Thomas Bridge 10 December 2014

Rural councils under 'most pressure' on construction spending

Rural councils are under the greatest pressure to adopt corporate principles as budget cuts hit construction projects, research reveals.

While urban local authorities on average faced a larger fall in their revenue budgets for construction projects last year (a 15% drop), their rural counterparts faced greater pressure to cut costs and prove value for money - analysis by Scape suggests.

Almost four fifths of councils were found to be responding to falling resources by adopting a more commercially focussed approach to public services, with rural areas most affected.

According to Scape, over two thirds of all councils are finding it significantly harder to maintain the quality of public buildings while delivering the quantity required to meet public demand.

Some 73% of town halls analysed have had to cancel or postpone a building project in the past two years, with the most common cause being suppliers' inability to work within the available budget.

Over three quarters of town halls are also unsure that they will meet 2015 savings targets for built environment projects.

Mark Robinson, group chief executive of Scape said: 'It is clear from these findings just how great a challenge is faced by local authorities to balance shrinking budgets with the rising demand that many public services are experiencing.'

'The emphasis on adopting business-like principles and demonstrating value for money is a sure sign that a new approach is needed to deliver more for less. Smarter methods of procurement need to be adopted on a wider basis to achieve this goal, as well as channel spending and job opportunities back to local communities.'

Commenting on the findings, Simon Parker, director at the New Local Government Network, added: 'We need to see a much greater focus on commercial approaches that deliver financial returns for the public sector along with much higher levels of long-term social value for local people. This shift has already begun. The challenge is to continue rapidly raising the level of ambition throughout the sector.'

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