Delivering better for less locally

Draft text of the speech - may differ from the delivered version. Thank you. I am delighted to be here today. This conference offers a stimulating…

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Rt Hon Lord Pickles

Draft text of the speech - may differ from the delivered version.

Thank you. I am delighted to be here today.

This conference offers a stimulating agenda, which I hope will provide you with ideas on how to meet the challenge of deliver Better for Less.

But exchanging ideas and information is just the first step. We need to use events like today not just to be inspired by the best, but to develop firm plans to improve efficiency and services.

I recognise that this is a testing time for local government. But tackling the deficit, and continuing to ensure economic recovery, is the most pressing issue facing Britain today.

Local government accounts for around a quarter of all public expenditure and it is right therefore that local authorities play their part in that recovery.

But in order to meet these economic challenges, local authorities need to become ever more efficient across all services.

There is no guarantee local government budgets will stay the same in the future, but the public will expect all levels of government to continue to deliver quality services.

This is not just about working with smaller budgets. It is about improving productivity - seeking out new and innovative ways of providing or transforming public services. Many councils have already successfully delivered savings, whilst continuing to provide quality services for their communities. However there is still much more that can and must be done.

A core principle of the Open Public Services White Paper is wherever possible to bring a range of providers in, competing to offer better, responsive and more economic services.

The white paper, published over the summer, acknowledged that local government is ahead of central government and the wider public sector in terms of open commissioning.

But the challenge is now to extend open commissioning widely, to bring innovation and expertise in to the provision of local services, both for the community and individuals. The Government is determined to ensure that community groups and social enterprises, as well as the private sector will be able to bid for public sector contracts.

We have already announced a package of measures to help them do so:

  • Contracts Finder - a one stop shop to find procurement opportunities, tender documents and contracts online, free of charge. Over 1600 contracts have been awarded to small and medium sized businesses via this route to date.
  • Simplified ‘pre-qualification questionnaire’, which means, through contracts finders, suppliers now only need to tell us prequalification data once.
  • There is evidence that the value of local authority contracts going to third parties, including the Voluntary, Community and Social Enterprise (VCSE) and the private sector is going up year on year - third party contracts accounted for 29 per cent of local authority service expenditure in 2009-10 according to DCLG data. The White Paper sets out ways that local authorities can open up its commissioning approaches to new areas, and decentralise further.

Of course, each local authority must find its own solutions.

This is not about central government telling it how or what it should do. That is now a localist matter. But the days when there was a monopoly in the provision of services are over, and growing evidence that as long as they are delivered to the highest standards, people are indifferent to who they are provided by.

We are, therefore, breaking down barriers that stop councils, local charities, social enterprises and voluntary groups working together, sharing responsibilities and budgets for the benefit of those who need their help.

I know that many local authorities have taken up the challenge to deliver better services for less money. ‘Authorities are doing everything they can to become more efficient and make taxpayers’ money go further.

Still, there are a multitude of things councils can do to deliver significant savings and protect frontline services, such as:

  • Cutting out waste
  • carrying out smarter procurement
  • sharing services
  • more effective management of assets and capital investment
  • reducing fraud.

Many councils have already started on some of these, but, if I may, I would just like to cite some examples of what is being and can be achieved.

Starting with better procurement. Local government spends £50 billion a year on outside contracts and has the spending power of Tesco. Through working collaboratively with other local authorities and other bodies, private and public to procure and deliver services, significant reductions in expenditure can be made.

The North East Improvement and Efficiency Partnership, for example, is using a strategic plan to maximise the social, economic and environmental impact of procurement and saving £70 million over five years. This entails up-skilling local authority procurement teams; introducing common policies and practices; and fully engaging with suppliers.

Significant savings can be leveraged from reducing the costs of management and support services.

Building on existing collaborative working arrangements, Cambridgeshire and Northamptonshire County Councils have integrated all back office support services - with an estimated saving of £2.5 million each year.

Sharing resources - with other councils and organisations in the public, private and voluntary and community sectors - will help reduce the costs of delivering services by removing some of the duplication.

With Cllr Cockell beside me, I must point immediately to the co-operation which is taking place between Kensington and Chelsea, Hammersmith and Fulham and Westminster Council’s, in bringing together various aspects of administration and services, including having one Chief Executive for all three Councils, sharing back office functions and combining services and staff.

In Herefordshire, the unitary council, primary care trust and local NHS have shared a chief executive, a management team and corporate plan since 2008. The three partners expect net savings of more than £33 million over 10 years.

I fully recognise that it is a grinding of teeth issue to invoke good examples - and many of you will say “Well, we’re doing that, too.” Good. I am glad you are, but for those who are not, these provide examples of successful leadership.

The local government estate is worth around £250 billion. A recent independent report estimated that local authorities could deliver up to £7 billion in savings per year, and at the same time improve services, by managing their property assets efficiently, and in co-operation with other public and voluntary sector organisations.

For over a year, my Department has been working closely with 11 Capital and Asset Pathfinders to explore what can be achieved. The initial projects have shown that adopting a cross-public sector approach can lead to substantial savings and improve the local community’s access to the services they need.

The Local Government Association are now leading a second wave of Pathfinders to see what further lessons can be learnt.

45 areas have submitted an expression of interest to take forward neighbourhood-level Community Budgets.

A further two areas will design and run a ‘whole place’ programme to test how all public services can be integrated and managed as a single local budget. 15 areas have applied to take this forward.

The concept of Community Budgets, is about bringing together and pooling the resources of various public bodies to provide the best services for individuals who need them, whether by the public, private or voluntary sectors.

As the Secretary of State said at the recent launch of the Community Budgets Prospectus, “We can no longer afford the luxury of fruitless, uncoordinated investment.”

Community Budgets are not about any one local public service having a monopoly on action or resources. Nor are they about central Government mandating what localities should do.

They are to give people more power over the local services and resources that are delivered in their neighbourhood and that matter most to them.

Each pilot will seek to establish devolved budget and policy making structures to secure better coordinated, more efficient, services for residents. This can help government to make significant public sector savings, cut red tape and improve policy making.

I have been working with a small number of Council Leaders to look at the barriers standing in the way of achieving this. We discovered that nearly all barriers were at the local level, and were cultural rather than legal. Many details of what we found are already online, including a definitive and practical guide about data sharing that shows how you really can ‘dare to share’.

The challenge is there for the areas to bring the pilots to life and tell us how local services can be better run.

A significant recent development has been the Prime Minister’s commitment to turn around the lives of the most troubled families, by the end of this Parliament. This will truly mean all agencies working together, sharing information, identifying families with the most difficult and intractable problems.

The Secretary of State for Communities and Local Government has been asked to provide the support for this initiative. The Troubled families team is headed up by Louise Casey.

Around 100 councils have already signed up to become involved in the initial stages of these projects.

I know there are many examples of local authorities who have embraced the challenge of delivering ‘Better for Less’.

In closing, I want to make it clear that I do not underestimate the economic challenges facing local authorities and the wider public sector. Nor, the effort that they are already having to make to continue with their ambitions.

However, many local authorities and other public bodies have already demonstrated that not only can significant efficiency savings be achieved but frontline services can be protected, by rigorous thinking. about the future way of serving their communities.

But I believe that more can be done, particularly now the opportunities for innovative practices have opened up, by the devolvement of power, resources and authority to Local Government.

Events like today provide an excellent opportunity to come together and learn from one another’s experiences. I am sure you will leave the conference today inspired with new ideas and solutions for dealing with all these challenges.

I believe that it is essential for the future of truly localist local government that you are seen to lead the way. I am certain you can do so.

Thank you.

Published 24 November 2011