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‘Business as usual' is not a feasible proposition for local government in the current recession.But innovation is, says Nick Raynsford The challenge of the recession is double-edged for local government. On the one hand, there is the increased cost of providing services for those in need, including rising numbers of people out of work or on reduced incomes. On the other, there is the squeeze on revenue, with less people and less businesses able to meet the full economic costs of services. Add to this the inevitable squeeze on central government support for local government, and the picture begins to look remorselessly gloomy. Higher costs, less revenue, and less support from the centre. There are broadly two responses to these pressures. The first, which is much in evidence in the current political climate, is an attempt to shift the blame elsewhere. How much easier to lay responsibility at someone else's door – be that central government, the banks, or any other object of public hate – rather than acknowledge that we are in exceptionally difficult circumstances, and all of us have to pull together, if we are to find a way through the current crisis. The second response is to recognise that the world has changed dramatically, and we have to develop new approaches. ‘Business as usual' is simply not a feasible proposition. Instead, we have to recognise the need to reduce expenditure so as to minimise the burden on citizens, while at the same time, developing new responses to the needs of local residents and businesses facing hardship or serious pressure as a consequence of the recession. To add to the challenge local government has to square this circle without depending on the ‘get out of jail' card, which has often, in the past, been seen as the key to survival – an injection of financial support from the Government. Local government has traditionally demonstrated a remarkable ability to manage in testing and difficult circumstances. The traditional culture of local government in Britain is not one of throwing one's hands up in the air in horror, or petulantly taking ones bat and ball away. Faced with unexpected and sometimes-unreasonable demands, local government has generally tried to cope to the best of its ability, and to manage its way through the difficulties. Local government has also demonstrated considerable flexibility in responding to changing circumstances. Some years ago, in a more benign economic environment, council tax increases well ahead of the rate of inflation were imposed by most precepting and collecting authorities, without any embarrassment or sense of shame. Now, in a harsher economic environment, most councils are vying with each other to keep their council tax increases low. Many have succeeded in bringing in nil or even negative council tax increases. And this despite less-generous levels of government grant than in the years of plenty. We are also seeing much more ingenuity from a range of authorities in building partnerships or developing joint services to deliver better outcomes for local residents at lower cost. ‘We have no money. Therefore, we have to think', is a well-known adage which has obvious relevance for today. Thankfully, it appears to have been adopted relatively widely in the local government community as a prompt for action, rather than a hollow slogan. This is not to say that the absence of adequate funding can be side-stepped simply by a moment of intellectual brilliance. Many local services can only be maintained with a continuing supply of capital and revenue finance. However, there are other service areas where innovative responses can be developed on a more cost-effective basis than traditional delivery models. Now, more than ever, such new approaches are at a premium. So, whether we are talking about taking cost out of traditional service models, developing new ways to deliver particular services, or how to build more effective partnerships to meet needs that have not been adequately addressed in the past, innovation is going to be fundamental to local government in the coming year. Nick Raynsford is former local government minister

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WHITEHALL

Wanted: Bright ideas

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