Introduction

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Wednesday, 20 October 2010

More action needed to allow the public sector to get bigger bang for its buck


Lee Baker
COUNCIL officials have long planned for scenarios that will see their revenue budgets shaved by a quarter, and have said that half of this can be absorbed without affecting service delivery by securing greater efficiency savings. 


They accept that new delivery models - contracts that fuse client, consultant and contractor, procurement and projects that cut across service areas and administrative boundaries -  allow councils to do 'more for less'. But they want reforms to allow this to happen: maximum financial freedom, minimum Whitehall interference.


They will be reading the small print of the spending review to form a judgement as to whether or not the Chancellor has delivered this. But the Local Government Association's immediate reaction this afternoon suggested that ministers have not gone far enough.


Baroness Margaret Eaton, the LGA's chairman, said that ministers had to "move much faster to redraw the way public services are delivered". While ring-fencing has been removed from local authority revenue allocations, what will be done to allow the public sector to get bigger bang for its buck by merging funding streams held by other bodies?


Leicestershire and Leicester councils wanted funding streams that help deliver economic development to be rolled into a single pot - to end the Whitehall turf war that means the Department of Business, Innovation and Skills, say, may not accept funding being given to a transport project even if it unlocks projects that deliver jobs.


The spending review did announce that £4bn of funding from Whitehall departments will be "rolled into formula grant". The implication, of course, of removing restrictions from budgets and letting councils decide what projects to prioritise on the ground could, of course, mean that transport loses out.


As Steer Davis Gleave said in its analysis of the Spending Review today, it will be interesting to see what happens to the new formula grant from the DfT and whether highways and transport departments can hold on to their allocation. More than ever before, they will have to think outside a transport silo to prove the worth of investing in transport.