By John Pittam
21 October 2010
Conventional efficiency measures clearly will not be enough to close the funding gap. The task will be to get cash out of the bottom line rather than recycle it to meet additional costs and pressures. So councils will be working hard to reduce their staffing and procurement costs and make better use of their assets.
Productivity will become the new mantra. Local authorities will have to improve outcomes for residents and maintain service quality with fewer resources. This will be easier said than done, especially if the Spending Review measures do not lead in the long run to more devolution of power to the local level.
The Local Government Group has set up nine productivity ‘work streams’ – or teams – to make a contribution to that debate (see panel). The Place-Based Productivity Programme aims to:
The hope is that this work will help councils and local partnerships understand their costs better and find new ways of coping with reduced budgets. Some of the teams have been asked to produce specific results quickly. Others are likely to take a year or more to look at the bigger, demand-led spending areas such as adult social care, children’s services and waste.
Some ‘quick wins’ are being worked on and it is hoped that these can be announced at a national conference on December 3. A practical example is the ‘Tell Us Once’ programme developed between councils and the Department for Work and Pensions. This allows people to report a birth or bereavement at the first point of contact and for this to be used across government to update their status and benefits. This approach saves both time and money for the individual as well as local and national services.
Another quick win will be in the form of a ‘top ten’ document that signposts councils to the best procurement deals around. This is essential for two reasons. First, it is highly topical, bearing in mind criticisms of central government procurement. But it is also because typically 50% of spending – roughly £50bn – can be through third parties, on areas such as asset management, corporate support services, social care and waste.
For social care, the priority will be to try to demonstrate what a good local care system might look like. But good practice alone will not be enough, as even a 10% improvement in performance will not match the cost of the 4% per annum demographic growth faced by the service, let alone reduce existing costs. So the team working on this issue will liaise closely with the Association of Directors of Adult Social Services and the Department of Health. The aim is initially to come up with some ideas on longer-term service changes needed and to identify any barriers to change.
These will be tough times for chief financial officers in local government and for all accountants. Changing the way we deploy people, buildings, systems and money needs better data than is often available. Many local authorities do not have access to the real-time cost data and analysis that is common in the private sector. The data and transparency team is seeking to tackle some of these issues and any thoughts and contributions will be welcome. Indeed, there is a need for accountants to get involved in the work of the teams.
CIPFA and the treasurers’ societies are working hard on the new skills and competencies needed as the emphasis in local government swings towards self-regulation and improved productivity. Better commercial, commissioning and procurement skills, and the ability to use data to improve productivity and align spending levels to desired policy outcomes, will all become more important.
Over time, the teams will join up to provide a more holistic, streamlined approach and members will need to become more involved. Alongside this, the Local Government Group is consulting the sector on creating a framework for self-regulation and developing complementary support for productivity.
David Parsons, chair of the LGA’s Improvement Board, has said that one of the reasons for the programme is to prove that local councils can work collaboratively to manage their own productivity, without the need for externally imposed measures. That is a challenge in itself. Local government is going to have to manage its own productivity improvements, maintain high-calibre leadership and build capacity and capability into the programme.
All this is happening at a time of great change. The system of external inspection and top-down performance management that is being abolished took more than a decade to develop. As Parsons has put it: ‘We may now be at the start of a new way of working. It is unfamiliar, difficult and unproven. Until there are some results, it’s easy to feel cynical that it might not add value.’
However, he adds: ‘Over the next decade, transparency, self regulation, collaboration and localism will see councils finding new ways of doing business based on what the public say and their own judgement on what’s needed locally.’
The success of the scheme will be demonstrated by councils using best practice to save money by working together. The expectation is that this in itself is a better way forward than the more costly options of government review, performance measurement and inspection.
It won’t produce all the savings councils will need to find, but it will be a nudge in the right direction. And it will happen in advance of wider large-scale changes in the way services are provided within a much-reduced funding regime. It won’t work in isolation and will need to build links with complementary approaches and programmes, including those developed by CIPFA.
Jon Pittam is interim director of productivity at the Local Government Improvement and Development agency. For more information about the programme, to contribute ideas or set up links, email [email protected]
21 October 2010
For those battling with increasing demand and shrinking budgets, raising productivity seems to be one of the least painless solutions around. But how to achieve it? The Local Government Group is on the case. Jon Pittam reports
In the run-up to this week’s Comprehensive Spending Review, the Local Government Association warned that frontline council services could face an annual funding gap of up to £20bn by 2015 if budget cuts were imposed without reforming the public sector.Conventional efficiency measures clearly will not be enough to close the funding gap. The task will be to get cash out of the bottom line rather than recycle it to meet additional costs and pressures. So councils will be working hard to reduce their staffing and procurement costs and make better use of their assets.
