An alternative to financial Armageddon

With the comprehensive spending review less than a week away (21 October), local government is bracing itself for the worst. No one doubts the severity of what's in the offing, with cuts of at least 25% and possibly a lot more expected. The temptation to panic and take an axe to services is all too understandable. But, in my view, panicked solutions will help no-one – least of all the people who rely on public services day in day out. With the public and private sectors so closely entwined – our research shows that £1 of council spending can generate £1.64 in local economies – drastic measures could also destablilise fragile economies and increase pressure on services and budgets that remain. The Association for Public Service Excellence (APSE) represents councils providing frontline services across the UK and the theme of our annual conference in Derry, Northern Ireland, last month was how councils can deliver savings through 'managed transformation not financial Armageddon'. This is not just naive optimism; we have been building strong case study evidence of how such transformation can be achieved. Use of technology to modernise services The transformation of Newcastle's city service, for example, has resulted in £28m net savings over the past decade and a 91% customer satisfactions ratings. Wakefield's use of technology to modernise services, improve productivity through mobile working and enhance access to services has yielded £1.7m a year revenue savings. Cornwall county council is aligning its transformational strategy with its commitment to climate change and stimulating a 'green economy', as the authority's director, Stephen Cirell, will tell our conference delegates. Elsewhere councils are sharpening up procurement practices, so that every taxpayers' pound has the maximum impact on local communities and economies. Councils are making savings through collaboration, such as three counties in central England delivering efficiencies savings of £500k a year by joining up professional services for highways departments. Three authorities in Scotland have set up a joint trading arm, which has generated a £11m surplus. At the micro level, councils are examining activities such as catering and cleaning in detail to see where 'lean' approaches can be applied, pounds can be shaved and productivity boosted further. Our latest survey found 80% of local authority managers recognise the need to achieve 'more for less' is now critical and 90% consider that performance management is still a key driver. It found that 87% recognise the crucial role that technology has to play and 81% believe that any approach to service transformation must be sustainable in the long- term. Our conferences and briefings over the past six months have urged authorities to learn from each other how transformation can be achieved in preparation for the spending squeeze. And the list of examples shows there is an alternative to financial Armageddon; one that involves the workforce and service users as well as councillors and officers in developing sensible, long term solutions. The case studies we have been highlighting have not been without the pain of some redundancies and radical cultural shifts. And further efficiencies will obviously be difficult on top of the £3bn-plus gains already delivered. We are certainly not advocating that councils ignore the problem and hope it goes away. We are suggesting examining carefully how services are performing, what future community needs might be and how these can be met through improving existing services in the first instance. There may be more painful change further down the line in some cases, but taking the long view can help maintain local control and capacity and manage a gradual shift. Local government does have the ability to transform itself from within. It has adapted and survived to meet challenges thrown up by CCT, Best Value and the Gershon efficiency agenda over the past two decades. It can re-invent itself again in response to the worst threat yet if councillors and officers have the courage to take a cool-headed approach. Paul O'Brien is chief executive of the Association for Public Service Excellence