Budget 2020: Local government must make the leap beyond an austerity mindset
March 09, 2020
As the UK gears up for its first Budget since the General Election, local government stakeholders will be waiting to hear if there’s anything in it for them. On March 11, councils will be hoping that new Chancellor Rishi Sunak will provide them with the financial, economic and policy levers necessary to rebuild and reorganise themselves with purpose.
We expect the Budget to expand on the government’s plans for devolution, for unlocking regional growth through infrastructure investment, for setting a new policy direction for business rates; and offering further clarity on local government’s biggest budgetary challenge - social care funding - potentially by allowing councils to increase council tax by 2pc to raise extra cash.
Whatever the outcome of the Budget, councils need to make a strategic and sustainable leap beyond the austerity mindset that has prevailed in recent years. It’s a theme we are examining in our forthcoming report, Restacking the blocks: rebuilding local government with purpose
Austerity forced a difficult set of decisions on local councils. Local government looks very different today - after more than a decade of financial pressure, rising demand, rapid technological change and an evolving policy landscape.
Many councils have become fragile and unstable and there are rarely any clear plans to address the resulting imbalance. If councils are to become stable once more, they can no longer afford to bolt on services or make ad-hoc decisions that are not aligned to an overall purpose.
An unintended and unstable stack of capabilities
Pre-Austerity: Councils acted as a primary service provider, with a relatively stable service provision and responsibilities. Whilst changes to the funding environment caused some instability, wholesale changes to local government operating models were not typically required.
Mid-Austerity: As financial pressures mounted and the complexity of resident’s needs became better understood, councils needed to change how they operate, and quickly. This led to certain functions, such as service delivery and support services, being cut back and new services added on.
Today: With more services added and others removed or consolidated, local government operating models have become at best inefficient and at worst unsustainable, meaning that councils can no longer financially support themselves.
Rebuilding with purpose
To restack the blocks, we propose that radical action should be taken across four themes:
Ways of working: Councils must align their purpose, what they do, their function and form (or operating model), their people and culture, and their resources. This will require new ways of working that are able to balance system-wide perspectives with the diverse and often statutory responsibilities of organisations within the system.
Digital: Digital transformation initiatives must be aligned to the overarching purpose. Councils must provide strong digital leadership, a core in-house digital and data capability, and an ability to access specialist skills and support from partner organisations.
People: Councils and other public service organisations need to challenge the traditional relationships between citizens and the state. Purpose led councils will be able to balance their statutory responsibilities with investment in prevention, early intervention, and community empowerment to really turn the dial on social care demand.
Place: With an English devolution white paper imminent, we need to think about places not as geographic areas or individual councils but as public leadership systems. Councils must take a lead in working with their local and regional partners to develop long term strategies that support inclusive growth and drive experience and behaviours where people are positive about the places they live, work and visit.
We believe that these four themes are fundamental for councils to rebuild in a purposeful way and make a real impact on the way local government works and delivers better outcomes for its people and places.
Is your council ready to rebuild in a purposeful way to deliver radically new ways of working and create a fairer and more inclusive future for our communities?
If you’d like to read our new report, Restacking the blocks: rebuilding local government with purpose, and receive further insights sign up to our government perspectives alerts and we'll let you know when it is published. Or feel free to get in touch with Ian, Viv or Ben for an advance copy.