More nonsense about frontline services

Almost as soon as Manchester announced its spending cuts, ministers swung into action, heaping the blame on cynical councillors and inefficient managers. “This is a cynical move by a Labour council, which is intentionally cutting front-line services,” said local government minister Grant Shapps, “You only have to look next door to Trafford to see how more innovative councils are taking steps to protect the front line.”

His boss, Eric Pickles, insisted,  “It’s possible to do more for less and protect frontline services.”

This was to be expected. As Patrick Butler noted last year, “The government has effectively outsourced responsibility for spending cuts to town halls.” It can therefore cut their grants, attack them for not making savings, and then blame them for any cuts to services. Not our fault, guv, it’s these profligate loony left councils.

Even a cursory glance at the data blows the ministers’ claims clean out of the water. Compare Manchester’s funding cuts to Trafford’s. Manchester must cut 8.9 percent of its budget this year and 6.97 percent next year. Trafford only needs to cut 3.79 percent this year and 3.43 percent next year. Hardly comparing like with like is it?

The Local Government Chronicle’s Allister Hayman wrote a piece yesterday debunking the myth that cuts to frontline services can be avoided. The sharing of services by three London boroughs, held up by Mr Shapps as a fine example of efficiency, will save, at most, 16 percent of the cuts the councils need to make. A significant contribution, certainly, but hardly the panacea that government ministers are claiming. In fact, one of the three boroughs has already announced cuts to frontline services and the other two will surely follow suit. Shared services will take councils so far but they come anywhere near to solving the problem.

All the claims by politicians and journalists that local councils could avoid frontline cuts have one feature in common – they are almost completely data-free. Usually, no figures are quoted at all. When big numbers are thrown around it is usually without any context or comparison.

You only have to look at the overall figures to see the size of the problem. Local government will be expected to save around 14 percent over the next four years – roughly 3.5 percent per year. Some councils will have to save considerably more than that. Manchester, as we have seen, needs to lose around 15 percent in two years. Easy, say the politicians and armchair pundits. Just apply some private sector discipline to local authorities..

So if it’s that easy, what sort of efficiency improvements have private sector service organisations made in recent years? Using ONS figures, KPMG calculated that, on average the private sector has done twenty percent over ten years – that’s about 2 percent per year. Much less than average annual saving expected from local authorities and nowhere near the amounts places like Manchester are expected to save. Even the manufacturing sector, which is really good at efficiency savings, only did an average of 4 percent per year according to the CBI. A good result but still short of what many councils will need to do.

Next time you get into a discussion with someone who insists that efficiency savings in local government are easy, ask him or her for an example of a service organisation that has cut its running costs, without affecting its customer service, by 15 percent over two years. Or even, to make it easy, one closer to the average local authority cut – 7 percent over two years. You will probably find that they struggle to come up with an example. There is a good reason for this; such organisations are few and far between. Very few, especially in the service sector, have cut so much so quickly. As Robert Peston pointed out, even the hard-headed capitalists at RBS are giving themselves four years to cut 15 percent off their running costs. That’s twice as long as the council bosses at Manchester have.

So all this stuff about efficiency savings, back-office cuts and shared services is just noise, as are the silly stories about fat-cat councillors forcing spending cuts so they can preserve their perks. You could put all local authority back offices into shared-services, or even sack the lot of them, and it still wouldn’t get you your 14 percent savings over four years. You could replace your epicurean councillors with ascetic monks and it would barely touch your budget shortfall. Whatever government ministers and their cheerleaders in the media might say, a budget squeeze on this scale will lead to massive cuts to frontline services. Anyone who says that it won’t is talking utter nonsense.

Hat Tip: 24 Dash for this excellent cartoon.

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9 Responses to More nonsense about frontline services

  1. Pingback: More nonsense about frontline services - Rick - Member Blogs - HR Blogs - HR Space from Personnel Today and Xpert HR

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  3. shodanalexm says:

    Absolutely right.

    The most astonishing thing about the whole situation is that the Government has the barefaced cheek to stand up and make these utterly implausible claims in the first place, presumably with the expectation that they’re going to get away with it.

    In any other organisational context, if senior staff started standing up and making such outlandish claims about the scope for change – that had no grounding in reality or precedent – we’d have serious doubts about their competence and/or integrity. And the owners would start thinking that maybe it’s time to move the management out or sideways before the whole thing falls over. Yet there doesn’t seem much effective leverage over the current crowd of ideologues.

    Everyone can see this is going to be a car crash. Unless they are complete detached from reality, that has to include the architects of destruction squatting in Whitehall. We can only assume they don’t care.

    Good to see the local Libdems organising to protest in The Times today. But I don’t suppose that will have any more leverage. Cllr Kemp has probably already burnt his boats with CLG with his riff on Pickles and Shapps as Laurel and Hardy.

    And I’ve already seen that move by the Libdems being dismissed as politicians complaining out of self-interested concern for their jobs.

  4. Doug Shaw says:

    I am a man with ideals forged in the time of the punk movement. I recall a sense of anger and overboiling frustration in the the late 1970s and early 1980s. I’m wondering when we’ll see its like again. Not long now I fancy.

    In other news, I was strolling through Westminster this morning and I happened to notice the PM’s window was open. Familiar music was emerging. Being curious I spied into the open window and blow me down if I didn’t see David Camoflage and “Boy George” Osborne singing and pogoing to old faves of mine, The Damned. For those unfamiliar with this music, allow me to share a verse from their 1979 hit Smash It Up :

    “We’ve been crying now for much too long
    And now we’re gonna dance to a different song
    Gonna scream and shout til my dying breath
    Gonna smash it up til there’s nothing left”

    Next on the turntable came “I Just Can’t Be Happy Today”, also released in 1979. A couplet from this rather dirgy tune:

    “They’re closing the schools
    They’re burning the books”

    If I hadn’t seen it with my own eyes…..

    • patrickhadfield says:

      I like the punk analysis – that was my education too!

      The parallels are startling. But it was the poll tax which really brought people out on the streets…

  5. Rolo Tamasi says:

    You fail to put these relatively small reductions into the context of the recent increases. Some councils are only having to go back to 2009 levels of spend.

    There is no point in denying the deficit.

    The quicker its back in balance the sooner the interest bill stops rising.

    Of course if our credit rating slips, like some other countries we will have huge interest rate increases and then the big cuts will be forced upon us.

  6. Rick says:

    Rolo – I’ll take these points in the order you raised them.

    Which councils are ‘only having to go back to 2009 levels of spend’? Please elaborate.

    In any case, 2009 levels of spend in 2011-2012 actually amounts to a cut, by the time you have factored in increased demand and inflation.

    I have never denied the deficit.

    Can’t argue with point 3 as it is a statement of fact. It doesn’t mean, though, that the best way to reduce the deficit is to cut spending.

    Is there any evidence that our credit rating is in any danger of slipping?

  7. patrickhadfield says:

    Once more you have written what I was thinking about… Uncanny!

    I’m just writing about the cuts and bureaucratic responses to change. I’ll need to look at Doug’s post on public sector culture and change, too…

  8. Pingback: Change and the Public Sector « Patrick's Blog

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