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Essential services ‘at risk’ if Osborne austerity continues, town hall chiefs warn

Essential services ‘at risk’ if Osborne austerity continues, town hall chiefs warn

🕔09.Jun 2016

Most town hall bosses believe their councils will fail to deliver essential services at some stage in the next three years if the Government’s squeeze on local authority spending continues.

Eight in ten chief executives quizzed in PwC’s local government survey said they expected to get into serious financial difficulties and would be faced with axing mainstream services.

PwC’s sixth annual survey, the Local State We’re In 2016, asked nearly 100 chief executives and local authority leaders across the UK about the challenges facing local government and their responses to them.

The survey found that, against a backdrop of continued fiscal austerity from the Chancellor, a majority of chief executives (64%) were confident of making necessary financial savings over the next year without seriously impacting the quality of service delivery.

However, when asked whether this was possible over the next five years, only 13 per cent believed they could maintain service delivery in the face of expected financial constraints.

Birmingham city council, Britain’s largest public body, faces saving a further £250 million from its budget over the next four years on top of about £700 million already cut since 2010.

The PwC survey also uncovered growing doubts about Government promises on devolution.

Only a fifth of chief executives thought their councils would receive additional powers and budget, down from almost a third in 2015.

Key findings of the survey include:

  • 84% of chief executives and council leaders agree that further integration of health and social care will have a positive impact on health outcomes for the local population, yet only 34 per cent believe integration will deliver savings for their council.
  • Less than half of chief executives (48%) are confident in their approach to digital security.
  • Less than half of councils are prepared for the shift to business rates, with council leaders slightly more confident than chief executives on this point.
  • Only 16 per cent of the public believe their council has become more effective over the past five years, with 31 per cent – down from 47 per cent in 2011– willing to accept the need for reductions or closures.

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.

The study also uncovered concerns around the shift to the 100 per cent retention of business rates as a funding model for councils from 2020.

The overwhelming majority of council leaders and chief executives believe they should have more control over business rates, but only 42 per cent of chief executives acknowledge that their council is prepared for the shift.

The survey also looked at the public view of the local government and found that less than a third of the public (31%) now accept the need for closures and reductions to service or facilities in their local area.

This proportion has steadily reduced over the past six years (47% in 2011) demonstrating the public’s diminishing confidence in their local authority, according to PwC.

Other key findings showed that the public want to be more informed about the need for closures and reductions with half feeling uninformed. Less than a fifth of those surveyed think their council has become more efficient and effective.

Confidence that local authorities are embracing the opportunities that new technologies offer is slowly rising among leaders. However that confidence is not reflected in the public opinion, which has decreased over the past two years from 29 per cent to 23 per cent.

Equally the public’s trust in local government to handle personal data stands at just 30 per cent, a decrease of five per cent since 2015.

Mr Buttress said:

Data analytics and business intelligence will be more and more critical for councils in the next five years: intelligent analysis of their data will help them form new priorities, smarter interventions as well as better, more informed choices and efficient ways of working.

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