The trouble with big numbers

Lambeth council has to save £115m over four years.  Tackling fraud and “flogging” assets won’t fill the gap alone, says Guy Ware, Lambeth’s s151 officer. 

This year, Lambeth Council is saving £25m to  balance a budget of £315m. Next year it will be  £37m, then £26m, then another £27m. That’s  £115m over four years. On top of the £79m we’ve cut in the last three years.
The only shocking thing about these numbers  is that they’re no longer shocking. We’re not alone. Anyone in local government who’s been paying attention will have seen or managed or been given sleepless nights by numbers just like these. The LGA’s Future Funding Outlook 2014 says the funding gap for local councils is set to rise by £2.1bn a year, to £12.4bn by the end of the decade.
These are big numbers. And the trouble with big numbers is that many people – possibly most –  have trouble grasping what they mean. So they focus on the little ones instead.
On the day the LGA report was published, Eric  Pickles told CIPFA’s conference that the answer  is “simple”: “Don’t spend what you haven’t got.  Don’t waste the taxes you don’t need to have.”  But councils, unlike the government, don’t have the luxury of spending what we haven’t got (it’s against the law) and delegates were struck by the mis-match between the scale of our task and the remedies offered: tackling fraud and flogging “idle” assets.
There’s nothing wrong with either, of course.  Lambeth is good at detecting and preventing  fraud – and at prosecuting those who commit  it. In the last year we’ve saved ourselves and others £3m that way. We’re proud of that. But it’s not a solution – simple or otherwise – to our budget problem.
We’re also pretty good at squeezing value out  of our assets – increasing their productivity, or selling them off. Over the last four years, we’ve realised over £100m, and reinvested the cash in new homes and schools and better roads –  and in transforming our services. We haven’t used it to fill gaps in our revenue budget, which would be short-sighted (and illegal). Like many councils, we’re also reducing our offices, from 14 buildings to two, freeing up space, capital and development potential for affordable housing  and business premises in the heart of Brixton,  while cutting our revenue costs by £4.5m a year. And yet, and yet…We still have another £115m to find.
In response to questions, Pickles told us to put away the begging bowl. Localised business  rates gave us greater financial flexibility, he said.  Well, yes and no. Simply changing the name of a pound from ‘Revenue Support Grant’ to  ‘retained business rate’ doesn’t let us spend it  more than once.
We welcome the chance to keep some of the benefits of growth in our local economy, of course. For Lambeth, we reckon our share might be about £1m. So we’ve added that into our budget. (The one with the £115m hole.) Pickles said he wants to increase the proportion of rates  we keep, an ambition he repeated to the LGA  conference a week later. Which means we might  get to keep another £1m. Better than a poke  in the eye with a blunt stick, but… still another  £114m to go. Which doesn’t feel all that flexible.
So what else are we doing? Well, a lot of stuff everybody else is doing, of course, because, as I  say, we’re not alone. And some important things that many aren’t. Being a co-operative council for us means fundamentally re-shaping the  relationship and the balance of power between the council and our citizens. Because it’s right;  and because we can’t afford the one we’ve got.  Together with our citizens, we’re focusing on what we all want to happen, not the services the  council runs. We’re shifting the money  we do have, and the resources our citizens can bring, to invest in building resilient communities and reducing the demand for traditional public services.
We’re experimenting – using randomised control trials to find out how to change the way  people behave – whether it’s paying Council  Tax, recycling waste or looking after their family and neighbours. We’re in a partnership that’s won £38m from the Big Lottery to research and make fundamental changes in the early years of  children’s lives over the next ten years. Changes we’ll be able to prove deliver huge benefits – and big number savings – in the future.
Some of this is familiar, some of it genuinely new. It’s exciting, and challenging, and hard.  None of it, whatever the secretary of state might think, is simple. But it’s what keeps us going.

Photo (cropped) by Dustin Liebenow