Local authority resource management – is there a better way?

5 Feb 24

This year is shaping up to be another difficult one for UK councils. Ian Owen, public sector industry director at TechnologyOne, believes that more joined-up enterprise solutions, as widely used by councils in Australia, could provide a valuable best practice model for embattled CFOs here in the UK.

Ian Owen

Ian Owen, public sector industry director at TechnologyOne

Things are rather grim for local councils. Late in 2023 it was reported that one in 10 county and unitary authorities was not sure if it could balance its books.

More recently, the Local Government Association warned that one in five local authorities is likely to succumb to bankruptcy within the next 12 months.

While every council’s fiscal circumstances are different, I think a fundamental lack of financial visibility is making tough economic times even worse for councils.

And after a decade of austerity putting pressure on budgets, it often feels like well-intentioned councils are driving at speed down the road, not realising they are about to hit a ‘Section 114’ brick wall, until it’s too late.

Be it rising children’s care costs, property deals gone wrong or under-performing investments, too many council leaders do not appear to have systems in place to flag impending financial disaster. They’ve got their foot on the accelerator, but don’t have a speedometer.

I recently returned from a trip to Australia, where TechnologyOne was founded, to see how councils there are using modern ERP technology to cut costs and better serve their communities.

And while digitisation cannot solve the huge structural problems facing the UK – funding cuts, increasing costs and greater demands on services – it can provide local government with vital efficiency gains and the visibility they need to operate what are often hugely complex operations.  

Local councils in Australia are facing many of the same issues as their UK cousins, albeit on a smaller scale.

The big difference between local government bodies in Australia and the UK is their attitude towards the use of technology – specifically what’s known as SaaS or Software as a Service.

While the majority of UK councils are still using fragmented, on-premise systems to run their finances, property, human resources, payroll and services, councils down under, such as Shoalhaven (on the south coast of New South Wales) and Wollongong City Council (south of Sydney) have adopted single more comprehensive ERP SaaS systems, which can typically cut operational costs by up to 20 per cent.

More importantly, the adoption of this joined up technology allows them to manage their operations to the benefit of their taxpayers. 

Wollongong City Council is a typical advocate of digitisation, having adopted SaaS ERP back in 2021.

Prior to the move, the council was operating 400 ‘best-of-breed’ applications, which all needed attention and management. Like many UK councils, they were just managing to keep the lights on, not really satisfying the needs of the community.

Having ditched its numerous legacy systems, Wollongong no longer spends time undertaking constant software upgrades, disaster recovery upgrades or bug fixes – these are all undertaken centrally by their vendor.

Now, they are no longer focusing on applications. Instead, the council is free to deliver what its citizens want on a daily basis.

It’s a kind of liberation, with council officials free to be more creative. A great example of this is the ability to explore solutions to a recurrent flooding issue faced by the city. Using digital technology, the council is currently employing sensors to identify drainage issues and raise work requests before they become problems.

Another east coast council, Shoalhaven, is harnessing AI technology linked to its cloud-based system to maintain roads and paths, improving safety and reducing accidents.

Here, cameras attached to bin lorries monitor the condition of roads as they go about their usual routes, significantly reducing inspection time. This is a seamless solution that is linked to the council’s SaaS system, automatically raising a work order when a pothole is detected by the cameras, making the process incredibly efficient.

Some UK councils are adopting similar monitoring technology, but this is usually a “bolt-on” extra, which is not always integrated or linked to their finance and operational teams or requires costly integration and maintenance. 

Adopting this new breed of ‘shared platform’ technology is also helping councils down under combat the scourge of cyber-attacks. According to the insurance firm Gallagher, UK councils were hit with an astonishing 2.3 million attempted IT security breaches in the first eight months of the year. And this trend is likely to double this year, if the experience of Sefton Council is any indication. 

In March, the authority revealed it was fending off 30,000 cyber attacks a month, 50% up on the rate in 2022.

In Australia, councils’ digital defences are not impregnable, but once again, the adoption of a single enterprise model provides far stronger defences. According to Webber Insurance, which monitors data breaches in Australia, during 2023 not a single council had experienced a successful cyber-attack. Draw your own conclusions. 

Besieged UK councils are facing an understandable conundrum. They know they are running on legacy solutions, some developed pre-internet, but simply can’t afford to invest in new technology. Indeed, while many in local government recognise the need to address these issues, others still feel there are more pressing demands for limited budgets than spending on new IT systems. 

One good example of a UK council that has made the transition to a joined-up, ERP SaaS solution is Blackpool Council. Having adopted our OneCouncil platform in 2019, Blackpool Council can now rely on the information their software produces, giving them access to a live, single source of truth.

The speed of the information available helps the council model various scenarios depending on different future funding scenarios enabling the council to be prepared, no matter what the future holds.

As councils are constantly asked to do more with less, digital transformation is the key to the conundrum. Sadly, things will only get worse, not better, unless CFOs and CIOs in councils grasp the nettle, challenge the status quo and look at modern, more holistic and more affordable alternatives to the traditional ERP models to help them to manage their organisations.

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