Andrew Jepp, managing director at Zurich Municipal, says local authorities must plan for the risks of tomorrow
Local government is experiencing a prolonged period of uncertainty. Net borrowing across the sector has been on the rise since 2013/14 and local government as a whole has not run a surplus since 1996. As funding has been squeezed, cuts have been made.
At their annual conference in July the Local Government Association (LGA) revealed that by 2020 local government in England will have lost 75 pence out of every £1 of core central government funding that it had to spend in 2015.
As local authority leaders battle with uncertainty and challenges on a number of fronts it is vital that they consider the longer-term risk landscape and act now to mitigate the challenges of the future.
Local public services in 2040
A few days after the LGA conference, the Social Market Foundation (SMF), alongside Zurich Municipal, published a new research report on the future of local government; Local public services 2040.
Rather than focus on the short term challenges the sector faces today, the report sets out to understand what factors could affect the future of local public services, broadly defined as the remit of local authorities, and to examine what local government might look like in 2040. The report seeks to look beyond the short-term pre-occupations of funding, further devolution, and the challenges of Brexit.
The last 25 years have seen local government in the UK undergo dramatic reform. Efficiencies and productivity improvements have been driven by the introduction of competitive processes and a shift in provision from the state to a mix of private, public, mutual and voluntary organisations. Change is a constant.
As the UK’s leading local government insurer, Zurich Municipal helps our customers navigate this change and act to mitigate the risks presented by the advent of digital government, payment by results systems and new funding structures. However, risk management is most effective when it scans the horizon for long-term, developing risks and considers macro factors such as demographic change, technological opportunities, regional divergence and new risks such as climate change.
Start a conversation on the risks of tomorrow
Our hope is that our recent report will help to start a conversation around the factors driving the supply of, and demand for, local public services, the risks and opportunities these factors offer, and how local authorities might respond.
While some of these long-term forces are beyond the control of local authority leaders, it is vital that conversations about mitigating the risk landscape of the future are started within local government now.