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Transforming local authorities: three levers for change

Claire Hampson Claire Hampson

With local authorities needing to act now to avoid financial failure, we explore the three key levers they can use to deliver genuine change: transformation, modernisation and reprioritisation.

Public finances have been under tremendous and historic pressure in the past couple of years. With demand for council services rising and pandemic-related support potentially ending, local authorities face significant challenges to their financial sustainability. Delivering change in such an environment isn't easy – but it's essential if councils are to make the most of operating and financial efficiencies, and the opportunities that can come from modern service delivery.

Here we look at three levers that can be used to support and effect change. We explore common stumbling blocks, potential change opportunities and offer three real-life case studies of how councils can transform, modernise and reprioritise.

1 Transforming local government

So often service delivery is driven by ‘this is the way it has always been done’ with discussions getting stuck on how to deliver services (in-house, outsourced, etc). These are key debates. But before considering the ‘how’ question, it's important that councils take a step back to consider what they want to deliver and what outcomes they want to achieve. This can create space to fundamentally reconsider what services are and how they are delivered.

For example, are libraries just for books or are they actually places for knowledge, learning, community and connection? Furthermore, councils often have a siloed approach to services and may miss the opportunity to deliver services in a more joined-up manner, which could create efficiencies and deliver better outcomes for residents. For example, joining adult social care day services with leisure to create a rehabilitative model, or co-locating services with libraries to create community hubs.

2 Modernising public services

What are modern public services? Local government digital transformation is just one aspect of how modernisation but public sector transformation goes much deeper than a digital dashboard. Councils need to address the following three elements to provide new solutions to old problems.

Customer engagement

The majority of councils still have significant customer service centres answering tens of thousands of calls a year. In a modern world we're used to self-service facilities that are available 24/7 and provide a live update on the status of our transaction. It's critical that councils look to meet this public expectation to address customer experience and streamline service delivery. While council’s should explore modernising the way they engage with customers it's important that specialised support and guidance is still given to those that need it.

Efficient processes

Across organisations there are significant opportunities to reduce manual, repetitive tasks by introducing automation to improve effectiveness of systems and processes. Digital transformation will generate opportunities for reducing errors and risk, as well as speeding up processes that have likely evolved over time, thereby creating financial efficiencies.

Data and insight-led decision making

Often when we talk about data with local authorities, it's Power BI dashboards that come to mind. But the real key to unlocking data that will have a genuine strategic and operational impact is to explore innovative ways of data capture and bringing together different datasets. For example, adding scanning devices underneath waste collection trucks to scan roads for potholes, giving a live update and reducing need for highways scanning teams. Or bringing data together from multiple systems in order to get a full system view of health and social care.

3 Reprioritising to deliver the vision

Councils spend a huge amount of time and energy to ensure that they have an ambition and vision that addresses the challenges of the place they serve. It's this that often makes councils unique. However, so often the budget-setting process involves taking a copy of service spend from the previous year and fiddling around the edges with savings or investment.

What's needed to deliver the vision is to take a more fundamental look at the budget to ensure that investment is being made in areas that will genuinely help move the dial on strategic ambitions. This approach creates an opportunity to invest in critical areas but also disinvest from areas that aren't contributing.

A balanced approach tailored to local context

The council’s operating model for the delivery of services and the acuteness of financial distress will determine which of the three levers for change are most appropriate at which time.

For a council facing a large budget deficit, with limited usable reserves as a cushion, reprioritising may be the first step in order to give them a stronger financial foundation on which to build. Exploring opportunities to modernise and transform may come later.

A council that is more financially sustainable, with a manageable budget gap over its medium-term financial position and more robust usable reserves, will be in a different position. It may explore transformation and modernisation strategies initially, using data and technology to drive a new approach in the delivery of services.

To discuss the opportunities for your local authority, contact Claire Hampson.