Councils sweat assets to face up to spending squeeze

17 Oct 14
Councils are increasing the commercial use of assets such as property in response to the spending squeeze, a survey of senior managers has found.

By Richard Johnstone | 17 October 2014

Councils are increasing the commercial use of assets such as property in response to the spending squeeze, a survey of senior managers has found.

Zurich Municipal’s Senior Managers Risk Report, based on face-to-face interviews with local authority chief executives and leaders, found reform plans were more advanced this year than last.

Town halls were putting in place plans for ‘progressive and transformative change’, the report found, with commercialism being given greater priority.

Among the areas highlighted in the report, councils are exploring ways to turn capital assets into revenue, such as renting out spare office space, while outsourcing had also grown in importance.

However, the report found stark differences in visions for the future of local government between big and small councils. Whilst both are aware of the need to be more commercially minded, smaller authorities are more focused on shared services, while larger municipalities have sufficient economies of scale to benefit from extensive outsourcing.

There was also no uniform view about the best way to improve service efficiency.

Some councils were developing integrated service delivery plans that do not require a change in the structure and governance, but others felt the current public service delivery infrastructure represented a barrier to integration.

These councils were looking for fundamental change to the way public services are delivered.

Paul Tombs, the head of public services at Zurich Municipal, said important changes are taking place for local authorities across the country.

With the last few years focusing on efficiencies, reductions, re-prioritisations and re-negotiations, this year’s report reveals a step change in the way councils and political leaders are hoping to bring about positive transformative change.

‘Councils are now putting last year’s thoughts into action. With fulfilling promises and plans far harder than making them, councils now also face the tumultuous challenge of the new health and social care changes, whilst the political distraction of a general election may knock some ambitious projects off course.’

As councils implement even greater reforms in the years ahead, they must demonstrate how they are proactively managing risks, as authorities must show they equipped for change to maintain public confidence, he added. 

The report was produced in association with the Society of Local Authority Chief Executives, and director Graeme McDonaldsaid councils were taking ‘innovative steps to improve their services and deliver in the most efficient way possible’.

However, this is rarely possible on their own, he added. ‘Councils don’t work in isolation and increasingly work with a range of public, private and community sector partners to achieve their aims.

‘The ability to flex our responses to local circumstances, to prototype solutions, and share learning has enabled the sector to respond progressively to the challenge of austerity. While risks are there, the rewards are great. And there is still much to do.’


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