Working with our hands tied

Alex Colyer is finance director at South Cambridgeshire District Council

With Christmas on the horizon, we have the next settlement to look forward to and news of how much Revenue Support Grant (RSG) we’ll be losing in 2015/16: it looks likely it will be around a third. We know we’re losing a quarter of the RSG in 2014/15 and with the Institute of Fiscal Studies warning that any new
government is unlikely to do anything different, it’s time to get the medium-term financial plan out again and think about how to manage the funding gap. At South Cambridgeshire District Council, we’re considering what finances will look like without any RSG at all. After all, the only realistic assumption you
can make at this stage is that by 2019/20, districts will be operating without it.

With us, that starts with a revamped efficiency programme, reducing costs wherever possible. We don’t have a lot of discretionary services, so there are limited opportunities for driving down costs. But one area where we’ve identified opportunities for pooling resources with our neighbours is waste management. There is scope for joint working with the county, other local districts and our waste disposal partners from the private sector to eke out some big savings. That’s indicative of a range of things we’re looking at to try and plug the hole left by the RSG. But saving on waste doesn’t put us in the clear. We’re a pretty high growth area and our additional council tax yield won’t cover our additional cost base. By the time we get to 2019/20, we see another deficit developing from changes in our demography and the related costs.

So we’re also looking at commercial ventures to create investment returns as part of the medium-term strategy. We’ve set up a company and are looking at private sector housing schemes which will involve buying properties and/or managing third party properties to generate income.
We’re also looking into launching a property company, county-wide, that would own all of the public sector assets in Cambridgeshire. Each of the organisations that puts its property assets into the company would own shares or units in the new body and share in the profits. That would make for much smoother governance, quicker decision-making and the company would be significantly more nimble
in the marketplace when it wants to develop, sell off assets or work with the private sector.

This all begins to focus the mind on where we’re ultimately heading and what will become of district councils. I see, hear and am part of discussions three or four times every week now about how we and our neighbours can work closer together, at one level or another. It’s inevitable that districts in particular will radically change shape over the coming years as the funding crunch gets closer. The question remains, will councils do it in a piecemeal, service-by-service approach, or will we move towards larger strategic arrangements, impacting sovereignty?

Ceding control has never been easy in local government and anything shared or merged requires a marriage of the willing, but the enormous financial pressure we’re witnessing at the moment has forced people to come to the table in a way we have never seen before. From where I’m sitting, local government’s response to austerity has been nothing short of excellent but I think it’s government’s turn now to provide stability in policy making so that we can genuinely plan for the medium- and long-term with our neighbours and partners. Hopefully, in the coming settlement and Autumn Statement we won’t see the sort of tinkering from government that has made life unnecessarily hard for us in recent years.

This article was first published in Room151 Quarterly magazine. Didn’t receive a copy? Local authority heads of finance, resources, procurement and chief execs can email subscriptions@room151.co.uk for a complimentary subscription.