By Richard Johnstone | 18 June 2012
Local Government Secretary Eric Pickles has said councils could save billions by merging services after three London boroughs today confirmed they will save £40m a year by co-operation.
Westminster City Council, the London Borough of Hammersmith & Fulham and Royal Borough of Kensington & Chelsea revealed that they would save £7.7m this financial year. This would increase to £33.4m by 2014/15 and £40.3m by 2015/16.
The boroughs agreed to merge a host of services in June 2011, and today’s One year on progress report shows that services worth £300m are being shared.
The boroughs intend to reduce management costs by half by 2015/16. Already, 62 senior and middle management posts have gone in the three areas initially combined – children’s services, adult social care and libraries. This represents a 45% reduction in senior and middle management.
Kensington & Chelsea and Hammersmith & Fulham also share a chief executive in Derek Myers, who was appointed last October. The two councils have also combined their environmental services.
Pickles said the approach was ‘testament to the innovation and forward thinking’ of the three councils, and urged other town halls to join them in working together.
‘No council should even contemplate cutting services before they have considered following this example of how to join forces with neighbours to share back-office services, procure better, slash in-house management and cut overhead costs,’ he said.
‘Potentially £2bn of taxpayers’ money could be saved if other councils were able to copy such sensible savings across the country.’
Sir Merrick Cockell, leader of Kensington & Chelsea and chair of the Local Government Association, added: ‘It is up to other councils to decide whether combining services makes sense. Many have already gone down this route. We are anxious to share our learning and experiences to help them in their future thinking.’
Nicholas Botterill, leader of Hammersmith & Fulham, added: ‘A year ago our plans were seen as radical, now they are seen as commonsense. Sharing costs, overheads and expertise is not only bringing down the cost of delivering services it is leading to better and more effective services.’
The three councils are pioneering work as one of the government’s four whole place Community Budget pilots.Both Westminster and Hammersmith & Fulham are also introducing neighbourhood budget schemes in Queens Park and White City respectively.
Philippa Roe, leader of Westminster City Council, added: ‘Sharing services is not just about reducing cost, important as that is in this age of austerity, it is about improving lives and innovation.’
