Total partnerships to maximise offer
It’s that time of year again when councils will be mobilising efforts to produce a balanced budget for next spring. So is there anything different about this year compared with past challenging periods? And how is this seen from our parallel world in the private sector?
A few statistics and salient pointers from our recent local government survey give us some clues as to the degree of organisational stress that local government is experiencing.
It appears that the extent of cuts in local government funding (an average 24% cut in central government grant by 2014-15 with a further estimated 10% ‘to be found’ by 2018-19) is beginning to bite.
New thinking and a fresh attitude to finding solutions in previously ‘sacred’ areas of provision are now appearing. And a number of themes are emerging:
- 38% of councils believe there are no ‘no-go areas’ when it comes to partnership working with the private sector, including children’s services
- 44% of authorities are still to implement a strategy to deal with their budgetary challenges to meet the challenges in 2014-15
- Authorities are roughly halfway through their approach to making cutbacks (average of 16% cutbacks made to date) with mechanisms to find a further 18% (on average) yet to be identified.
More detailed examination with chief executives suggests that most of the savings made to date have been achieved through painful job cuts. Very few authorities are yet to ‘bite the bullet’ and think the unthinkable about how a sustainable, long-term solution might be found.
So what might the ‘unthinkable’ include? As one chief executive put it: “Outsourcing can contribute but the traditional outsourcing model has run its course and is not fit for purpose.
“Given the scale of the savings required, we need transformational change that delivers the same or better quality at 30% less cost - not the marginal improvements usually on offer. There need to be offers that reduce demand for local government services.”
We are seeing the early signs of authorities thinking holistically and about transformational reform in its biggest, widest sense.
‘Total partnership’ models, we believe, are the next step, in which the citizen becomes the focal point for contracted relationships between the public, the private and the third sectors, and these relationships have at their core the best that each party can offer.
Adrian Ringrose, chair, CBI Public Services Strategy Board, and CEO, Interserve