Without a shadow of a doubt, it is local councils that have borne the brunt of the Coalition Government’s deficit reduction programme. That they have been able to survive real terms budget cuts of 40 per cent is a tribute to the hard work and even harder decisions taken by countless dedicated local councillors and officers. Their reward under the next government will be a further round of swingeing cuts. This much is certain.
What is less certain is how local leaders will choose to respond to this new challenge. Their decisions will determine the shape of the public realm for decades to come. A rash of referendum-busting Council Tax increases will not be enough to fill the fiscal gap. Holding out hope for a major reform of local government finance will be equally futile. If New Labour couldn’t implement the Lyons Review during the years of plenty, it is difficult to see how a future national government of any political stripe would be able to do so as austerity grinds relentlessly on.
Nor will the answer come from traditional efficiency drives: from pay freezes and simplistic appeals to deliver “more for less”. Of course the search for technical efficiency gains must continue. There is always scope for continuous improvement and no manager worth their salt should accept the argument that further savings are impossible. Local councils know this. It is what they have been doing so successfully since at least the turn of the millennium.
Yet if the low hanging fruit have been plucked, where can councils look for inspiration? The answer lies with nothing less than the fundamental re-design of core public services. This means shifting the focus to what economists call allocative efficiency; moving from the managerial “are we doing things right?” to the transformational “are we doing the right things?”
This is not a big secret. National and local politicians have known it for years. Whether they called it “Total Place” or “Whole Place Community Budgets”, the idea of public sector transformation based on a citizen-centred systems analysis of functional geographic areas is old hat. What is lacking is not the intellectual foundations, it is the courage to act.
By the end of the first 100 days of a new government, there will have been a Spending Review and perhaps even an emergency budget. The euphoria of election victory will have been replaced by a realism that deficit reduction must continue. National politicians will again talk of “hard choices” but the public will be less sympathetic than they were in 2010: with a stronger economy, few will understand why local services continue to be under pressure. It will be a wonderful time to work in local government for those brave souls willing to seize the day.