Headlines: December 7th, 2011

Local government will shrink by a quarter by 2015. Advice on how to manage shrinkage has come from the Audit Commission working with the Local Government Association.

Planned budget cuts mean that councils need to reduce their workforce costs substantially while still providing much needed services. This joint report ‘Work in progress: meeting local needs with lower workforce costs’ is aimed at councils as employers, it shows how local authorities across England are reducing their workforce costs, with some finding creative solutions.

Councils are finding ways to cut the pay bill without losing jobs, but redundancies are inevitable the report says. Local government was already reducing posts before the cuts in government funding. In the past year an estimated 145,000 jobs have gone, and this figure will increase in the future. So far many redundancies have been voluntary, but the report warns that compulsory ones are set to rise.

Audit Commission Chairman Michael O’Higgins says: ‘Each council must find its own way of cutting costs tailored to local needs, local circumstances and its own workforce. Councils are often the largest employer in their area, so downsizing can affect the local economy. Local government is a people business, with staff costs accounting for almost half the money spent by councils, so they need to be aware of all their options and the tools at their disposal. This report gives case studies and comparisons, while remaining focused on service quality. That is why it is so valuable.’

‘Work in Progress’ recommends quick action to decide on the most effective and equitable solutions. But it also advises that there is a balance to be struck between redundancy programmes and the benefits that can flow from retraining, redeploying, or sharing staff with other organisations.