Title

Local government efficiency is back in the political spotlight as councils across Great Britain prepare to go to the polls next month.And Reform UK, which is tipped to gain control of a swathe of authorities, has made tackling what its leader Nigel Farage has branded ‘waste' a centrepiece of its local government campaign.The insurgent party has claimed that it has found £700m worth of savings at the councils which it took control of just under a year ago, without ‘touching frontline services'. And this has enabled its authorities, claims Reform, to keep its council tax increases below those controlled by other parties.However, after more than a decade and a half of public sector budgets cuts, are there many savings left to glean or is Reform's waste drive merely a saloon bar pipedream?Local government experts agree that there will always be some efficiencies to be found in the sector.Jonathan Werran, chief executive of think-tank Localis, said: ‘Like any corporate organisation, you can look at local government's spending spreadsheet line by line and take things out you don't like, such as extraneous memberships of outside organisations.'Stuart Hoddinott, associate director at the Institute for Government agreed. ‘There will almost certainly be some inefficiencies in the way that local authorities are run. They are enormous organisations that deliver a diverse range of different services and they manage a large number of contracts.‘There will always be, as there is in any organisation of size, inefficiencies in the way that it is managed.'Simon Christian, director of public services consulting at Grant Thornton, acknowledged it is ‘really hard' for elected members and officers to hear the message that efficiencies can still be squeezed.But he said Grant Thornton's analysis shows that if every authority improved its performance in recently published government rankings of English council benchmarks unit costs 2024-25 by two bands, an estimated £3.2bn could be saved across all councils. He added: ‘There is still efficiency to be had within local government.'David Phillips, associate director at the Institute for Fiscal Studies (IFS), agreed ‘big variations' still exist in terms of performance and efficiency across councils, which cannot be fully explained by factors like geography.A former London local government chief executive, who has consulted on finding savings with several councils on the Government's exceptional financial support (EFS) scheme, said even organisations that have gone through the efficiency mill over the last 15 years can squeeze out some savings by taking a fresh look at their assets and management structures as well as by commissioning through third-party providers more effectively.Reform's £700m worth of touted savings include £73m by Durham CC after renegotiating an incinerator contract and £30m by Lincolnshire CC from re-procuring IT contracts.Meanwhile Labour-run Southampton City Council has been able to escape from EFS, partly by reducing its care costs, which had been the second highest per capita in the country.But, while authorities should always be thinking about how they can do things in the most cost-effective way, there are ‘real risks' from taking an overly ‘narrow focus' on efficiency, argued Ebony Hughes, chief operating officer at IMPOWER Consulting.Not investing in upstream services can result in authorities seeing ‘more expensive' demands arising, Hughes said.Hoddinott agreed, arguing that the bigger efficiency gains as well as improvements in service delivery are now likely to lie in undoing the legacy of cutbacks on preventative work and under-investment on capital projects, like estates and IT systems.‘Those things all contribute towards inefficiencies in the way you deliver services', he said, pointing to how some authorities have succeeded in limiting costs while taking a preventative approach in children's services, name-checking Camden LBC.However, it is difficult to break the cycle of high demand and rising costs while taking a more ‘upstream' approach by reopening youth centres or renewing IT systems. This will require investment.He said. ‘They [councils] would probably realise some savings from that investment over the course of the next decade or so but there needs to be some money available in the first place.‘To make meaningful transformations you have to be able to invest to save.'The reintroduction of three-year settlements through the Government's recently announced fair funding review will help, Hoddinott said. ‘Having a three-year funding settlement for the first time in a decade is important for providing some stability and ability to plan forward.'One of the areas where longer-term horizons may pay off is when considering investments in AI.Geoff Tucker, group business development director at the Norfolk CC-owned local authority trading company Norse Group, sees AI as potentially ‘very useful' for maximising efficiencies.As an example, he pointed to how authorities could cut the number of expensive collection trucks that they run by using the technology to help re-engineer the routes they use.Similarly, there is clearly room for AI to make a ‘big difference' with job planning in other services, like grounds maintenance and social housing reactive repairs, Tucker said: ‘That's where AI could really drive through efficiencies.'Local government reorganisation also creates bigger councils that can justify investment in AI, he said: ‘Moving from two tiers to one is going to make a massive difference to the available investment money for things like AI.'While acknowledging the hype that colours many discussions about the potential uses of AI, the ex-London council chief executive sees efficiency opportunities for councils from harnessing this technology if they do it in tandem with wider reorganisation.