Local authorities are in the single largest financial crisis in their history. Budgets are continuing to reduce in cash as well as in real terms, demand and expectations on services are growing, and there continues to be significant financial pressure to improve outcomes and reduce inequalities across the population.
Responses to these challenges are continuing to be fairly well defined: improving productivity and impact through shared services, a ‘shift to prevention’ and more effective joint working with other public agencies, with the third sector and with communities. Also noted are that these changes are occurring against the backdrop of a fall in local government employment by 25% (800,000 employees) over the last 7 years, and an increase in net borrowing (£8.6bn in over the last two years). The key issues being faced include:
- An ageing population (the pension-age population is forecast to rise by close to a third [34%] and the number of over-75s in the population is set to grow by 89% over the next 20 years).
- Fragmented families
- Housing affordability
- Increasing pressure on social care and health services
- Higher expectations of public service quality and convenience
- Localised environmental risks around flooding and air pollution are expected to heighten
- Greater fiscal devolution (will present opportunities to councils to ‘control their destiny’ as well as risks around the resilience of their local tax bases).
Advances in External Service Delivery
To support local authorities in their financial challenges of having to keep ahead and deal with the issues above, IT and technological innovations are being made to accelerate the move to digital self service for many of these services. In addition, strategic service partners in outsourcing services or providing shared services (whether public or private sector providers) are improving their approach to be more flexible and increasing the innovation quotient to improve external service delivery to help local authorities deal with these challenges.