Productivity will become the new mantra. Local authorities will have to improve outcomes for residents and maintain service quality with fewer resources. This will be easier said than done, especially if the Spending Review measures do not lead in the long run to more devolution of power to the local level.
The Local Government Group has set up nine productivity ‘work streams’ – or teams – to make a contribution to that debate (see panel). The Place-Based Productivity Programme aims to:
- > identify existing good practice and ‘tried and tested’ methods to support councils in making productivity gains
- > help councils and their local partners develop the benchmarking and unit cost information needed to drive greater efficiency
- > help councils and partners develop new models of service provision
- > demonstrate that local councils can do this for themselves.
-
The hope is that this work will help councils and local partnerships understand their costs better and find new ways of coping with reduced budgets. Some of the teams have been asked to produce specific results quickly. Others are likely to take a year or more to look at the bigger, demand-led spending areas such as adult social care, children’s services and waste.
Some ‘quick wins’ are being worked on and it is hoped that these can be announced at a national conference on December 3. A practical example is the ‘Tell Us Once’ programme developed between councils and the Department for Work and Pensions. This allows people to report a birth or bereavement at the first point of contact and for this to be used across government to update their status and benefits. This approach saves both time and money for the individual as well as local and national services.
Another quick win will be in the form of a ‘top ten’ document that signposts councils to the best procurement deals around. This is essential for two reasons. First, it is highly topical, bearing in mind criticisms of central government procurement. But it is also because typically 50% of spending – roughly £50bn – can be through third parties, on areas such as asset management, corporate support services, social care and waste.
For social care, the priority will be to try to demonstrate what a good local care system might look like. But good practice alone will not be enough, as even a 10% improvement in performance will not match the cost of the 4% per annum demographic growth faced by the service, let alone reduce existing costs. So the team working on this issue will liaise closely with the Association of Directors of Adult Social Services and the Department of Health. The aim is initially to come up with some ideas on longer-term service changes needed and to identify any barriers to change.
These will be tough times for chief financial officers in local government and for all accountants. Changing the way we deploy people, buildings, systems and money needs better data than is often available. Many local authorities do not have access to the real-time cost data and analysis that is common in the private sector. The data and transparency team is seeking to tackle some of these issues and any thoughts and contributions will be welcome. Indeed, there is a need for accountants to get involved in the work of the teams.
CIPFA and the treasurers’ societies are working hard on the new skills and competencies needed as the emphasis in local government swings towards self-regulation and improved productivity. Better commercial, commissioning and procurement skills, and the ability to use data to improve productivity and align spending levels to desired policy outcomes, will all become more important.
Over time, the teams will join up to provide a more holistic, streamlined approach and members will need to become more involved. Alongside this, the Local Government Group is consulting the sector on creating a framework for self-regulation and developing complementary support for productivity.
David Parsons, chair of the LGA’s Improvement Board, has said that one of the reasons for the programme is to prove that local councils can work collaboratively to manage their own productivity, without the need for externally imposed measures. That is a challenge in itself. Local government is going to have to manage its own productivity improvements, maintain high-calibre leadership and build capacity and capability into the programme.
All this is happening at a time of great change. The system of external inspection and top-down performance management that is being abolished took more than a decade to develop. As Parsons has put it: ‘We may now be at the start of a new way of working. It is unfamiliar, difficult and unproven. Until there are some results, it’s easy to feel cynical that it might not add value.’
However, he adds: ‘Over the next decade, transparency, self regulation, collaboration and localism will see councils finding new ways of doing business based on what the public say and their own judgement on what’s needed locally.’
The success of the scheme will be demonstrated by councils using best practice to save money by working together. The expectation is that this in itself is a better way forward than the more costly options of government review, performance measurement and inspection.
It won’t produce all the savings councils will need to find, but it will be a nudge in the right direction. And it will happen in advance of wider large-scale changes in the way services are provided within a much-reduced funding regime. It won’t work in isolation and will need to build links with complementary approaches and programmes, including those developed by CIPFA.
Jon Pittam is interim director of productivity at the Local Government Improvement and Development agency. For more information about the programme, to contribute ideas or set up links, email [email protected]
