Reduced tax revenue and increased demand on services due to the downturn will have a far more profound impact on councils, consultants have warned. Rising unemployment, increasing levels of crime, and higher demand for social care and housing will force councils to make radical changes to the way they work. If not, the report, Turning the tide, by consultant Deloitte warned, new tensions between expenditure reduction and increased citizen expectations could lead to a cut in quality across key public services. To survive, councils were urged to become ‘leaner, more commercially-savvy' organisations, and not rely on Whitehall bailouts. Strong financial management and a capacity for delivering services more efficiently were key factors for success. Mike Turley, head of Deloitte's public sector practice, said: ‘To date, analysis has focused on economic indicators such as consumer spending, the property market and UK businesses, but the impact on the finances, operations and policy-making of public sector organisations may be equally significant. ‘This is important because the health of public finances and the ability of government to deliver services are highly relevant to the public interest and the economy.' The report came as councils stepped up efforts to help their communities. Newcastle City Council unveiled a £21m recession-busting budget, including an extra £4m for regeneration. It followed the announcement by key regional employer, Nissan Cars, that 1,200 jobs would be lost in Sunderland. And mayor of Stoke-on-Trent, Mark Meredith, told The MJ a regional response by a task force was under way after Waterford Wedgewood went into administration. Political differences had also been put aside. ‘For three local authorities to have unity and a sense of purpose has given confidence to our other partners,' he said. ‘We know we are going to feel the effects of the downturn, but we are also aware that 90% of the solutions are in our own hands.' Deloitte advice: l harness valuable customer data from across government to improve the way services are planned and delivered l parts of the supply chain may now be vulnerable to failure l public sector organisations' comparatively strong credit rating can be used to obtain better value for money
