Facing up to our financial future

10 Jun 11
Andrew Jepp

Councils are making funding decisions that will fundamentally affect the ethos of their organisations and the structure of their workforces. They need to be better prepared for this leap into the unknown

Research out this week suggests that 40% of local authorities are yet to have their spending cuts plans approved. This indicates that the already daunting requirement to step into the unknown has been larger in practice than on paper. For all local authorities, the key will be to ensure that the short-term decisions they may be making now will have sustainable longer-term gain.

No one can deny that the task of local councils and authorities up and down the country has been unenviable. With no cost-cutting rule book to work through, they have had to take decisions that in many instances have, and will, alter the ethos of their organisation and change their workforce for many years to come. And in several instances these decisions have received considerable resistance.

Birmingham City Council’s decision to outsource IT services abroad last week was met with concerns by unions that this approach would create greater redundancies. A separate report out this week has suggested that cost-cutting will impact local authorities’ capacity to develop and retain future leaders.

These examples highlight how well-considered measures intended to drive efficiency can have a multitude of potentially high-profile repercussions in the future. So, as the government attempts to quell threats and fears of strike action, local authorities must now more than ever consider the longer-term (and possibly longer-lasting) effects of the efficiency drive.

By considering all future implications and taking measured decisions today, local authorities can have faith in whichever path they take. Outsourcing is likely to become inevitable; indeed this week’s research suggests that councils are looking to increase the amount of work they outsource from 20% this year to 34% by 2014.

However, by carefully selecting partnerships and remaining active in the delivery and communication of goals, councils and local authorities can make substantial and effective savings. Likewise, workforce changes can be managed strategically and sensitively to ensure that employees are kept abreast of changing requirements to their roles, while planning for future development and plugging skills gaps.

These decisions have not been easily made and, given their nature, are likely to be challenged along the way. However, local authorities who have taken time to plan for their future will be stronger in clearing the immediate hurdles before them today. Echoing conclusions of this week’s report, councils that undertake a full review of their service delivery will be better-placed to understand where they can find best value solutions for the long and short term.

Andrew Jepp is director of public services at Zurich Municipal

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