The term “council services” often conjures up images of rubbish collection, street cleaning and road resurfacing. However, the services that local authorities provide are numerous and varied. There is hardly any aspect of domestic or local business life that is not affected or touched by the services offered by councils. This includes public health policy and mental health provision, parks and gardens, crime and safety partnerships, and communal engagement in all spheres of life for a civic area.

The last 10 years have seen unprecedented financial challenges and pressures for local authorities, with severe cuts to funding. Elected members and their officials have had to make complex and sometimes debilitating decisions about maintaining and delivering services to residents at a high standard and with the regularity needed for the effective discharge of local government.

As a SAS consultant Monday to Friday, I enjoy helping our customers use analytics to solve their business problems. In the evenings and weekends, I am proud to serve as an elected local councillor. Seeing the challenges councils are facing firsthand inspired me to write this series of articles. It has given me an opportunity to explore how analytics, which has benefitted many of our customers in the private sector and also in national government, could also help improve the lives of local residents. In particular, this series will examine the importance of using data intelligently. And it will also show how the use of analytics can play an important role to help councils continue to meet their objectives in these trying times.

The last decade

Unlike the private sector, local authorities across the country are not profit-driven, though they have strict statutory and regulatory responsibilities and financial requirements, especially concerning investments and funding maintenance. Their fundamental aims are to provide the right services to their residents today within a budget. Alas, that budget has been shrinking considerably in the last decade. A paper by the Local Government Association (LGA) has concluded that in the last 10 years, there has been a reduction in funding of 60p for every £1. By 2025, this funding gap will be £7.8 billion.

The diminishing budget has been down to a number of changes. In 2013, public health responsibilities, which includes smoking cessation and tackling obesity, moved from the NHS to local authorities. Whilst NHS funding has continued to grow, funding for public health is being reduced. That same year, council tax support schemes – which provided help to those on low incomes – were abolished, leaving the onus on councils to create their own support. Further changes are on the horizon, with councils being able to keep more of the funding raised from business rates (from 50% to 75%) at the same time as further government funding is phased out. It is very much an intricately complex picture.

In response to the plethora of changes, authorities have streamlined services left, right and centre. They have sought new ways of working, including saving a total of £805 million by sharing services. An example of the incredible efficiency achieved is how planning departments have halved their spending yet approved more planning applications.

Upcoming challenges

Looking ahead, the funding picture for local government is bleak. Further reduction is planned to the effect of £16 billion, along with increasing inflation. The delicate balance of continued funding cuts whilst maintaining resident services is dangerously close to a tipping point. The ramifications for both residents and services are starting to be felt. According to the LGA, homelessness has grown 11 times between 2012-2016, adult social care services are bursting at their seams, and child protection investigation has more than doubled from 200 to 500 in the last decade. Many councils have shut down nonstatutory services, such as libraries and leisure and sports facilities. Others have severely reduced support for the voluntary sector and reduced the frequency of waste recycling and collection.

More money?

What about the question of raising more money to fund these services? It is not as straightforward as that. Yes, councils will be able to keep more of their business rates. Surely that can contribute? The increase is coming whilst the government is reducing its revenue support grant. Increasing business rates poses risks to maintaining a strong local economy. Further increases to council tax, which a number of authorities have already made, is not the answer. Moreover, increases are capped by the national government, as are increases to services, which could lead to an overall decrease in usage. Reserves which many councils have are exactly that: a contingency for one-off projects or unforeseen circumstances.

The importance of using data smartly and the use of analytics can play an important role to help Councils continue to meet their objectives in these trying times. Click To Tweet

Three things are certain. First, the funding cuts are not going anywhere. Second, authorities are running out of options to find savings, having already cut services to the bone. And, finally, the impact on resident services will be detrimental. The next post will look at addressing some of those challenges faced by authorities. Please find more info here.