A Settlement for the short term

19 Dec 12
Jonathan Carr-West

Eric Pickles reiterated how councils can save money when he announced today’s Finance Settlement. But the elastic can only stretch so far and the inevitable consequence is the adoption of short-term coping decisions rather than a long-term strategy

Councils may feel like they are victims of their own success today. As Eric Pickles acknowledged in the House, local government is by far the most efficient part of the public sector. It has driven down costs year on year and absorbed massive spending cuts over the last two years while largely protecting front line services.

But no good deed goes unpunished. The communities and local government secretary outlined years of further austerity from 2014/15, with a minimum spending reduction of 2% (and up to 9% for some councils) in that year on top of existing cuts.

There are certainly still ways in which councils can cut costs and Pickles outlined many of them: from merging back offices, to improving council tax collection, but many will feel that the elastic can only stretch so far.

I’ve written for the PF Blog before about the dangers of councils becoming financially unviable and the reality of further cuts is that many more councils will fall into this category and many others will reduce services down to a statutory core.

The aggregate effect of this will be to drive a reorganisation of local government as councils seek to consolidate their financial standing through mergers and a wholesale renegotiation of the range and type of services that local government is able to offer.

This is not a bad thing in and of itself; significant socio-economic changes may well mean that over the long term councils need to shift from service commissioning to managing demand and building people's capacity to look after themselves. This transformation is hindered rather than helped, however, by further cuts that are likely to lead to short-term coping decisions rather than long-term strategy.

This seems scant reward for the progress councils have made over the past decade in improving efficiency and service commissioning.

Local government is full of inventive, committed people, both elected members and council workers. No doubt they will return to their desks in January full of determination to continue serving communities across the country as best they can, but as the holidays approach they may be forgiven for feeling a little less festive sparkle.

Jonathan Carr-West is director of the Local Government Information Unit

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