Local authorities face ‘perfect storm’

LOCAL authority chiefs are facing a “perfect storm” created by the combination of increased public service demands and funding constraints.

That’s according to the accountancy firm PricewaterhouseCoopers which has polled around 20 chief executives leading some of the largest local authorities with a combined annual spending commitment of £5bn.

They said they faced: cuts in central government funding; a “dramatic” increase in social care costs; the loss of revenue from local authority property sales as prices continue to fall; pressure for cost reductions and efficiency gains; and the need to top up funding of the local government pension scheme

Steve Beet, North West partner and head of local government at PwC in Manchester said: “We predict that local authorities across the UK will have to reduce their overall costs by 25-30 per cent.

“The options available to local authority chief executives start with launching quick win programmes such as improving council tax collection rates and initiatives to raise additional revenue on discretionary services such as planning advice provided for free in advance of a planning application.

“The only way to really face the problem, however, is through dealing with the tougher and long-term decisions, looking at the relationship between local government and other public sector bodies such as Primary Care Trusts and police forces, and making hard decisions to prioritise services.”