current pace and that there are no major shocks;
  • Nostril above the waterline: councils are only able to act with a short-term view, their existence is hand to mouth and even a small external change might seriously challenge their viability;
  • Wither on the vine: councils have moved from action to reaction. Their finances and capacity are not sufficient to the task and they are retreating into statutory services run at the minimum;
  • Just local administration: councils have lost the capacity to deliver services, either because they have 'handed back the keys' or because responsibility for significant services has been taken from them; and
  • Imposed disruption: councils are subject to some form of externally imposed change, such as local government reorganisation. 

To view the report in full, click here.

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