Gaming the Cuts: Anyborough in 2018

Leisure and education services across the country face the axe as councils struggle to deliver cuts that could amount to 50% of their real terms spending power by 2018, new research report from localism think tank NLGN shows.

NLGN’s new report, Gaming the Cuts, warns that decisions like Newcastle City Council’s to cut its entire culture budget is likely to be a harbinger of far deeper cuts as local government pulls out of significant service areas such as leisure and tourism. Council support for schools could also be hard hit as local authorities push the burden on to academies, putting pressure on childcare, school transport and free school meals.

The findings emerge from a budget “war gaming” exercise, supported by PwC, which NLGN conducted with senior local government officials from across the country, challenging them to set the budget for the fictional authority of AnyBorough Council, based on real council spending data and economic modelling from the Local Government Association. The findings were subsequently tested at roundtables around the country, with a total of more than 50 officials involved in the process.

The report on the options participants examined shows how councils will be under huge pressure to maintain the quality of social care for the elderly and adults with learning disabilities. Rising demand and falling budgets mean that even radical reforms such as pooling budgets with the NHS will not be enough to meet rising costs as the baby boomers retire. Some councils may even start paying ordinary householders to look after elderly neighbours.

Council tax rises and further redundancies seem inevitable. But even these will not be enough to fill the emerging budget gap. With AnyBorough based on a prosperous town in the south west of England, it seems likely that cuts in poorer parts of the country could be even deeper still. These cuts are hard to avoid even with imaginative efficiency savings and shared services, but councils can mitigate their impact by investing in innovative new services focused on prevention and driving economic growth.

The report calls on councils to speed up the pace of innovation and start piloting new ways of delivering services immediately. But NLGN also called on central government to take immediate action to help councils balance their budgets over the coming years:

• Demanding that the health service, job centres and police integrate their budgets with the local council so that services are redesigned to focus on preventing illness and worklessness, rather than just picking up the pieces afterwards.
• Major reform to local government finance so that councils take a fairer share of the proceeds of local economic growth.
• Conduct its own study into the cumulative effective of local government cuts to provide the public with an honest assessment of the impact of centrally-imposed cuts.

NLGN Director Simon Parker said:

“With no end to the cuts in sight, we are witnessing a historical shift in the range of services that councils will be able to provide. There is no getting away from the reality of these cuts – indeed, many parts of the country are facing a tougher future than AnyBorough. But with national support and local innovation, local councils can mitigate the impact of plummeting budgets through imaginative new solutions. Ministers and councillors must act now.”

Andrew Ford, head of local government, PwC said:

“The report highlights the practical implications of planning and managing sustained austerity for councils and the communities they serve. The challenge is no longer just an efficiency one about how councils operate, but instead a much more profound one about what they exist to do and what value they provide to local communities. Councils can only grasp the opportunities if they move quickly and if central government helps them to do so.”

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