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How to: Take control of the financial challenges in 10 days

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While there is still debate over whether a reduction in overall local authority costs of 20% or 30% will be required, there is now a realisation that the challenge likely to face local government finances will be significant and will require radical thinking.

At a lively workshop hosted by PricewaterhouseCoopers at the LGC Summit last week, the debate moved on to explore what chief executives’ priorities should be, as they begin to respond to the approaching ‘perfect storm’. 

The priority is the need for strong leadership from the top.  Where new forecasts on the size of impending cuts in public sector budgets hit the press every day, many staff, staff representatives, suppliers and customers of local authorities will be worrying about what this means for them.

These stakeholders need confidence that those at the top are on the case and taking full responsibility for addressing the challenge.  Making it publicly known that work is underway, that it is being led from the top and that appropriate people will be consulted, will calm many fears.

The urgency and scale of the challenge will be significant and we can draw parallels with the health sector, where we introduced expert ‘turnaround directors’

Steve Beet, Local government leader, PricewaterhouseCoopers

One key signal that the issue is being taken seriously will be the appointment of a senior officer to lead this work.  The urgency and scale of the challenge, however, will be significant and we can draw parallels with the health sector, where we introduced expert “turnaround directors”, to give a real injection of pace.

We believe that work should commence, in parallel, on a serious appraisal of the size of the local challenge, using checklists which identify all sources of potential pressure, alongside immediate work to review all current projects; get control of the cash; and launch quick win programmes, drawing in experience of rapid cost reduction and income enhancement programmes such as improving council tax collection rates.

This will allow space for a serious reappraisal of the future shape and role of the local authority, taking into account drivers such as the move to commissioning, greater localism and bringing together pan-public sector thinking from programmes such as Total Place.

In our view, these should be the highest priorities for chief executives and their boards in the next few months.”

Ten-point plan on tackling the impending budget cuts

  1. Make clear you are in charge. The objective is to bring stability where there was chaos.
  2. Appoint a corporate director to lead the programme. But not the head of finance - they’ll be needed for checks and balances.
  3. Get a handle on the size and timing of the challenge and how it will arise.
  4. Establish an immediate communication plan articulating the tough decisions that will need to be made.
  5. Review and prioritise all current programmes. Distinguish between ‘essential’ and ‘nice-to-have’.
  6. Get control of the cash. Review approval levels and delegated authorities. Challenge discretionary expenditure. Freeze recruitment. Defer refurbishment.
  7. Get members, staff representatives and suppliers on board.
  8. Launch a ‘quick wins’ programme. Set a target of 10% off budget allocations.
  9. Launch an elective severance programme.
  10. Launch a programme to define your vision of your organisation in three years’ time. Make decisions now on people, partnerships, investments and priorities.

 

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  • 2 Comments

Readers' comments (2)

  • Is this article a spoof?

    The thinking here is breath taking in its ignorance. The macho delivery doesn't hide it.

    Someone should send this to John Seddon. He would describe it as 'An Idiots Guide to Creating the Most Expensive Public Services in the World'. The irony!

    Seriously though, tell me how just one of those 10 points could possibly lead to a reduction in cost and an increase in value?

    Each one seems to do the opposite to me - the dumbest and sloppiest of the 10 being taking 10% of budget allocations.

    Arbitary cuts like this are not hard or savage. They reveal sloppy, weak thinking and will actually drive additional costs into the public sector.

    We should help the Government to stop creating costs, work tirelessly to drive them out and focus on managing value. If we did this, public services would improve beyond our wildest dreams and costs would plummet.

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  • If you want to know why the public sector is very broken, it might be helpful to look to the consultancies who have been advising the government over the last couple of decades.

    I thought that this was a spoof when I first read it (and I still half do). I will answer as if it is serious.

    Perhaps PWC could also set targets for each service, then write a plan (making sure it is SMART), before bringing in more accountants to count the wrong things quicker?

    No wonder they influenced ministers and inspection bodies, it fits into an audit view of the world, that lines it up in neat little lines, those at the top give orders (you know those clever ones with MBAs) that those at the bottom should follow. Bring in one of these powerhouses, to set targets and get the staff onboard (do it or get fired) and then this über boss can fix the world. No extra work for ministers or leaders. No change in thinking or behaviour.

    Doubtless this is the PWC program that it hopes will lure many chief executives to reach for their phones.

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