Proxima Blog

Amid the cuts, Local Authorities can’t have it both ways

  

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Last week, 90 Liberal Democrat councillors wrote to The Times remonstrating about the speed and direction of Government spending cuts.  They argued, understandably, that their already ongoing spending reduction programmes had gone overlooked by Central Government and that its annual three per cent budget savings stood at odds with “runaway” spending on Whitehall.

Indeed they have been overlooked and, at this time of year, it becomes even more difficult to work out exactly where those cuts have occurred.  It certainly isn’t to Local Authority highways or infrastructure budgets as those who have been forced to slalom through roadworks in recent weeks will attest.  This is symptomatic of the inevitable annual race to justify leftover budget among local Government departments for fear of having spending power restricted the following year.  Every February, two months before the end of the financial year, we are each faced with road works, improvements and upgrades.  Whatever they’re called, they amount to the same thing and, at the current stage of the recovery, they are luxuries that need proper planning.  If they aren’t essential, the money needs saving for something that is.

The Big Society concept relies on a spirit of collaboration, mutual interest and creative deployment of reduced budgets.  How, then, can it be acceptable for vast sums be squandered on arguably superfluous projects that appear to exist solely to enable department heads to justify excessive budgets? 

Local Authorities can’t have it both ways – they need to demonstrate that they’re taking the need for cuts seriously, or they need to come clean about where taxpayers’ funding is genuinely required.  Few people will take issue with projects that demonstrably improve the services that they receive or facilities that they use.  So a balance must be struck, but this balance must include a renewed focus on the value for money that the public sector achieves from its investments.

What is needed is a more joined up approach to spending and this year the public sector has a chance to demonstrate that it is in control of where funds are being deployed.  Both Cabinet Minister Francis Maude and Chancellor George Osborne made it clear that the standards of public sector procurement have to improve and the efficiency review overseen by Sir Philip Green highlighted fundamental problems with the lack of commercial common sense in Government spending.  For the remainder of the year, salaries are fixed, so most of the state's discretionary spend in the next two months will be with its suppliers.   Suppliers are attuned to this annual spending ritual and the public sector’s ability to hold them to account for the value and service that they deliver will provide a good indication of whether the message is getting through.

A major undertone in the councillors’ letter is their anxiety that the cuts and their structure will harm public services in their respective jurisdictions.  Given this concern, surely councillors should be maximising the value created by their investments, rather than spending the remaining cash on largely inconsequential projects that serve merely to make numbers match at year end?  Without underestimating the difficulties caused by the economic conditions, one could argue that the problem with front-loaded cuts can, to a degree, be offset by making best use of existing funds – spending them when and where they are really needed and making sure the supply chain is managed in the right way. 

The fact that central and local Government appear to be disconnected, to one degree or another, is an additional cause for concern and hardly an indication that The Big Society encompasses us all.  That is a story for another day, but it bears repeating that, for businesses to make their spending more efficient, it requires proper communication and proactive engagement in order to put the right processes and behaviours in place.  If this isn’t replicated in the public sector, we will run into these bumps in the road time and time again.  Next time, the budget might not stretch to their repair.