PwC report: The Local State We’re In 2016 – hopes for devolution up, but challenges remain

Published at 00:01 AM on 26 May 2016

A fifth of local authority chief executives and council leaders across the UK expect to have additional devolved powers by 2020, but more than eight-in-ten (85%) also warn that they face serious financial challenges over the same period.

Despite councils’ success in transforming themselves in the face of years of austerity, PwC’s annual survey of local government leadership reveals that eight-in-ten (81%) chief executives believe that some local authorities will fail to deliver essential services over the next 3 years.

Almost nine-in-ten (86%) of chief executives believe that some local authorities will get into serious financial trouble inside the next three years, with 56% anticipating that some authorities will face a financial crisis inside the next 12 months.

PwC’s sixth annual survey, the Local State We’re In 2016, asked nearly 100 chief executives and local authority leaders across the UK about the challenges facing local government and their responses to them.

The survey found that, against a backdrop of continued fiscal austerity, a majority of chief executives (64%) were confident of making necessary financial savings over the next 12 months without seriously impacting the quality of service delivery. However, when asked whether this was possible over the next 5 years, a mere 13% believed they could maintain service delivery in the face of expected financial constraints.

PwC also surveyed over 2,000 members of the public to discover their views on their council’s performance, role and remit.

Other key findings of the survey include:

  • 84% of chief executives and council leaders agree that further integration of health and social care will have a positive impact on health outcomes for the local population, yet only 34% believe integration will deliver savings for their council
  • Less than half of chief executives (48%) are confident in their approach to digital security
  • Less than half of councils are prepared for the shift to business rates, with council leaders slightly more confident than chief executives on this point.
  • Only 16% of the public believe their council has become more effective over the past five years, with 31% - down from 47% in our 2011 survey – willing to accept the need for reductions or closures.

Chris Buttress, PwC partner and local government leader said:

“There is real shift in emphasis this year - a focus away from delivering ‘cuts’ towards making interventions that underpin regional economic ‘growth’ and public sector reform. However, leaders and chief executives also recognise the magnitude of the financial struggle and the necessity to find solutions, as the shift continues from grant reliance to self-sufficiency.

“Consequently, as we look towards 2020, we are expecting to see some fundamental changes in the way local public services are delivered. As that journey continues, councils need to ensure that they have the capacity and capability to match their ambition in order to deliver on new opportunities while managing new risks.”

Devolution:

Despite the Government heralding a ‘devolution revolution’, optimism around progress on devolution being made by 2020 is waning. In our post-General Election May 2015 survey, 33% of chief executives and council leaders felt confident that local government would have more powers and responsibilities by 2020, this has now fallen to 20%.

In addition, while 69% believe they will be part of a combined authority by 2020, only 36% believe their anticipated combined authority will be overseen by an elected mayor.

There are also concerns around the shift to business rates as a funding model. The overwhelming majority of council leaders and chief executives believe they should have more control over business rates, but only 42% of chief executives acknowledge that their council is prepared for the shift.

Jonathan House, partner and PwC’s Local Government leader in the North, said:

“Devolution offers significant opportunities for local government and the wider public sector in a place to come together and deliver better outcomes, both in terms of growth and public service reform. However, the ‘devolution revolution’ is becoming more ‘evolution’ as the pace and depth varies greatly across the country.”

Integrated Care

As in previous years, a large majority of respondents believe that further integration of health and social care will have a positive impact on health outcomes for the local politician. However, only a third (34%) believe that integration will deliver savings for their council. Overall, despite health and social care integration being limited in devolution deals beyond Greater Manchester, 60% say that devolution is part of their strategy for health and social care integration.

Jonathan House, partner and PwC’s Local Government leader in the North, said:

“In conversations with chief executives, most see the integration of health and social care as having a major impact on their place and organisation in the next 3 years. Those that are playing an active role in the STP process will help shape their health economy and improve outcomes. Those taking a back seat will find their organisations reacting to a health sector driven transformation which impacts upon their core delivery.”

“Some see the drive for geographical local government reorganisation as flowing from DCLG, however the form and function of local authorities might be more influenced by the Department of Health / NHS.”

Public opinion:

The survey also looked at the public view of the local government and found that less than a third of the public (31%) now accept the need for closures and reductions to service or facilities in their local area. This proportion has steadily reduced over the past six years (47% in 2011) demonstrating the public’s diminishing confidence in their local authority.

Other key findings showed that the public want to be more informed about the need for closures and reductions with 50% feeling uninformed. This might help improve public confidence in local government given that less than a fifth of the public think their council has become more efficient and effective.

Digital:

Confidence that local authorities are embracing the opportunities that new technologies offer is slowly rising amongst leaders. However that confidence is not reflected in the public opinion, which has decreased over the past two years from 29% to 23%. Equally the public’s trust in local government to handle personal data stands at just 30%, (a decrease of 5% since 2015).

Chris Buttress, PwC partner and local government leader commented:

“Data analytics and business intelligence will be more and more critical for councils in the next five years: intelligent analysis of their data will help them form new priorities, smarter interventions as well as better, more informed choices and efficient ways of working.”

ENDS

Notes for editors

For more information, please contact Pippa Vaux on [email protected] or 020 7212 1672

About The Local State We’re In 2016
Our research covered local authority Chief Executives and elected Council Leaders across the United Kingdom. These surveys were conducted online during January-April 2016. An online survey of 2,007 UK adults aged 18+ was carried out from 9-12 February 2016.

The results of the public opinion poll have been weighted to nationally representative criteria. This is the sixth edition of the Local State We’re In, the first being published in August 2011.

About PwC
At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

© 2016 PwC. All rights reserved


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About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. © 2016 PwC. All rights reserved

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