Council leaders fear pending cuts

Four out of five council chief executives and leaders fear the cuts will lead to financial failures in the sector, the latest research from consultancy firm PWC has revealed.

Despite a good track record on meeting the savings targets so far, the sector thinks there will be one or more councils facing ‘a significant financial crisis’ by 2015.

In addition, 70% of chief executives and more than 80% of leaders believed one or more councils will fail to deliver essential services in the same period.

According to the local authorities, 90% of them have achieved their cost cutting targets so far, with a third exceeding them. But councils fear they will face further cuts beyond the current spending review, and austerity measures are hear to stay.

Four out of five chief executives believe the current model of service deliver will change within the next three years, with more partnerships and commissioning rather than direct service provision.

Local government partner at PWC, Andy Ford, said: ‘There is an increasing realisation within the sector that austerity will continue for some years to come. Councils have been remarkably successful so far in finding savings in a way that has largely protected frontline services and many are confident that they can repeat that in the immediate future.

‘But the pressures are so great that a sustainable future requires councils to begin to address now more complex challenges such as demand management and take a whole system approach to reform.’

The survey also found public are becoming less tolerant of the cuts. 42% of the public opposed the cuts, compared with 36% in 2011. While more than half of chief executives and three quarters of leaders claimed the public were well informed about the cuts, only a quarter of the public agreed.

’One of the real challenges for councils is that, just as they are beginning to get to grips with the more complex issues such as demand management, so the public attitude towards austerity and cuts is noticeably hardening,’ said Mr Ford. ‘Councils are going to need to do much more in terms of explaining the changes to individuals and communities, and communicating more imaginatively and effectively, if they are going to secure support for the very difficult choices they will be making in the coming years.’