In a speech, CBI director general John Cridland said that local authorities need to make the most of market solutions to deal with cuts to central government funding.

He said that the individual actions of Whitehall, local councils and the NHS will ‘make or break’ public service transformation. 

In his speech, Cridland cited the London Borough of Hammersmith and Fulham for developing a single online customer portal for services including benefits, council tax and business permits.

He said: “It’s been a real success – with 70% of households registered and savings of well over a million pounds every year. 

“Yet other councils still have a long way to go. At Cornwall Council – for example – only 2% of transactional services are fully available online.”

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He said that councils needed to worry more about what digital services are provided, rather than who provides them.

“For me what matters isn’t whether services are “private sector” or “public sector” but whether they’re ‘good’ or ‘bad’,” he said.

On local services, we believe that if local authority leaders minimise bureaucracy and support growth, they should be able to make their case for greater powers. 

But he said that digital on its own was not a complete solution to transforming government.

“Shrinking the state without making it smarter isn’t sustainable,” he said.

“Gradual evolution – a few tweaks here, a few efficiency savings there – won’t be enough. Real transformation isn’t about evolution – it’s about revolution.”