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Only one in ten council chiefs confident of saving front-line services, study finds

Only one in ten council chiefs confident of saving front-line services, study finds

🕔26.Mar 2015

Only one in ten local authority chief executives are confident their council can protect front-line services in the face of continued austerity over the next five years, according to a national survey.

PwC’s annual study of local government leadership, ‘Local State We’re In 2015’, asked over 100 council bosses and leaders of local authorities across the UK about the challenges facing local government and their responses to them.

While seven out of ten remain relatively confident of their ability to manage savings in the short term, when asked about the longer term only one in ten thought they would be able to carry on delivering front line services.

The findings reflect the views of Birmingham city council chief executive Mark Rogers who told Chamberlain Files this week that he doubted whether there would be enough money by 2020 to continue operating all statutory services.

Birmingham, Britain’s biggest city council, will have to find savings of about £830 million between 2010 and 2017 as a result of the Government’s grant-cutting austerity policy.

The spectre of financial failure across the sector looms large in the PwC survey, with nine out of ten chief executives believing that some councils will get into serious financial difficulties in the next five years.

Four-fifths of  respondents believe that some local authorities will be unable to afford to deliver the essential services residents require in the next five years.

Repair of roads and pavements, street lighting, refuse collection and libraries are the areas the public are most concerned about the impact of future cuts, according to the study.

PwC said:

Five years on from our original ‘Local State We’re In’ survey, councils have been successful in managing the significant cuts to date. But local authorities are now facing challenges on all fronts.

Financial pressures continue while demand and public expectations grow with the way ahead being challenging, but full of opportunity that the sector has the confidence to tackle and face.

The survey found that chief executives and leaders have recognised the need to do things differently, looking beyond their organisational boundaries and taking a place-based, whole systems approach to solving the challenges of growth and reform in their areas.

Partnership working has also risen up the agenda as the realisation grows that councils cannot operate in isolation. Nearly half (47%) of leaders and chief executives believe their council will be part of a combined authority by 2020.

But despite the apparent momentum behind decentralisation, only a fifth (22%) agree that their council will have significantly more powers and responsibilities by 2020.

Three quarters of respondents also agree their focus should be on outcomes, rather than service delivery, but less than half know how to make this a reality in practice.

Embracing the potential of digital and data analytics to transform services will be critical over the five years of the next parliament as will grasping the opportunities offered by decentralisation.

Chris Buttress, PwC partner and local government leader said:

It is clear, speaking with council leaders and their chief executives, that councils are now considering more radical options – from rethinking relationships with customers and communities and better use of digital technologies, to deeper collaboration with partners.

The business model of the public sector is changing rapidly as decision makers are considering what is the role of the public sector within a local area.

PWC believe data analytics and business intelligence will be 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.

There continues to be a wide gap between council expectations and the public view – while 66 per cent of Leaders agree their council is confidently embracing the opportunities new technology offers, only 28 per cent of the public agrees.

Economic growth is another key priority for local authorities, with many leaders and chief executives identifying the local economy as their number one priority for the next five years. Just over three quarters of chief executives and leaders agreed that LEPs are key partners for growth which is up from 50 per cent in 2013 suggesting local authorities increasingly recognise the important role played by Local Enterprise Partnerships.

Mr Buttress added:

Local authorities have largely responded well to the budget gap of the last four years. They are now anticipating having to do the same again, with less and less certainty of how to achieve this. We have no doubt that the future business model for public services will change significantly in the next four years – and those leading the sector in localities will be the ones who will deliver this new model – changes won’t all necessarily be centrally driven.

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