Local authorities need to take hard decisions

Author: CAMag - Nov 9, 2009

Local authorities must reassess their priorities against cost and innovate if they are to achieve the expenditure reductions demanded by 2011, the report from KPMG and think tank Localis, entitled "The Bottom Line – a vision for local government" recommends.

KPMG says the report is particularly timely because it suggests ways to meet the challenges raised by Audit Scotland's report "Scotland's public finances: preparing for the future". In order to achieve the necessary efficiency savings, councils should consider seriously moving beyond their current role as "service providers" towards becoming "commissioning and procurement hubs".

Jenny Stewart, head of public sector at KPMG in Scotland, commented: "With almost 10 per cent of UK GDP flowing through local government in one way or another, councils are at the forefront of the reform of public finances. Many parts of local government are innovative and progressive. However some of local government is still struggling with implementing modernisation. This report offers insights and ideas for those in local government that are interested in a fast journey to excellence and meeting the challenges raised by Audit Scotland's report "Scotland's public finances: preparing for the future."

James Morris, chief executive of Localis, added: "Councils must not be afraid to make tough decisions. Some are beginning to lead the way and it is up to others to take up the challenge and prioritise funding to match up with their core functions. Councils must innovate more in order to deliver high quality services to local residents. "

The report also suggests a number of other aspects of policy which should be assessed and where appropriate, changed. These include:

· If they have not already done so, councils should reassess all investments based upon their priorities in the local area. High risk investments should be focused on the main priorities for a local area. Councils should seek to achieve their investment objectives through innovative approaches such as risk pooling.

· Councils should commission new partnerships. These should focus on mutual interests along with pre-determined meaningful outcomes – which can be achieved through the use of fluid budgets. This should allow services to be more personalized around the requirements of the end user.

· Councils should set self-imposed targets (if not already set) – in the region of 10 per cent of gross revenue – to be raised locally. This could be aided through the use of existing financial powers such as TIFs and prudential borrowing more extensively.

Go to the original article here