Town halls adapting to change of role as cuts bite

COUNCILS are facing major changes in how they work that extends well beyond coping with funding cuts, according to private sector experts.

Authorities are having to adapt to a new era of prolonged austerity just as they are being asked to take a more active role in generating economic growth.

Roger Marsh, northern leader for government and public sector at PwC, said: “The 2013-14 financial year will significantly test the local government sector yet again as Whitehall’s settlement bites and councils face rising demand for their services from many sections of the local community.

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“The strength and resilience of local government is again shining through, however, as councils seek to continue modernising how they provide services, with many now investing further in digital channels to provide more accessible and efficient services.

“Building on their partnership successes over many years they are also creating new models of support around social care, health and many other areas – this will help manage demand and make better use of public resources across our region.”

Alongside their longstanding responsibilities for local services, the Government is also expecting councils to play a greater role in stimulating economic activity in their areas.

Ministers have changed the way authorities are funded so they can keep a share of the growth in the business rates raised in their districts.

Councils in South and West Yorkshire, along with York, are developing “combined authorities” which will take control over spending and decisions in key economic areas such as transport and skills following agreements reached with the Government last year.

Further moves towards devolution will put more emphasis on local authorities working with local enterprise partnerships on the economy.

Justine Andrew, director in KPMG’s public sector practice, said: “It is the most forward-thinking authorities that are focusing on their role as a driver for regional economic growth.

“Working more closely with the private sector will be increasingly critical. From collaborating through the region’s LEP boards to wooing the private sector as a revenue stream for boosting the area’s bottom line, partnering for growth will be a far more influential force than previously.

“Assuming Whitehall ‘lives the dream’ and actually delivers on its proposals for devolution of decision making and funding to local and regional policymakers, then the region’s local government organisations can take responsibility for being a force for economic growth.”