Councils have long struggled with budget constraints and financial pressure.

While increased demand for key services is requiring local authorities to deliver more with less, it has also driven innovation, encouraging councils to devise new ways to create savings and boost efficiency.

Here are 10 examples of how councils are making the most of limited budgets:

1. Digital transformation

By investing in technology and improving online platforms for services such as issue reporting and council tax payments, local authorities can benefit from the long-term savings generated. Maximising the use of digital services reduces administrative costs and paperwork, as well as increasing efficiency and ensuring budgets are used prudently.

Hertfordshire County Council’s 2023-27 digital and technology strategy seeks to ensure the accessibility and efficiency of online services, as well as boosting broadband, upgrading databases and improving decision-making.

2. Energy efficiency initiatives

The installation of features such as solar panels, insulation and LED streetlights can cut the cost of utility bills and deliver energy savings for councils. These budget-conscious initiatives help contribute to meeting climate targets and sustainability goals.

Leicestershire County Council’s streetlight dimming trial saved the local authority nearly £540,000, freeing up budget space and conserving energy, while Havering Council has introduced a solar panel scheme that could see £76,000 saved annually.

3. Smarter procurement

Joint procurement and bulk buying are effective ways to enhance value for money and achieve cost-effective supplier deals. Councils can also consider encouraging procurement teams to source local suppliers to increase savings across the community.

In partnership with Scotland Excel, eleven councils in Scotland participated in a joint procurement scheme to renew their Microsoft 365 licences, resulting in collective savings of £370,000.

4. Asset management

The regeneration of neglected council land and buildings to create community spaces or offices can prove a valuable use of local authority budgets. Projects to repurpose assets can offer further financial opportunities, such as producing income through rent, while ensuring budgets are not depleted by maintenance costs of unused properties.

Lambeth Council has refurbished the historic Brockwell Hall to create a new community hub and exhibition space, featuring improvements to the surrounding landscape through environmental initiatives to boost biodiversity.

5. Community partnerships

Delivering services in partnership with local charities, businesses and volunteer groups provides opportunities for councils to share resources and balance costs. Collaborative work ensures a greater level of expertise is available, with funding pressures divided among contributors to combat the pressure of strained budgets.

Buckinghamshire County Council enlists the help of volunteers to run several community and youth spaces such as libraries and day centres, with services being delivered in collaboration with the local authority.

6. Preventative services

Through investment in early interventions and preventative strategies such as social care, public health and youth services, councils can help minimise the risk of higher spending on emergency solutions at crisis point. Offering support services in advance can improve budget longevity, as well as providing a lifeline for those in need.

Barnet Council developed a Financial Benefit Calculator to help those eligible for benefits who had not yet made claims. The tool improved access to support and saw council tax arrears drop by £2.1m.

7. Smarter staffing approaches

Through adaptable setups such as flexible and digital working, local authorities limit the need for employees outsourced from agencies. Boosting recruitment strategies and retaining an experienced team of staff increases workforce resilience and supports budget stability by limiting recruitment costs in the long-term.

Essex County Council launched a recruitment strategy to improve in-house resourcing, cut costs and attract skilled employees. The local authority saved the equivalent of £4.4m per year in staffing costs.

8. Revenue generation

Establishing trading arms and commercial ventures such as property development companies is an effective way of boosting council budgets. Local authorities can help close funding shortfalls through revenue streams from leisure centres, business alliances and premium services.

East Suffolk Council has set up a Local Authority Trading Company (LATCo) called East Suffolk Services Ltd (ESSL), tasked with delivering services such as grounds maintenance, waste and recycling collection and street cleansing.

9. Citizen engagement

Enlisting the help of residents in decision-making simultaneously increases public engagement and cuts costs internally. Initiatives such as neighbourhood groups, volunteering organisations and online issue-reporting services are among the ways in which councils can encourage members of the community to have greater agency over how services are delivered, while alleviating financial pressure experienced by local authorities.

Lancaster City Council’s digital platform, the Love Clean Streets app, has improved accountability among residents and prompted a 41% rise in public issue reporting since its launch in July.

10. Data-driven decision making

The use of data analytics can support councils in managing their finances and monitoring outgoings. Data-driven tools can help local authorities understand service demand, areas of high need or waste, as well as allowing for targeted service delivery through the evaluation of resident feedback.

Somerset Council is investing £1.5m into data and AI, enabling the local authority to boost its preventative services and promote early interventions to avoid high-cost crisis spending.

This article was written with the help of ChatGPT.

If you found this article useful, then check out: 10 ways councils are using AI to transform public services and 10 ways councils can boost staff retention.