The problem with productivity plans

By Ian Miller | 05 February 2024

The final local government finance settlement has brought some welcome news.

The minimum increase in core spending power of 4% mainly benefits district councils. Some also benefit from the 16% increase in rural services delivery grant. £3m will protect others from the worst impacts of internal drainage board levies. Welcome changes, but they are one-off sticking plasters that don’t provide long-term, sustainable funding solutions for districts or other councils.

Asking local authorities for ‘productivity plans setting out how they will improve service performance and reduce wasteful expenditure’ shows the Government doesn’t understand the problem with local government funding is the quantum and its distribution, not councils’ efficiency.

How productive was time spent on lobbying for extra resources, when it was obvious the provisional settlement was inadequate?

Local government staffing fell 31% between Q3 2010 and Q3 2023. Population and housing growth mean many fewer council staff are serving more people than before, with greater demand for services – such as collecting waste from more households.

Where does the problem with productivity lie? Staff numbers in central government (including the NHS) grew by 32% from 2010 to 2023. Civil service numbers grew by 27% in the seven years from 2016, including 16,000 more between September 2022 and September 2023 (+3.1%).

In 2022-23 TV Licensing spent £137m collecting £3.7bn from 24.4m households. The estimated evasion rate is 10%. That amount could be raised by less than 1p on the basic rate of income tax, evasion would fall very substantially (employers are fairly good at deducting the tax) and the £137m cost of collection would be saved. The courts service would save money as prosecutions for non-payment would cease.

I predict we won’t see any such central government productivity saving in the chancellor’s budget. Yet the Government can find time and civil servants to review and monitor productivity plans, while councils have to squeeze their activities yet further in order to write them. You couldn’t make it up.

Ian Miller is chief executive of Wyre Forest DC

X – @IanM65

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Finance Settlement Funding Council staff