Press release

Councils on track to slash costs but at what price?

14th November, 2005. Telewest Business study reveals public services could be at risk as Central Government leaves many council officials feeling their way in the dark Local councils in the UK may be on track to achieve the savings outlined in the treasury-backed Gershon Review but this is expected to come at a huge price to public services and future council tax reviews. This is at risk if councils don’t start getting more guidance from Central Government, before they take drastic steps such as scaling back on services or culling staff to meet cost-cutting measures.

This was the key finding of a nationwide study commissioned by Telewest Business, following the first anniversary of a Government mandate on local authorities to achieve efficiency gains of at least £6.5 billion by 2007-2008. The Telewest Business Local Councils’ Efficiency Study, which polled 100 senior managers within local authorities across the United Kingdom, was conducted on behalf of Telewest Business by public sector research specialist Vanson Bourne. Nearly three quarters of senior council officials polled were confident that their council was on track to meet Gershon’s targets, but an alarming 61 per cent felt that this could not be achieved without impacting the availability of public services. A quarter of councils felt that it was impossible to meet targets without impacting council taxes.

“Local council priorities have shifted with Gershon, from getting public services online to waking up about efficiency gains across the entire organisation,” said Christopher Small, Director of Public Sector at Telewest Business. “What’s shocking is that many local authorities say they are feeling their way in the dark. This implies a devastating risk to public services if more guidance is not given centrally. For example, the research highlights the impact new working practices such as remote working can have, but its deployment is still limited. Such strategies could help councils cut overheads such as office space without cutting staff.”

A lack of guidance from Central Government was spotlighted by the study with 64 per cent of councils feeling they were not getting enough guidance on how to meet cost-cutting measures. In addition, more than half of senior council managers polled felt that councils needed more autonomy from Whitehall to cut out the red tape and increase the rate of improvements in public services to drive the cashreleasing efficiency gains expected.

With individual councils expected to achieve 2.5% per annum savings the onus is on local authorities to boost internal efficiency while still maintaining and running better services. These efforts are expected to release money and other resources that councils can reinvest in local services or hold to control council tax charges. The Telewest Business study sought to examine the views of councils on particular areas of efficiency gain such as human resources, reducing overheads and deploying new technologies to improve staff productivity.

A summary of the key findings is detailed below:

• The research identified three key success factors which would increase a council’s ability to achieve targets: having people with the right skills (53 per cent selected in their top 3 success factors), reviewing council processes to cut out the red tape (53 per cent), and adopting new information technology to increase staff productivity (51 per cent)
• 93 per cent of council officials suggested that it is a challenge to find people with the right skills, and half of those suggested that this situation was becoming increasingly difficult. This could signal a skills crisis in the public sector that could hamper public services in the next five years
• 65 per cent of local councils polled said they were coming under increasing pressure to reduce office space. There were three main reasons cited for this pressure: reducing costs, increased adoption of technologies that enable home working, and the restructuring of public services
• Remote working was highlighted as a driver for meeting efficiency gains. The two areas where efficiency gains could be made highlighted by the research were: increasing staff productivity (65 per cent) and increasing staff retention (65 per cent).
• The extent to which councils were currently deploying remote working to achieve efficiency gains was found to be limited. Almost half of the respondents said that their councils didn’t have a remote working policy in place for more than 10 per cent of staff.

“Significant savings can be achieved by councils by making more effective use of IT and network technologies to deliver efficiencies and rationalise current processes. The risk is that if not all possible strategies are considered, councils may start taking drastic steps which could be avoided. With some councils succeeding more than others, this could also risk creating an un-level playing field for the delivery of public services across the UK,” added Small.