Council leaders’ confidence and public's patience crumbling as scale of local government transformation required accelerates

Published at 00:01 AM on 12 June 2014

12 JUNE 2014

Download PwC The Local State  2014

Council leaders’ confidence in protecting front line services is crumbling in the face of sustained financial and service delivery pressures, according to PwC’s annual survey of local authority leaders and chief executives.

Nine out of 10 council leaders and chief executives believe that some local authorities will get into serious financial difficulty in the next five years and that eight out of 10 will fail to deliver essential services. Two thirds of council leaders believe some local authorities will get into financial crisis in the next year.

The research also examines public perceptions nationwide of their council, highlighting that their patience is wearing thin with the cuts. Just 35% of the members of the public surveyed accept the need to reduce or close services in their area, a drop of 10 percentage points from 2011. 

Despite the sector surprising itself with the scale of saving that have been made over the past three years, for many, another round of savings of the same scale are now required again.

Public concern about the scale and impact of local government service cuts is also shifting to its impact on the community rather than individuals. Overall, half of the respondents are concerned about the impact of cuts on them personally, but concern for the wider community impact is higher (58%), particularly in the North West, Yorkshire and Humberside, and Wales, where over 60% are concerned.

  • Opposition to the cuts is highest in the North West (51%), South West (49%), Yorkshire & Humberside (46%) and the North East (47%).
  • Londoners feel more informed about changes to council services than the national average (41% vs 31%), supporting higher levels of acceptance of the cuts (44%).
  • Nationally, the public identify reductions in spending on road repair, libraries, and street cleaning the most, with the impact of changes across the board being felt the most by respondents in Wales.

Jonathan House, PwC local government team comments:

“The gap between how councils see their own financial outlook and the health of the sector as a whole has closed. 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.”

Considering issues of regional growth infrastructure investment, skills and housing were the top three barriers to growth identified by councils.

While councils praised the effectiveness of the New Homes Bonus and Business Rate Retention as positive government initiatives they want more financial freedoms. Raising council tax, business rates, levying and retaining property taxes, borrowing and investment would enable greater reinvestment in infrastructure, housing and regeneration. But executives admit the prospect of wholesale local government reorganisation is slim.

Jonathan House, PwC local government team adds:

“It’s becoming increasingly clear that while two-tier local government is unsustainable in its current form, there is little appetite for top-down local government reorganisation.

“In the near term, it’s up to counties and districts to work together to create an alternative future for themselves, and quickly. The question remains however, whether these collaborations or shared service approaches can deliver the scale of the cost savings needed.”

75% of council leaders, and 61% of chief executives believe their council is using technology effectively to deliver better public services, but only 29% of the public think so. Despite this, almost half – 48% - want more services to be available digitally, including 40% of over 55s. By comparison, 36% and 31% respectively said they still prefer to deal with their council in person or by telephone.

Contacts:
For a copy of the report, please contact: Rowena Mearley, Senior Manager, PwC Media Relations
Office: +44 207 213 47 27; Mobile: + 44 7841 563 180 Email: [email protected]

Notes

  1. PwC surveyed 125 council leaders and chief executives across the UK, and 2000 members of the public.
  2. Examining what services the public rely on the most, waste and recycling, parks, public transport, libraries, street cleaning and lightning came top again this year. Londoners demands are the highest in many areas, and above the national average for use of public transport (57% vs 46%), libraries (44% vs 38%), street cleaning (39% vs 28%), council housing 14% vs 10%), housing benefit (16% vs 12%) and adult social services (12% vs 4%).
  3. The survey finds that Local Enterprise Partnerships are beginning to make their mark, with 70% or more of council leaders and chief executives identifying them as key partners to achieve local growth – a 20% increase on last year, and second only to SMEs.

 


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