Opinion: How are councils making savings?

Getting a picture on what’s happening across the country on council spending is difficult. We all hear stories, whether it’s the a plan to close a library or a conversation I had a few weeks ago with a friend who works in Brighton, who told me that the council had avoided almost all frontline cuts to services through efficiency savings.

Last week some surprising figures have appeared in an overlooked survey by the Financial Times. They show that at least half of the spending cuts that councils are making will have no impact at all on frontline services.

The Financial Times asked a series of councils how they had cut a total of £6bn from their budgets. The results are surprising:

  • Over 25% of the cuts are made with no impact at all on services – either through cutting out bureaucracy, energy efficiency or getting better deals from suppliers
  • Another 25% or so will either raise prices, restrict the service somewhat, raise additional funding from elsewhere or use demand prevention to avoid need for services
  • Only 15-20% of savings are made by explicitly cutting services, with another 25% unclear

Even on the widest definition of frontline, so that you define all cuts in staffing as automatically being frontline, you would struggle to get much more than half of the cuts having an impact on public services. This is an astonishingly good performance by councils on average – who will have saved something like 4% of their total budgets in a few months.

The savings made with no impact are worth examining in detail – because many of them can be made by councils where Lib Dem Voice readers live, and so can help protect frontline services:

  • Squeezing suppliers –  almost 10% of savings come from this alone
  • Efficiencies such as green technologies – Windsor & Maidenhead saved 15% of its energy bill overnight when it published its energy use live online, making people more aware of how they were using energy
  • Charges for waste – annoying if you have to pay them, but a good way to encourage recycling
  • Ending pointless services – for instance where I live Lambeth council wastes £350,000 a year on a council newspaper
  • Running council departments as efficiently as possible – again where I live in Lambeth the council wastes huge sums by leaving council properties empty and keeping council offices empty

There’s no way that cuts can be harmless, but we can all do our bit locally to show simple savings that Labour and Conservative councils are far too often failing to make.

Rob Blackie was the party’s Director of Research from 2003-2005 and was heavily involved in writing every Alternative Budget from 2000 – 2005, and in costing the 2001 and 2005 General Election manifestos. He has been active in London politics for 11 years, including running the only campaign to win a council seat from third place in London in 2010. Rob writes a blog on e-campaigning atwww.rob-blackie.blogspot.com.

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14 Comments

  • Liberal Neil 12th Apr '11 - 12:26pm

    Our local district council, the Vale of White Horse, has saved the entire amount that it has lost in Government Grant through efficiency savings.

    The two largest components of these savings have been through halving senior management costs by sharing a senior management team with the neighbouring district, and by going for a joint waste collection service with the neighbouring district.

    The new waste service has saved money both due to shared management and contract costs and to being a cheaper way of collecting waste. This has also boosted recycling rates to 70%, reduced landfill costs, increased income from recyclables, and reduced carbon emmissions through fewer journeys.

    County Councils should be looking at sharing services like Libraries, Youth Service etc. with other Councils to reduce management costs rather than closing Libraries and Youth Centres.

  • Last week some surprising figures have appeared in an overlooked survey by the Financial Times. They show that at least half of the spending cuts that councils are making will have no impact at all on frontline services.

    That’s still at least half that *will* affect frontline services.

    In your own figures tell us 25% will raise prices or trim services. So that’s 75% of frontline services will be affected.

  • Bedford Borough is cutting council tax by more than any other council in the country and keeping the libraries – and other front line services – open 🙂

  • I’d be interested to know what the difference is between ‘restricting a service somewhat’ and cutting it.

  • Matthew Huntbach 12th Apr '11 - 1:49pm

    In some cases this has been done at the cost of enormous personal stress on the workforce. Almost everyone I know who works in a public service job tells me they find the job massively more stressful than it used to be, and there’s often a very strong feeling that the bureaucracy involved in trying to make cuts while keeping services is more wasteful than what it saves – it ends up in penny-pinching bean-counting, and people doing things they know are useless because that’s what the bean counters tell them to do.