‘There could be quite significant opportunities to employ fewer people and still do what they [councils] need to do.‘It [AI] is often paraded around like a panacea and it is also the case that, if really thought through as part of the wider change programme over the next five years, councils should be able to deliver quite significant savings.'However, often antiquated IT systems threaten to hold back local government's ability to embrace the productivity gains that AI could facilitate.Said Hoddinott: ‘You've got these fragmented systems that have got data stored across all different areas with no consistency between local authorities or even between departments within a local authority.'This mean datasets, which local government could train AI systems on, are currently ‘not usable', he added.Tucker said reorganisation will also create scope for greater efficiency by releasing the need for buildings, which could generate property development opportunities for the new unitary authorities.But Hoddinott said in the shorter term, the scope for making savings by bearing down on variations between different councils' spending on delivering services is limited by the wider country-wide pattern of inflation-busting increases in unit costs.‘Even to deliver the same level of services, local authorities are having to spend much more money on the same providers and the same level of provision as they were in the previous year.‘Those structural issues are really much more problematic and put much more pressure on local authorities than just slightly better procurement or not doing an office renovation they planned to do.‘The idea, and this has been borne out by the last year of Reform's claims that there is endemic waste and mismanagement of local authority services, has just been proven categorically untrue and it's been proven untrue by the fact that they've had to raise council tax at all their local authorities.'And, while efficiency gains remain feasible, their impact will be ‘marginal' within the context of the ‘sheer size' of the service pressures that councils face, said Werran.‘It's not going to touch the sides. The myth that there are significant savings to be made from local government budgets is for the birds. They don't amount to a hill of beans.'Using efficiency savings as a basis for council tax cuts is politically risky, according to the IFS' Phillips: ‘Building a concrete plan for taxes off an uncertain set of efficiencies is probably not particularly sound. You'd want to see the efficiencies delivered first and then cut taxes, rather than cut taxes and hope for the efficiencies.‘Given that a lot of councils are focused so much on statutory duties, serving very vulnerable people, you don't want the risk of those services, keeling over if you don't find the efficiencies.' Reform UK's peer network approach to ‘sharing the good stuff'‘Like trying to build an airplane while you're already in the air' is how former Nottinghamshire CC leader and MP Ben Bradley described the challenge facing the fresh batch of Reform councillors expected to be elected at next month's local elections.Reform's first year as a major force in local government since the insurgent party captured a string of county and unitary authorities at last year's council elections has been undeniably rocky.Bradley, who has been head of local government action in Reform's Department of Government Efficiency (DOGE) since defecting from the Conservatives last December, insisted to The MJ that his new party is ‘really happy' with the progress it had made in the councils that it took over last year.Adding the caveat that ‘overnight' fixes for the authorities it runs were never on the cards, he said: ‘In all sorts of places and all sorts of ways, we've made quite significant inroads [towards] lower council tax as a result of trying to be more efficient or as efficient as we can, than anybody else.'The degree of efficiency savings Reform will have to make will depend on how the authorities it takes over have been run previously.The party is now banking on its new elected members learning lessons from those who have been running councils over the past year.Reform is establishing networks so that its elected members can provide peer support for one another. He said: ‘We had councillors who came into local politics last year with a very low level of experience and support to help them. We're increasingly putting networks together where we're sharing best practice and we are helping them to talk to each other.‘Our councillors and council leaders will have people around them within Reform who are council leaders and have done it for a year and who are able to help them.‘Those guys are now starting to engage, and we're going to bring our new councillors into a different setup where they've got more of that peer support and they are more able to share the good stuff. That will really help.'These peer networks mean, Bradley said, that the new cadre of Reform councillors due to be elected in May, will have ‘better support' than he ever experienced as an elected member or leader when sporting a Conservative rosette.Claiming that he never recalls being offered this kind of support from the Tory central office, Bradley said: ‘We are much more focused on, and supportive of, our councillors than other parties, not least because it's the bulk of our representation. We haven't got 100-odd MPs.'

Title

FINANCE

Winning the war on waste?

By David Blackman | 16 April 2026

Popular articles by David Blackman

SUBSCRIBE TO CONTINUE READING

Popular articles by David Blackman