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Over 80% of council CEOs believe essential services at risk

Over 80% of local authority CEOs believe that some councils will fail to deliver essential services in the next three years, according to a new survey.

The 2016 Local State We’re In survey from PricewaterhouseCoopers (PwC) also found that  86% believed some local authorities will get into serious financial trouble in the next three years, and 56% believed some will face a financial crisis in the next twelve months.

Chris Buttress, PwC partner and local government leader, said: “There is real shift in emphasis this year – a focus away from delivering ‘cuts’ towards making interventions that underpin regional economic ‘growth’ and public sector reform. However, leaders and chief executives also recognise the magnitude of the financial struggle and the necessity to find solutions, as the shift continues from grant reliance to self-sufficiency.

“Consequently, as we look towards 2020, we are expecting to see some fundamental changes in the way local public services are delivered. As that journey continues, councils need to ensure that they have the capacity and capability to match their ambition in order to deliver on new opportunities while managing new risks.”

In addition, while 64% of chief executives believed they could make the necessary financial savings over the next 12 months without seriously impacting the quality of service delivery, only 13% believed they could continue this for the next three years.

The survey also found that although 84% of respondents said that further integration of health and social care would have a positive impact on health outcomes for the local population, only 34% thought it would deliver savings for the council.

Jonathan House, a PwC partner and local government leader in the north, said that more councils needed to take an active role in delivering sustainability and transformation plans and anticipating the role of the NHS and Department of Health in local government reorganisation.

Although the government’s promises of greater devolution are intended to partially compensate for funding shortages, chief executives’ and council leaders’ faith in devolution as a solution to their problems was declining, with 20% of all respondents feeling confident that they would have more powers and responsibilities by 2020, compared to 33% in the 2015 survey.

In addition, while 69% believed they would be part of a combined authority by 2020, only 36% believed their anticipated combined authority would be overseen by an elected mayor.

House said: “The ‘devolution revolution’ is becoming more ‘evolution’ as the pace and depth varies greatly across the country.”

Less than half (42%) of chief executives felt their council was prepared for the shift to business rates devolution, and only 48% were confident in their approach to digital security, which Socitm predicted recently will become an increasingly serious problem for local government.

The 2016 State of Local Government Finance report, conducted by think tank the Local Government Information Unit (LGiU), also found councils warning that they would have to cut services despite gaining devolved powers.

Public faith in councils declines

PwC also surveyed members of the public, and found confidence in local government has declined as a result of spending cuts, with only 31% saying they accepted the need for cuts to local services, compared to 47% in 2011.

In addition, only 16% thought their council had become more efficient in the past five years and 50% felt uninformed about cuts in their local area.

Since 2014, public confidence in their council’s ability to use new technology has declined from 29% to 23%, while just 30% trust local government to handle their personal data, compared to 35% in 2015.

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