Our new survey shows that councils have coped well in the face of this uncertainty in the short term, but concerns about the longer term remain high and the scale of the challenge ahead is significant. Austerity continues to be the backdrop as councils grapple with digital disruption, embracing the potential of data and analytics and developing resilience. Beyond organisational priorities, there is a growing focus on partnership working in order to deliver place based growth and public service reform.
Almost a third of councils now feel that the ‘cliff edge’ is imminent and are not confident of their ability to deliver in the year ahead. When considering the three and five year outlooks, confidence halves and then halves again with only 16% confident that they will be able to make the necessary savings without impacting the quality of services or outcomes in the next five years.
Councils need to build organisational resilience and in particular develop new skills and commercial acumen in order to be effective. However, councils are notably under-equipped in terms of capabilities in a number of significant areas that will be essential for the effective operation of councils in the future.
There are specific gaps around data and analytics capabilities, with only a third (33%) of respondents confident that their council uses data analytics effectively to inform decision-making and strategy. Furthermore, councils are vulnerable to cyber-attacks with only half (53%) our respondents confident in their approach to cyber security and a third (35%) confident that their employees are well equipped to deal with cyber threats.
As councils shift their thinking towards driving public service reform across their place, six out of ten respondents agree that councils should be more responsible for facilitating outcomes rather than delivering services, yet only four in ten fully understand how to measure outcomes while only a quarter know the cost of securing outcomes across a place.
Taking the example of health and social care integration, while appetite for reform remains with 77% believing that integration will have a positive impact on health outcomes, barriers to integration are becoming apparent, with over half (54%) of respondents feeling that their council has not been fully engaged in the Sustainability and Transformation Plans (STP) process.
Place based growth has also risen up the agenda with councils’ priorities for growth largely reflecting those of the public with skills, housing and transport topping the agenda. However, significant barriers remain in each of these areas, with 79% of respondents identifying lack of investment in infrastructure as a key barrier to growth, 70% lack of affordable or suitable housing and 67% lack of influence over skills.
As councils look to the future, there are new risks to manage, from cyber threats to the shift away from grant funding, to an ever more demanding public. Councils have proved before their ability to deal with significant challenges. As they look to the future, they will need to find new ways to adapt and be innovative in the face of uncertainty.
It is crucial that councils now respond to six key challenges:
1. Developing strategies to drive place based growth and securing a clearer economic identity and inclusive approach for their areas;
2. Working across places and securing the right public service reforms to underpin the delivery of key economic and social objectives and outcomes;
3. Focusing on building the right skills, capabilities and processes to secure organisational resilience and managing key organisational risks;
4. Developing commercial skills and business acumen to secure key economic and social interventions and investments and being prepared to work outside council organisational boundaries and seamlessly across the public and private sectors;
5. Embracing the value of data as an asset and investing in an analytics capability to inform decision-making, drive smarter, earlier interventions and to influence behaviours, and as a result reducing risk and cost;
6. Harnessing emergent digital technologies to change traditional ways of working and create new value, experience and insight.