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The reverberations of the global economic crisis are going to be felt for years in the local government sector. Delivering key infrastructure in this climate will be tough, and The MJ and LocalGov.co.uk held a round table discussion with top council officials and sponsor Atkins to gauge the challenges ahead. Matt Hobley reports on the discussion. The grim reality on the minds of all council chiefs at last month's annual SOLACE conference in Brighton – where the discussion took place – was that budgets are going to become much tighter. Local authorities will need to make major savings and find innovative ways of supplementing funding streams in order to continue to deliver their programmes. Consequently, the mood around The MJ/LocalGov.co.uk ‘More efficient, more effective infrastructure' discussion was, at first, gloomy. Councils might be looking at 20% budget cuts over the next three years, possibly more, and yet the pressures to improve services will be stronger than ever. There was agreement that ‘everything was under consideration' in terms of schemes which might be cut. ‘A lot of red pen had been drawn through some very large figures,' as one delegate put it, and even major national capital schemes, such as London's hard-won Crossrail, could be threatened by the funding squeeze. But shrinking public expenditure is only part of the problem facing the sector. The financial crisis cannot be considered in isolation, since pressures applied by the environmental and energy agendas are set to create a ‘perfect storm' for councils. It would, of course, be easy to resort to a glass-half-empty philosophy when faced with this formidable trinity. Ultimately, though, the view around the table was that local government should see the current climate as a major opportunity. ‘We don't want to waste a good crisis,' as one participant put it. ‘We need to make sure we grasp it and make it work for us.' How, though? Clearly, there is a need for councils to rationalise their assets, but senior officers and members should ensure the decision-making process is not monopolised by financial concerns. Despite what business secretary Lord Mandelson might say about ‘improving' market conditions, disposal of assets, such as buildings, would not be easy in the current climate. Greater collaboration in service provision leading to the better use of assets will also be key. ‘We have been looking at the number of public buildings across our area, and they are dotted everywhere,' one participant explained. ‘There must be opportunities to share these buildings, as housing services does not have to sit in another building away from social services'. This apparent inefficiency in the use of building stock not only applies to local government, but to the raft of agencies providing public services in any particular area, including primary care trusts, the police and the voluntary sector. Beyond physical assets, a similar discord exists with the procurement of services. One participant had looked at systems across the local authorities in an area, and identified seven different ICT approaches. The obstacles to effective joint working are substantial, though. Rather than trying to share services ‘horizontally' with other councils, one participant preferred to focus energy on sharing services and assets ‘vertically' with other public sector providers in a particular area. However, councils and other agencies were concerned about ‘sovereignty', and were fearful that their brands would be lost when driving through these service efficiencies. ‘But the public don't really care who provides the services,' one delegate argued, ‘just as long as they get the services they need.' Greater collaboration would require more openness and a willingness on the part of an organisation to make necessary cultural changes, another added. Collective leadership would be, as ever, key. Councils also need to ‘take more risks' to continue providing infrastructure programmes, and not ‘simply take no for an answer' if innovative proposals to deliver services were rejected. ‘We need to work from the ground up,' one delegate said. ‘This is how we should respond to these pressures and react to the challenges. When faced with these pressures, we need to draw the lines further back. ‘We must work on difficult problems, and we are going to utilise different funding packages. Nothing can really be off the table as far as procurement is concerned.' Total Place, the Government's ground-up services agenda, had a clear role to play here, according to those around the table. The funds potentially unlocked by the approach will mean that partners will have to work together and ‘take a long look' at what services they are providing. With this genuine collaboration, effective procurement and infrastructure provision will follow. And, in the face of the perfect storm, service-providers will also have to adapt. Cynics may claim that in difficult times, temptation is considerable to hive services off to the private sector in order to reduce staffing liabilities. However, the view around the table was that this failed to grasp the full potential of what the private sector could offer in the face of these challenges. High-level, multidisciplinary advisory teams which can advise across a range of sectors – IT, infrastructure, energy and green issues – could work with senior teams to help assist with the rationalisation of assets and the joining-up of procurement practices, paying due heed to councils' responsibilities on energy consumption and environmental issues. And, although funding resources will be tight over the next budgetary period and beyond, expertise may also be available on tapping the right funding stream to meet local requirements. It would, of course, be disingenuous to suggest that councils will be able to ride out this storm with a positive mental attitude. Despite the glass-half-full mindset evident around the table, no-one was in any doubt that times were going to be tough, and councils would have to make some very difficult decisions in order to continue delivering great services. But boasting an excellent reputation for delivery and efficiency in the public sector, the skills sets, expertise and innovative approaches do exist within the local government sector. Councils must ensure though, that in the face of a perfect storm, their organisations are ship-shape. Attending: William Benson, director of change and business support, Tunbridge Wells BC Stephen Baker, joint chief executive, Suffolk Coastal and Waveney DCs Jan Ormondroyd, chief executive, Bristol City Council Dr Andy Southern, managing director, Atkins Transport Planning and Business Paul Dollin, managing director, Atkins UK Design and Engineering Business Will Foster, Atkins Communications and Systems Division Chair: Michael Burton, editor, The MJ Reporter: Matt Hobley, publisher, LocalGov.co.uk Click here to view a video of the debate

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Maximising assets in the 'perfect storm' of recession

By Matt Hobley | 05 April 2011

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