    The other really serious thing that needs to be considered is the impact of “We’re saving money by freezing recruitment”. This is often put forward as a good thing because there are no actual redundancies. But the reality is that it means anyone who is out of work and has a background in public service just can’t get back into their area of expertise because almost every job that is going, even if for token reasons it is advertised, is filled by redeployment. Given that it is somewhat random who leaves and creates an open position, you end up with a poor match between people and jobs. Too many jobs are filled with people who aren’t actually well suited to them but “HR twisted our arms into accepting this redeployment as it avoided them having to make a redundancy”. To many departments are struggling on with key posts empty or being done by someone far too junior who is “acting up” because they’ve been told to freeze recruitment.

  • Funny, if it’s all going as well as you suggest, that Warren Bradley, the Lib Dem Leader on Liverpool City Council is urging the Lib Dems to pull out of the coalition. Wonder what he knows that you don’t.

  • MacK – Liverpool doesn’t count. Everything is different there.

  • MacK – The notion that ‘he knows something that we don’t’ is of course nonsense. He just doesn’t like not being leader of Liverpool.

  • @Matthew Huntbach

    Yes, I agree, cuts are cuts no matter how you dress them up.

    In sunny old Richmond (Tory) it’s cuts cuts cuts.

    Jobs have gone and are going, a well used and isolate library is being shut, a well-used day centre for those with dementia has gone, various schemes for the disabled are being ‘consulted’ upon, etc etc etc.

    All that and our budgets were barely touched.

    What was this business with Sheffield? I heard the LibDems were managing to hold back on cuts because they’ve assumed that Labour will take over in May and have left it to them (something like £220 million worth of cuts to be made).

  • @Rob Blackie

    My impression of private sector (having worked in it all my working life) streamlining is that the aim is to keep cutting the work force and expecting those left over to take on new, additional responsibilities (the work that those leaving did).

    This tended to result in no lunch breaks, later and later nights, earlier and earlier mornings and weekend work. This was the same at several organisations and seems to be the same with my friends who are still working.

    Just how pro-Europe are we?

    Re – my above post and Sheffield Council, can you answer this question because I don’t know if the sources are accurate. I really hope they’re wrong.

  • Re – Sheffield City Council, it seems the information is very wrong as they’re making £80m of cuts this year alone.

    Apologies.

  • THis argument about councils sharing services, isn’t that the very antithesis of localism as it increases central control over wider geographic areas?

    I know both Tories and Lib Dems say they are committed to localism, so why propose solutions that undermine it?

  • Matthew Huntbach 14th Apr '11 - 10:54am

    Rob Blackie

    equally most organisations now routinely re-structure. If it’s done badly it creates stress, if it’s done well then it should make people happier.

    Re-structuring will always cause stress and be inefficient in the short-term, even if it reduces stress and is more efficient in the long-term. In my experience, it is often done far more readily than is necessary, and when it is done the short-term costs are just not taken into account. Often one finds it is restructured one way one year, then a few years later it is restructured back to how it was before. For example, one year we will be told it’s efficient to allow people at the bottom to make their own spending decisions, get rid of all that procurement bureaucracy. Another year we are told the answer to all our problems is to have a centralised procurement system which will be able to bulk buy and make strategic decisions, and it all gets put back again. There were meetings after meetings to get rid of it and train people to do it one way, then meetings after meetings to put it back together and train people to do it the other way.

    Part of the problem seems to be a reluctance of anyone to admit “it’s ok as it is”. Put anyone new in the top job, and they want to make an impact by engaging in restructuring, even if the arguments for it are dubious. Bring some consultants in, and they aren’t going to say “it’s all ok, carry on as you are”, are they? Not when they charge a fat fee so need to give the impression they’re doing something to earn it, and not when there’s further fat fees in managing the restructuring.

    Yesterday I was at a funeral, of a neighbour not a relative, so it meant I had chance to chat to a whole bunch of people (the deceased’s relatives) I didn’t know before, and yet the same story kept coming up again and again. Almost everyone I ever meet who works in public service says it – standards are deteriorating not just despite all that has been done in recent decades to improve them, but BECAUSE of what has been done in recent decades. The main effect of the constant efficiency drives and restructuring has been to demoralise and disorient. Those who prosper form it are fools who just do what they are told, even though it is stupid. Those with a real commitment to service are pushed out, paid off to keep silent if necessary, driven ill through stress quite often, because there is no place for those driven by real commitment to service rather than “yes boss, whatever you say” in today’s dog-eat-dog world.

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