Eric Pickles is in favour of some radical ways to cut council spending. But some councils are doing much of this already, and propose even more innovative measures
Communities secretary Eric Pickles has endorsed a report, published by the Taxpayers' Alliance, presenting 201 ways for councils to deliver value for money for taxpayers. It outlines how councils can save hundreds of millions of pounds each year through shared services and other measures.
There are many good ideas in the report, which councils should consider in order to deliver value for money for their residents. In Westminster, we are already achieving some of these proposals and have many other initiatives of our own as well.
We are already sharing services with our tri-borough approach, which will save taxpayers £40m each year by sharing services with our two neighbouring boroughs - the London Borough of Hammersmith and Fulham and the Royal Borough of Kensington and Chelsea.
It has also allowed us to create innovative services that are at the forefront of driving change, reforming public services to improve lives and save public money. The three councils will drive growth, reduce dependency, build homes, create jobs, lengthen lives and rehabilitate criminals.
Our vision is to combine services across specific areas to improve lives and make public funds go further. The focus of Tri-borough has been on reducing back office costs so that front-line services can be protected.
Over the past few years, local government has demonstrated how it is delivering quality services whilst managing and meeting the pressures of reduced budgets. Westminster has, for example, reduced its operating budget by around a quarter since 2010, but has maintained and in many cases enhanced front line services.
We are also looking at alternative ways of financing services in order to deliver savings, such as designing a Social Impact Bond to improve the outcomes from publicly funded services by making funding conditional on achieving results.
Investors provide upfront working capital and then receive payments, including a potential return, based on the results achieved. In simple terms, if we can spend money in a way which reduces crime, then the money saved from not having to deal with the costs of crime can be used to pay back and potentially reward the original investor.
We have also managed to keep our council tax at the lowest level in the country after council tax was frozen for the sixth year in a row.
Yet despite our tri-borough approach and despite the introduction of innovative ways of reducing our budget, the next few years will be equally tough if not tougher. Over the next four years Westminster must take a further £100m out of its budget. In fact, the pressures on public expenditure over the next parliament are expected to be tougher than those faced since the election of 2010.
Central government also needs to play its part to enable a move away from the centrally driven, one size fits all approach. Simply reducing budgets across the board will not suffice.
We believe this could be done through ‘Local Public Service Reform Deals’ where areas or groups of areas should be able to come together and negotiate a specific deal around public service reform with Whitehall, tailored to local needs and requirements.
Running in parallel to this, public sector budgets should be pooled across areas as part of each deal and focussed on local outcomes.
We should also look again at how the business rate regime operates. Despite the recent changes the complex system remains and there is still a lack of incentives for councils to invest in supporting and helping local businesses. We want business rates to be invested in the local area – ensuring Westminster City Council continues to be a champion of enterprise and will mean business demands are addressed at a local level.
We need a proper and equal partnership approach between central government and local government in the form of local public service reform deals and local decision-making that will drive value for money for our residents even further and help us meet the demands of the next few years.
Melvyn Caplan is cabinet member for finance, resources and customer services at Westminster City Council
