Public Sector Focus

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

 County council director and CCG CEO to lead STP in joint-role

22/05/2019 County council director and CCG CEO to lead STP in joint-role

Hertfordshire and West Essex STP has announced a job-share partnership between the local county council and CCG to lead the STP. Iain MacBea... more >
Even ‘draconian cuts won’t be enough’ as councils face £50bn funding blackhole

22/05/2019Even ‘draconian cuts won’t be enough’ as councils face £50bn funding blackhole

Councils in England face a funding black hole of over £50bn across the next six years, according to a new report warning that local authori... more >
Government backs Northamptonshire unitary authorities with one-year delay

15/05/2019Government backs Northamptonshire unitary authorities with one-year delay

The government has formally approved the formation of two new unitary councils in Northamptonshire in 2021, a year later than first planned, also... 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 >
149x260 PSE Subscribe button

the raven's daily blog

Empower your reader, choose print

07/05/2019Empower your reader, choose print

We are on a digital rollercoaster, swirling and twirling through a variety of different online advertising platforms – have we forgotten about traditional marketing platforms such as print? The UK is currently the global leader in advertising, generating £6 for every £1 spent on advertising to the economy. This year, UK ... more >
read more blog posts from 'the raven' >

comment

Cities as places of opportunity

29/04/2019Cities as places of opportunity

Andrew Carter, chief executive of Centre for Cities, asks: if cities are places of opportunity for the low skilled, why are so many struggling? ... more >
Shaping healthy places with district councils

29/04/2019Shaping healthy places with district councils

District councils are achieving excellent outcomes by shifting health solutions from clinical settings to community ones. They have a significant... more >
The road more taken: delivering future connectivity and mobility

29/04/2019The road more taken: delivering future connectivity and mobility

Localis chief executive Jonathan Werran outlines the challenges to delivering future connectivity and mobility, and asks what policy shifts to ho... more >
The state of the Spring Statement

29/04/2019The state of the Spring Statement

Ben Zaranko, research economist at the Institute for Fiscal Studies (IFS), analyses this year’s Spring Statement and looks ahead to the Spe... more >

interviews

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 >
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 >
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 >