How are local authorities responding to growing financial pressures, and what can we learn?

New Local is partnering with UCL’s International Public Policy Observatory (IPPO) on a research project focused on the severe fiscal constraint faced by local authorities.

The aim is to better understand how local government is responding to the financial crisis, and if there is potential to share practice. Drawing on these insights, the research will make recommendations for both local authorities in responding to financial constraints and to inform national policymakers about how local areas could have more flexibility and resilience to operate effectively despite resource constraints.

Explore initial findings:

How Local Authorities Are Thinking Differently Under Unprecedented Financial Pressures

This research is particularly timely, says Jessica Studdert, Deputy Chief Executive, New Local, as the current operating environment for local government is increasingly constrained:

“We need to build a clear understanding in real time of how local authorities are responding to financial pressures. The sector is currently at the receiving end of a series of short term, disconnected decisions and national responses so far have not measured up to the scale of the challenge. We hope this project offers a route to exploring what a new direction for the sector could look like, where barriers to achieving more impact are identified and removed, and longer term solutions to financial challenges are put in place.”

Early findings

In our early scoping phase we have asked local authority staff how financial pressures have shifted in recent years, and how their councils are responding to these unprecedented fiscal challenges.

Some clear themes emerged, which inform what we will explore in the next stages of the project.

There’s an overwhelming sense that the real-life connection between how local government is funded and what it needs to deliver has been lost. Local public services are grappling with demand pressures outside their ability to control, which have their root cause in longer term structural challenges. Trends such as ageing and deepening inequality. In addition to receiving reduced funding, local authorities are confronted with complex and inadequate provider markets which mean that costs are high but quality can be low. 

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