May 2024


Government call for a radical shift in Council Strategy

By Claire Agutter

Government Chancellor Jeremy Hunt has called for an urgent rethink of council strategy.

Seen by some of the public sector as a provoking statement, Hunt delivered a bleak explanation of local government and how they manage their resources and funds. Hunt proposes that significant spending cuts should be made on consultants and diversity schemes, asking councils to look at other ways of optimising their resources. 

Today, councils have to deliver more for less and face the challenges of navigating post-pandemic deficits but with higher demands for service quality. Hunt’s recent comments have started much-needed discussions about what tomorrow holds for council operations.

As I reflect on my time within service integration and management, I have seen that there are other solutions. Long-term, creating flexible outsourcing models, coupled with Service Integration and Management (SIAM) principles, could offer the solution that councils have been looking for financially and operationally.

In local government, there will always be a clash between existing methods And innovation. Sometimes, this is due to the landscape of fiscal caution and efficiency demands. Hunt’s recent advocacy for radical shifts in council strategies exemplifies this tension. Some view his propositions as a necessary response to financial restrictions; others will see that if they choose to explore, there are other, more innovative approaches for operational excellence.

Jeremy Hunt’s assertive approach and call for fiscal prudence are mistakenly placed. Hunt pushes for a significant reduction in consultant and diversity scheme spending. Hunt’s view is that these measures are indispensable for protecting essential services within local government and ensuring the longevity and sustainability of local government. Hunt’s ideas reinforce the need to investigate fiscal concerns head-on but may not be the most strategic perspective.

Reactive management shifts from one extreme to another In times of crisis, such as the move to complete outsourcing and then a move back to in-house later as full insourcing resumes. But, a more logical and nuanced approach would be to develop a sourcing strategy. This could have built flexibility, with room to scale included. This model allows local government to respond and adapt to the landscape without causing significant disruption.

Suppose we can find a smarter solution that incorporates service integration and management, a move which delivers long-term, flexible outsourcing models, supplemented by adopting Service Integration and Management (SIAM) principles and embedding the role of a service integrator. SIAM principles could balance the needed financial outcomes with the required goals for service delivery and quality efficiency.

This conversation is helpful, highlighting the sometimes challenging decisions facing nationwide councils. While fiscal austerity remains a pressing reality, the SIAM approach could deliver potential strategic investment and innovation dividends. Council leaders find themselves at a crossroads, weighing up short-term cost-cutting measures against the promise of transformative operational strategies. Ultimately, the dialogue sparked by this debate offers councils an opportunity to chart a course that balances fiscal responsibility with innovation, delivering the resilience and sustainability local government needs.

A marketplace of service providers willing to embrace new ways of working at every step of the journey awaits Council leaders willing to look at alternative solutions. This new way of working can create a culture of collaboration with their service providers through agile sourcing and procurement exercises to collaborative operations spanning multiple suppliers. It will foster short-term improvements and the long-term innovation needed for councils to stay ahead.

In this constrained resource landscape, Hunt is correct in that systemic reforms are imperative. But, to realise the benefits of increased efficiency, councils must embrace modernisation, simplification, and digitisation of operational processes. Robust risk management practices are equally essential, ensuring continuity in service delivery despite financial uncertainties. Moreover, councils must reassess their sourcing strategies and vendor management approaches, fostering seamless service integration and effective ongoing vendor management.

To achieve the desired positive outcomes, councils need to adopt robust strategic planning systems, implement effective risk management, and prioritise service integration so councils can navigate financial challenges while delivering essential services for their local communities.

We know that financial challenges stifle innovation, but they can also push forward positive change at the other end of the spectrum. Councils should seize the opportunity to enhance citizen experiences, leveraging data and digitisation to increase transparency and efficiency. A flexible supply network that fits changing circumstances can further support councils’ quest for long-term resilience and sustainability.

By Claire Agutter

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