Joining up is hard to do

So three London boroughs have studied how they can merge entire departments, including the ones delivering or commissioning highways, transport and parking services.

The report from Westminster, Kensington & Chelsea and Hammersmith & Fulham on ‘Tri-borough Working’ has concluded that the savings to be had from fully amalgamating two highways and transport departments could be as low as £350,000 a year, or, in the best case scenario, £500,000. The biggest savings are to be had elsewhere.

Potentially frontline parking services could also be joined up, to reap further savings, on top of £300,000 that could be saved by merging two councils' back-office parking departments. Again, worth having, but still small beer when you consider that the three councils face a collective £100m blackhole from 2012/13 until 2014/15.

Part of the difficulty is that due to the contracts Westminster holds, that authority could not join any highways, transport or parking merger with the other two authorities until 2014, and even then only if either Westminster, or the other two authorities, were to decide to change their delivery model.

Unlike the other two councils, Westminster has a slimmed down, commissioning department, with few staff to either provide services or to micro-manage those provided externally. Hammersmith & Fulham and Kensington & Chelsea will need to decide whether or not this model suits them.

This will require “much more detailed work to full understand how the range of highways functions are undertaken in all three boroughs and the extent and cost of policy work, service commissioning and operational management and delivery. Only then can a properly informed decision be made”, the report says.

So it's not only about merging council departments, which will of course make it easier to reduce staff overheads. It's about a more fundamental reappraisal of what a council highways and transport department is for. That's where there could be far bigger savings.

We can limit the impact of these cuts

Amid all the stories of doom and gloom, it's easy to forget that not every cut means a reduction in service. Take Oxfordshire County Council, for example. The authority is cutting its bus subsidy budget by £900,000 for the coming financial year, but predicts "very little impact" to services.

The council's revised procurement process has seen "more competitive bids for subsidised services overall". They are not the only ones. The Association of Transport Co-ordinating Officers latest annual survey of bus contract prices showed that in 2010 the industry had its first significant fall in contract prices for 13 years.

There's an argument to be had about the extent to which efficiencies can limit the impact of the cuts in funding for local government. But it's clear that, in some areas at least, both the way that the client arranges procurement, and the way that operators provide services in response, could be overhauled in order to make the available money go further.

Separate procurement of transport in different departments can be merged. Rigid contracts that prevent innovation by providers can be loosened. Productivity can be increased - as the Local Government Association has acknowledged with its programme to improve it.

It is a matter of urgency that these things are done now, given rising costs, and given falling budgets. That is not to say that the reductions in funding can be pain-free across the country, given the size of councils' budget black holes, and given that where efficiencies have already been made, the scope for further savings will be less.

But residents will not forgive councils or contractors that simply throw their hands in the air and say that there's nothing that they can do, because there is.