Budget set to increase transformation pressure on councils

The need for local authorities to find efficiency savings through ICT grew yesterday as chancellor George Osborne piled more pressure on local government budgets.

His Summer Budget did not mention ICT directly, but experts believe that £12bn of welfare cuts outlined in the statement could lead to increased demand for council services.

Paul Dossett, head of local government at audit firm Grant Thornton UK LLP, said that measures, including a reduction in household benefit caps and social housing rents, are dependent on the economy growing to provide the jobs suggested by Osborne.

He said: “If these jobs are not available to all localities, there will undoubtedly be increased pressures on local authority services at a time of further local government funding reductions.

“The financial and social cost of homelessness remains a concern in many areas.”

However, he added that the full extent of cuts to local authority budgets will not be revealed until later in the year.

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He said: “The chancellor has confirmed that deficit reductions totalling £37bn will be required over the life of the new Parliament, but only announced approximately half of these – with measures relating to welfare and to tax evasion and avoidance.

“Departmental spending cuts – including those affecting local government – will not be announced until this autumn’s Spending Review.

“So we have a few months to wait and see how accurate the Local Government Association’s forecast of £9.5bn funding reductions to local government over this parliament will be.

“The Chancellor did, however, confirm that no in-year departmental cuts will be as severe as any year in the last Parliament.

“We believe the new secretary of state will be more robust in his defence of local government spending than his predecessor.”

Mick Wayman, head of public sector at Vodafone UK, said: “Public sector organisations will need to transform the way certain services are delivered and the way they work in order to find longer term, sustainable cost efficiencies.

“Technology can support and enable many of these necessary transformational changes – saving money while protecting and even improving public sector services.
“The reality of yesterday’s budget is that public sector organisations cannot afford to continue delivering services as they do today.  Local and central government should start thinking differently about the way public services have traditionally been provided and embrace digital transformation to drive savings and improve the quality of services they provide to citizens.”

Andy Soanes, chief technology officer of supplier Bell Integration, said: “National and local government ICT projects across the board, from Whitehall to Whitby, will be feeling the impact of reduced budgets.

“In this environment, a poorly planned or implemented project could have even greater repercussions than usual.

“After all, if a project goes over-budget, where do you take the extra investment from? Quite simply, delays and budget overruns will need to be kept to an absolute minimum, since projects can’t simply be put on hold indefinitely until austerity ends.” 

A spokesman for ICT management company Solar Winds said public sector organisations need to focus on improving the running of their ICT departments, many of which it said have yet to embrace modern working practices such as mobile working.

He said: “As public sector IT pros review their responsibilities within the new spending constraints, they should put a new, detailed technology and data security plan in place which covers people, process and technology.”

Colin Marrs

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