AROUND half of councils believe the massive savings required in the next five years are achievable – provided councils tackle reform head-on and throw away the rule book.

A survey carried out by LGiU and the Municipal Journal last month revealed that local government finance is “in a mess”, with more than 80% of councils believing they will dip into reserves this year to make ends meet.

The removal of the council tax subsidy this year has resulted in the majority of councils posting tax rises this month as they begin planning for a further cut of 40% in real terms funding over the next four years.

However, the long-term outlook is more positive – with more than-half of authorities believing that the targets over the next five years can be achieved, according to efficiency agency iESE. But only with a radical and transformational change to a council’s operating model and ways of working.

The views emerged from the national consultation carried out last year by the Improvement & Efficiency Social Enterprise (iESE), which consulted councils on a proposed model for council reform.

More than 80 councils responded to the consultation on the iESE 3R model – which groups transformation activity into three levels based on Reviewing, Remodelling and Reinventing services.

The consultation – “From Surviving to Thriving” - aimed to get a picture of where councils are comparatively on their reform journeys – highlighting best practice savings models, and providing a single roadmap to reforming the sector. It is the second in a series of three white papers from the agency, which have been tracking local council views on reform and engaging them to create a single model for achieving savings.

iESE has worked with 90% of councils in the UK, delivering combined authorities, shared service projects and organisational restructuring support.

Asked whether the savings could be achieved, the survey results reflected the immediate reaction in the LGiU data – but when asked about the longer term picture, councils were more positive, with 56% believing that over five years ways could be found to meet the funding cuts. 90% believed it can only happen with fundamental redesigning of authorities.

John Knight, principal consultant at iESE, said: “The results at first glance might seem contradictory – but when you look at the detail, it is clear that the picture is more complex than just the short term pain that is being felt.

“For ten years councils have had to look at maintaining services as they are while trimming budgets, seeking efficiency savings and looking at containing costs. However, when facing savings of this magnitude, it’s time to think differently.

“So despite the challenges ahead, we know of many authorities who are seeing this as an opportunity to re-shape their offer; to fundamentally stop trying to tweak broken models and start from scratch to build services based on customer value – rather than traditional expectation and ways of doing things. And that includes challenging simple notions around ‘statutory’ and ‘discretionary’ services.

"The best outcomes for authorities in the present climate come when they are willing to take a whole organisation approach and reinvent the service provided around value to the customer. Those authorities have found much larger savings as well as service improvements – they have been able to accurately identify where they are over-delivering services, based on out dated assumptions and untested views, and re-shape them depending on exactly what people need. Some tough decisions will have to be made. It’s hard, but it’s not difficult"

Having analysed the data from the authorities that took part in the consultation, iESE is now preparing its third and final white paper in March, which will set out proposed solutions based on council feedback.

Andrew Larner, Chief Executive of iESE and John Knight will be exploring the themes from the second white paper at an upcoming conference entitled ‘From Surviving To Thriving: Re-shaping public sector service delivery to meet the next spending review challenges’ in Manchester on April 26th. To find out more please visit