Municipia views

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Beyond benchmarking  – Service Improvement in an age of austerity
Given all the chatter, leaks and covert briefings coming out of Government since the remarkable General Election result on 8 June, one could be forgiven for thinking that it is just a matter of time before the age of austerity we have been living through since at least 2010, draws to a close.

But this does not reflect the reality facing most councils across the U.K. After years of central government imposed austerity which has seen council budgets decline by 40%, Lord Gary Porter the Chair of the Local Government Association (LGA) speaking at the recent LGA Conference in Birmingham (4 – 7 July), pointed to the continuing squeeze on council resources which will mean that by 2020, local government in England will have lost 75 pence out of every £1 of core central government funding that it had to spend in 2015. Almost half of all councils will no longer receive any of this core central government funding by 2019/20 and councils in England face an overall £5.8 billion funding gap by 2020.

The respected Institute for Fiscal Studies (IFS) have shown that public spending as a share of national income is set to fall by around £17 billion by 2020/21 after investment spending is taken into account and that an “end to austerity” – as defined by no further net tax rises, benefit cuts or cuts to spending on public services implies a giveaway of £33 billion per year which would blow a hole in the Government’s stated aim in the Autumn Statement to balance the books and eliminate the deficit by the early 2020’s. Add Brexit uncertainty to this toxic mix and even the casual observer can see that there is a real fiscal conundrum for whoever is the incumbent in Downing Street

The headache for the Government, as illustrated recently by the confusing signals on the future of the public sector pay cap, merely compounds the problems for hard pressed local authorities, regardless of whether councils are permitted to keep all of the £26 billion in business rates collected locally each year and raise council tax without the threat of local referendums.

Budget pressures are growing and spell further cuts, rationing or the discontinuation of many vital local public services. What can be done to stem the bleeding and restore some confidence and certainty for the future, ensuring that councils can avoid another of the ceaseless rounds of ‘slash and burn’ cuts to local services?

Traditionally councils have used a process of ‘continuous improvement’ as a way of driving out inefficiencies, prioritising spend and improving the quality of services. One of the key tools of the continuous improvement loop has been ‘benchmarking’ defined as understanding in both quantitative and qualitative terms, where a council stood against its peers and then utilising service improvement techniques to drive service performance towards the top quartile of performers.

The problem is that benchmarking as a tool of public policy is now a thing of historical curiosity. And unless services are so poorly performing that there is vast scope for service improvement, understanding basic metrics of performance such as unit cost and productivity, is unlikely to assist in the step change necessary to achieve the scale of spending reductions required or to sustain traditional levels of service delivery.

Without throwing the baby out with the bathwater and building on the vast wealth of knowledge and understanding that already exists across the sector, Municipia has developed some unique diagnostic tools which can be used to build a comprehensive baseline assessment of service performance and identify the key areas for improvement.
Improvement targets can then be set based on for instance a realistic appraisal of the potential to generate new and sustainable forms of revenue; improve outputs and outcomes for a given level of resource; determine whether service standards and policies can be modified without detriment to core services or levels of customer satisfaction; where innovative technological solutions can be deployed; and consider opportunities to streamline service delivery through partnerships, optimising utilisation or new means of service delivery.

The approach is holistic and links strategy and aspiration to operational delivery and builds on a range of expertise which includes policy forecasting, peer review, strategic leadership, process improvement, business and financial planning, operational management and commercial understanding and delivery.

It represents an inexpensive approach to capacity building in the sector which can deliver radical and sustainable change in order to preserve and improve local services.
This is the first in a series of blogs that will develop aspects of the service improvement method being pioneered by Municipia.

If you would like to find out more contact Mark Bramah: mark@municipia.co.uk or Alistair Merrick: alistairmerrick@municipia.co.uk or telephone 07858 465003