By Richard Johnstone | 12 June 2014
More than half of council leaders believe some local authorities will fail to deliver the essential services residents require within the next year as the impact of government spending cuts increases, a poll has found.
In PwC’s annual The local state we're in report, a survey of 125 council leaders and chief executives across the UK found two-thirds of leaders said they expected some councils to get into a ‘serious financial crisis’ this year. Over these, over half (53%) expected it to lead to failures in the delivery of essential services.
However, the proportion of chief executives who expected authorities to get into serious financial crisis over the next 12 months was lower at 35%, of which 29% saying they expected this to lead to a failure to deliver essential services.
Jonathan House, a member of PwC’s local government team, said council leaders’ confidence in protecting frontline services was crumbling in the face of sustained financial and service-delivery pressures.
‘While in previous years, leaders and chief executives thought it would be others who would end up in financial crisis, this year for the first time they are more significantly concerned about their own financial context.
‘It’s to the sector’s credit that they have managed the scale of savings to date, with only half the public aware of any reductions or cuts in services. We are increasingly seeing councils question their existing business model for delivering services and getting the job done, and that will need much smarter approaches to technology, partnering and delivery.’
It was becoming increasingly clear that two-tier local government was unsustainable in its current form, he added, but there was little appetite for top-down local government reorganisation. Only 48% of leaders and 38% of council chief executives believe there will be significant reform of local government over the course of the next parliament
‘In the near term, it’s up to counties and districts to work together to create an alternative future for themselves, and quickly,’ House said.
‘The question remains however, whether these collaborations or shared service approaches can deliver the scale of the cost savings needed.’
The poll also found that infrastructure investment, skills and housing were the top three barriers to growth identified by councils.
Although town halls said both the New Homes Bonus and the local business rate retention scheme were positive initiatives, they were keen for further freedoms to allow them to boost local growth. Greater control of business rates, as well as levying and retaining other property taxes, were among the powers sought.
Responding to the poll findings, Sharon Taylor, the chair of the LGA’s Finance Panel, said: ‘Councils have worked hard to shield residents from the impact of cuts in recent years, but with another £10bn worth of savings still to be found, options are fast running out.
‘Local government has led the way at improving and modernising the way we do things through sharing services and becoming ever-more efficient. But further cuts will lead to fewer and poorer services unless government commits to a new way of working.
‘Government needs to find a better way of ensuring public money gets to the frontline where it is most needed and doesn't get lost in the maze of Whitehall.’
