Under the axe

The public sector spending axe may be yet to fall, but no local government leader or manager can be under any illusions that it will drop soon. When it does, the repercussions are likely to be very painful indeed and the country’s town halls have, at most, 12 months to plan and prepare for their budgets being slashed by anything from 10-20%.

They are also being charged with making these savings with the minimum possible affect on frontline services and council worker jobs. Is that a circle that can be squared by efficiency saving, back office rationalisation or even plunges into the sketchily chartered waters of Total Place initiatives?

The short answer is that no one knows. A mountain of uncertainty looms over local authority spending and services. The central government grant, which makes up nearly three quarters of council revenue, has been set for 2010-11 at four per cent above the 2009-10 settlement. That sounds pretty generous given the parlous state of the nation’s finances, but will it survive a general election that could see the Conservatives return to power with a pledge for an emergency budget within 50 days of taking office and a commitment to reducing the budget deficit sooner rather than later?

Even if it does survive, what happens when the current settlement runs out in April 2011? Whichever party takes power after the election, the pot of money that central government doles out to local authorities will be substantially smaller than it is now. Neither Labour nor the Conservatives have committed a single figure to writing. Councils are being forced to operate in an information vacuum. They know there will be cuts but they have no knowledge of their depth or direction.

Tightened belts

Local government has been feeling the pinch of the recession for some time now. The fall in interest rates has hit their savings and they are earning less money from services such as leisure facilities. At the same time they have seen costs increase – from the emergency overhaul of children’s care services to dealing with an unexpectedly cold winter.

Birmingham City Council, the country’s largest local authority, hasn’t waited for the axeman’s chop. In February it announced that its shortfall would amount to £69m by April 2011 – before the cuts kick in – and that it was taking immediate steps to balance its books. That could mean, it said, a pay freeze for all workers and up to 2,000 job losses.

The Unite trade union has reacted angrily to Birmingham City Council’s announcement, claiming that Conservative-led councils were showing their true colours by implementing cuts in jobs and services before they were necessary. “It is a con and scaremongering tactics to make people believe that somehow it is alright to accept that much cherished local services, such as their local library or nursery, are now somehow ripe to be targeted for the axe,” said Gail Cartmail, Unite’s assistant general secretary for the public sector.

But it’s not only Conservative local authorities that are forecasting heavy cuts in the near future. Glasgow City Council has drawn up plans for 4,000 jobs to go over the next three years. A BBC survey of 49 English councils employing 265,000 people found that they were anticipating cuts of between five and 20% in the next three to five years, equivalent to around 25,000 job losses. However, if that pattern was repeated right across the country the true figure would be nearer 180,000. Local government commentator Tony Travers of the London School of Economics doesn’t go that far, but does expect that up to 100,000 local authority jobs will be lost in the next few years.

The BBC’s findings are backed up by Leading Change in the Public Sector. ILM surveyed 1,554 public sectors managers of different levels of seniority and found that two thirds of them had experienced budget cuts in the past 18 months and that 90% of them believed that further cuts are likely.

Can frontline services be protected from budget cuts of the magnitude predicted? It seems unlikely, but the Department of Communities and Local Government (DCLG) commissioned a task force led by Sir Richard Leese, leader of Manchester CC, and Sir Steve Bullock, mayor of the London borough of Lewisham, to outline the steps councils should be taking. Their report – Putting the Frontline First – was published on 1 March and can be downloaded from the DCLG website.

Plan of action

Their 10-point plan states:

1 Council services must be focused on the customer. They come first
2 Take a Total Place approach to frontline services
3 Make services more efficient – cut out waste and unnecessary duplication – especially in two-tier areas
4 Check performance against others and learn from who is doing it better
5 Buy goods and services in groups and use that buying power to create local benefits and involve the third sector
6 Reduce the number of council buildings by locating more services together
7 Motivate staff to help to perform to the best of their ability
8 Make managers leaders of innovation to improve services
9 Streamline management. Consider splitting senior posts with other councils or PCTs
10 Share professional expertise and ensure council staff are able to be flexibly deployed.

“Local people will rightly be intolerant if they are told that frontline services will be cut because their council hasn’t done everything suggested on this checklist,” said Communities Secretary John Denham on the report’s publication. “If councils adopt our radical efficiency reforms they can protect our top priority frontline services which matter most to local people.”

For more information on the ILM public sector research, visit Edge online or download the report, view video from the launch and debate the findings at www.i-l-m.com/publicsector