Local authorities across the UK are increasingly divided into the ‘haves and the have nots’, according to a new report.
The study by Zurich Municipal, titled Worlds Apart: The 2016 Senior Managers’ Risk Report, claims that chief executives now see bold decision-making as a ‘default position’ while councils are also concerned about community cohesion against the background of cuts and austerity.
Key findings included some local authorities being totally dependent on council tax and business rates by 2020, partnership working on social and healthcare due to budget constraints, climate change has taken ‘a back seat’ due to other distractions and devolution is seen as a ‘distraction’ by some chief executives.
It is based on 60 interviews with council chief executives over a four year period during the £10bn in savings required for local authorities – with another £10bn likely to follow. It includes one stating ‘society as we know it may start to break down’ due to the serious funding shortfalls at some local authorities.
Alarmingly, at least one council said it would not be able to fund mandatory obligations in the next 18 months, and one chief executive said ‘people haven’t seen the impact of the cuts yet’, while another said the council was ‘not financially sustainable’.
But at the same time other councils report being in rude health as they drive forward new commercial deals with another chief executive stating it will ‘grow our way out of austerity’.
Chief executives also said they were keeping a close eye on Brexit and its impact on localities once we formally leave the EU.
Andrew Jepp, managing director of Zurich Municipal, said: 'We are increasingly in a situation where local authorities are worlds apart. Some are reaping massive benefits, investing in growth and seeing that work for them. At the same time, there are some saying that are likely to run out of money in the next year and a half, putting their community sustainability at risk.
'Risk avoidance has become risk taking for many councils, and that many are considering fundamental shifts in their relationship with citizens. In this unremitting financial and political environment, this is unavoidable.'
