On Monday it was announced that councils in England are to face a 9.9% cut in core funding next year – the first stage of a process to reduce council budgets by 28% over four years.  So how might councils respond to this challenge?

Councils are required to deliver some services by law, however they typically provide a host of complementary services which are not legally required.  So one response could be to stop providing the non-statutory services.  But there are problems with this approach:

… cutting non-statutory services may look like a quick fix. But [...] services such as parks, leisure, local environment, school meals, and recycling and community safety are vital pieces of one big public service jigsaw. Any short term gain will undoubtedly create far greater long term pain as poor health and obesity, anti-social behaviour, neighbourhood decline and environmental degradation follow – all of which have huge economic as well as social costs.

Source:  Radical surgery for local government services?

An alternative approach is to increase efficiency, enabling councils to continue to deliver the current range of services at a reduced cost.  Techniques for achieving this include:

• Systems thinking – reviewing internal business processes and cutting out the waste, ensuring that every ounce of resource available is devoted to adding value for the customer.
• Investment in technology to automate manual tasks – as councils are part of the service industry, staff wages form a large component of overall operating costs.  A technology investment can increase organisational productivity enabling a reduced head count, however technology driven business change projects are rarely straightforward, and government doesn’t have a great track record in this area.

The third approach is to harness the power of the big society.  Some councils are attempting to do this (in part) by becoming commissioning organisations.  The theory is that rather than simply relying on councils to deliver local public services, the load is spread by increased collaboration between councils and other third, public, and private sector organisations.  By pooling resources to target agreed shared outcomes, councils should be able to serve the community in a more cost effective manner.

Whichever response councils opt for, it’s certainly not going to be an easy ride.