Councils are being squeezed in all directions and still have services to run. But better use of data and IT can cut costs and the administration burden
the combination of the drastically reduced ‘formula’ grant for local government and the decentralising Localism Bill suggests that the government expects council finance chiefs to act even more rapidly on savings, as well as supporting further changes in local service provision and governance arrangements.
With no apparent pause for breath in this administration’s emerging reform agenda, local authorities must look beyond conventional efficiency drives in adapting to the provision of citizen-centric and sustainable services.
Of course, the Localism Bill had interesting decentralisation and community empowerment themes, including giving residents a right of challenge on local services and greater say on public finances. While this is a potentially transformative reading of local powers, it has to be viewed as part of a wider and familiar trend.
Once again, local government is being ‘squeezed at both ends’ – a central government armlock and the expectations of local communities.
So however much the localism agenda moves forward, the immediate and overriding task of local government and its partners remains. They will have to rapidly re-engineer the economics of service provision to bridge yawning funding and service gaps as the 27% reductions hit home.
This unprecedented situation demands renewed efforts by local authorities to understand their community’s demands and then adapt service models at the corporate and departmental service levels. Only by taking this tough approach can both the necessary savings and profound change in local service costs be brought about within the very tight schedule demanded by this government.
The answer lies in changing existing thinking to enable faster and more intelligent service interventions by departments that are currently constrained by administrative and reporting burdens. The focus for authorities is equally on the number and productivity of staff, to provide essential services with fewer, and more mobile, resources.
Public sector bodies can make better use of significant, yet often ‘locked up’, stores of community data. This information can be harnessed to develop services and channels that let organisations interact more effectively with the public at greatly reduced unit costs.
Civica’s work on pilot programmes has led us to believe that authorities can design and implement strategies for rapid campaigns that focus support only on the needy and draw on ‘fast track’ administration. We drew this conclusion from our work in areas such as benefits entitlement. Many senior executives are familiar with the argument that 80% of resources are consumed by 20% of benefits claimants – could the real figures be more like 90:10 in certain areas of local government, highlighting scope for far greater savings?
Civica knows that councils can achieve this type of breakthrough by working closely with partners, such as expert providers in customer data, and through business process improvement and technology-enabled service provision. For example, parts of local services could be migrated towards secure electronic portals, allowing basic administration, such as change of circumstances details, to be handled by residents themselves. This would help lift the administrative burden on departments such as benefits and target services more closely at those in need.
Once such strategies are in place – in many cases, the first steps could be small scale and short term, to test a business case or show early savings – the authority will be better placed to enact larger-scale service reform programmes.
This could include strategies such as:
> Intelligent harnessing of detailed information to deliver predictable spending
> Flexible outsourcing of services based on demand-driven models
> Productivity improvement based on innovative and IT-enabled ways of working
> Re-engineering processes to lift administrative burdens and duplications of effort and resources
Once implemented, these scalable reform programmes – in benefits and other core functions – will greatly change the economics of service provision. They will also allow the diversion of further resources to frontline service to a degree and at a pace that many communities need.
The spending settlement dominates local agendas but new service models that transform service and cost are the key to squaring this circle.
Bill Loughrey is managing director, local government & regulated markets, Civica
