It is clear from our research that things are not going to get easier for councils in the next five years; rather the reverse.
The number of potential variables, such as a possible change of government and the extent and timing of any local devolution, makes confident prediction extremely challenging.
And it is impossible to generalise. While some local authorities predict they will be able to balance their books up to 2020, others are forecasting very significant funding shortfalls by then.
Our new report, in collaboration with Grant Thornton, has proposed six possible scenarios.
The first scenario, which we’ve named “adaptive innovation”, describes councils that are creatively redefining their roles, influencing their operating environment and working closely with partners.
The next category is “running to stand still”. Councils in this group are well-led and managed, and can see a positive future if they can keep up the pace and there are no major shocks.
It is vital for the sector to consider what more it must do to manage its destiny
The next is those that only have a “nostril above the waterline”. These are operating on very short-term horizons, with the threat that even a small change in the environment may challenge their existence.
Councils that are reactive, with inadequate finances, and are retreating into providing statutory services only, are in the next group, titled “wither on the vine”.
At the extreme end of the spectrum is the “just local administration” category. These councils have either given up responsibility for key services or have had it taken away.
These first five scenarios assume that local government, if not fully master of its own destiny, retains significant autonomy over how it plans for its future.
The final scenario is called “imposed disruption”, and refers to councils that are subject to externally imposed change such as local government reorganisation.
A straw poll of 47 chief executives and strategic directors, undertaken at the Solace summit in Liverpool this month suggests that, although 21 chief executives think they are making “adaptive innovation” work, 22 felt they were in the “running to stand still” group.
More worryingly, four believed “imposed disruption” was closer to the mark – at least for parts of their organisations.
Our report recommended that:
- Political parties should consider wholesale change so that the next government is ready for serious discussion with the sector directly after the 2015 general election about a new local-national settlement
- Whitehall and the rest of the public sector should participate in constructive dialogue about what the future could look like
- Local government and its private and voluntary sector partners should agree that fundamental change is needed and plan for a transition to a more sustainable long-term framework
- Individual councils must understand which of the six scenarios they are in, and what they need to do next.
It is vital for the sector to consider what more it needs to do to manage its destiny.
Will local government take the opportunities, likely to be presented soon, to re-shape its dialogue with central government and build on best practice in collaboration between councils and across public services?
The necessity for a coherent narrative about a confident future has never been greater.
Catherine Staite, director of the Institute of Local Government Studies (Inlogov), University of Birmingham