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LEADER - SPENDING REVIEW WILL COME AT COST

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More savings must be made to fund service demands...
More savings must be made to fund service demands

By LGC editor Richard Vize

The comprehensive spending review will be the moment local government's books start to teeter rather than balance.

According to this week's LGC poll, over half of councils expect services to suffer to meet the review's efficiency targets.

Compared with other parts of the public sector, local government delivers strong budget management. Finance directors look with disdain at the runaway debts being accumulated by NHS trusts, while councils' performance in delivering efficiencies

far exceeds the civil service. The Ministry of Defence continues to mismanage vast procurement projects.

But it would be wrong to assume additional efficiencies cannot be secured. A growing number of councils routinely build efficiency savings into their budgets.

There are savings to be made by sharing back-office functions if more councils are prepared to face the political decisions that entails.

The strides being made in procurement still leave much ground to be covered. Energy supply is just one of many procurement opportunities to both cut costs and tackle climate change.

The difficulty is generating enough efficiencies to meet growing demands, at a time when spending will be severely curtailed. As David Clark argues this week, local government faces a real terms cut. Meanwhile, waste management will require major investment over the period covered by the CSR, while the demands of care of the elderly are being exacerbated by NHS cost-shunting.

But as well as highlighting the dangers to services, LGC's poll also contains important messages for Sir Michael Lyons as his marathon inquiry enters the final straight (again). More control over business rates, more incentives to grow businesses and control over transport are seen as key levers for developing the local economy.

If the Treasury cannot give with one hand, perhaps it can give with the other.

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