Thinking the Unthinkable: Local government after the next Spending Review

Gaming the Cuts PDF downloadAdobe PDF Format

Local government has borne the brunt of the public spending cuts – and it has coped relatively well so far.  With further cuts expected at the next spending review, what will local government look like by 2018? More urgently, what decisions do councils need to make today to deliver the savings needed in future? 

To begin to imagine the future of local government, the think tank NLGN conducted a budget ‘war game’ with senior local government officers.  Presented with the fictional council of AnyBorough, two teams set successively challenging budgets for 2014/15 and 2017/18 in the face of press scrutiny, local economic catastrophe and growing demands from their populations.

Watch our video to find out more about how the council officers dealt with the budget challenges facing Anyborough.

 

View transcript

Over 24 hours in November, twelve council chief executives gathered together to game the implications of the next spending review for local government.

Presented with the fictional council of AnyBorough, the chief executives worked in two teams to set the council’s strategic priorities and budgets first for 2014/15 and then 2017/18.

Which services will AnyBorough still be delivering in 2018? Which will be commissioned, or cut? What creative solutions will emerge to address AnyBorough’s increasing economic challenges? And what can AnyBorough teach us about what local government will look like in 2018?

In the first round, the two groups were set the task of finding £13 million of savings from a total council budget of £162 million.

Guided by a control group, each council team discussed the principles that would guide AnyBorough’s spending decisions before agreeing on a budget to present. Low cost, quick wins were prioritised with incremental savings made through outsourcing and improving efficiency.

A journalist shadowed each group and reported back on the council budgets from the perspective of the local newspaper. In this round headlines focused on the decision to outsource residential care and demonstrated the potential fallout when communications are not handled well.

“Woman dies as callous council forces her out of care”, “Council to launch adopt-a-granny plan”

Next, the game took AnyBorough into the next spending review. The groups had to find another £13 million of savings by 2017/18 – and this time it was harder.

Following much deliberation, the major source of savings for both groups was the integration of health and adult social care. Both groups also raised council tax and made savings by reducing or reforming early years support. Finally the groups realised above all that they needed to accelerate their savings programmes.

They began to think beyond service delivery, and considered how to manage demand and promote cultural change both in the council and among residents.

Mike Burton: One of the key messages of any big changes in local government such as will be happening in the next few years is that you’ve got to get that message across to the public. More and more now it is about trying to manage demand and that means expecting the public to expect less. So communication is a key part of this.

In the final round, the groups reset their budgets for 2017/18. In this round AnyBorough is confronted with fresh challenges. A major employer has left the town. The council has missed its savings target on social care. The crisis forced the groups to think beyond AnyBorough’s boundaries and consider the local community and economy in their strategies, as well as partnerships with neighbouring areas and the private sector.

Iain Roxburgh: Sometimes the budget crisis leads the council to look at its own navel, to examine its own internal issues, which it’s got to do, and take its eye off those issues that the people in a place and the place itself actually need addressing urgently. And it is that divergence that people need to be aware of. An organisation like a local authority facing a budget crisis needs to focus on the real place as well as on its own financial challenge.

At the end of the 24 hours, all of the participants gathered together to share what they had learned and to consider the implications of Anyborough for their own places and people.

Attendees agreed on the scale of the challenge facing local government, and on the need to act now to deliver the future savings needed.

But they also found reassurance in that many of the ideas needed to deliver the necessary changes are already being considered or implemented.

The challenge is in recreating the urgency of 24 hours in AnyBorough and working with colleagues, partners and citizens to transform local government to be fit for the future.

Simon Parker: It’s about saying, yes, 2017/18 feels like it’s a long time away. You as local government officers are stuck in the day to day of delivering cuts, managing your organisations, and that’s really important and it is really hard. But we also have to look to the horizon, and that’s what we’ve been doing. We’ve been looking to the horizon. I hope what we’ve done has been enjoyable for the people that have come, and that they’ve learned a lot from each other. But also that on Monday morning, it’s going to result in them going back to their organisations and saying ‘right, we’ve got to pick up the pace, we’ve got to do this stuff, and we’ve got to do it now’.

Andrew Muter: The number one thing is really about getting my organisation into a mode of thinking about the next three to five years and not just the next year.

Martin Smith: The big thing for me is I will go back with some renewed energy and determination to put some acceleration behind the things we’re doing because what the 24 hours has confirmed to me is that those things will work and I’ve had the benefit of the expertise in the room to tell me they’ll work, so I shall give these things a bit more of a push.

What became clear through the process, and our subsequent round table discussions, is that councils, and the places they lead, will look very different by 2018. There are tough choices and difficult transitions to be made. Councils need to be on the front foot in responding to the challenges they face if they are to remain viable entities and fulfil their role as leaders of their communities and places.