Eric Pickles says: “There may be 50 ways to leave Thurrock Council….in better financial health

THE secretary of state for communities and local government, Eric Pickles has published a paper with 50 suggestions as to how local councils, such as Thurrock can save money.

How many of these, do you think, could apply to Thurrock?

1. Share back office services

Does the country really need 350 different business rate collection departments? The Tri-borough initiative in London (Hammersmith & Fulham, Kensington & Chelsea, Westminster) report that they are on track to save £40 million by 2015-16 by combining back office services and management costs. The three authorities estimate that if other councils across the country saved half that amount by sharing services with neighbours, it could deliver potential national savings of £2 billion for councils.

2. Community Budgets

Bring staff and money together: DCLG wants to roll out Community Budgets across the country.

Essex Community Budget pilot estimates that across their proposals there is the potential to generate cashable savings of nearly £127 million by 2019-20.

Greater Manchester predict £183 million of savings over five years (following a £12 million investment) by implementing an intensive support and control package for young adults at risk of short-term custodial sentences, based on an evaluated pilot in Manchester and Salford.

3. Use transparency to cut waste:

Publish their spending, contracts, tenders over £500 and property data on online, creating an army of armchair auditors to drive out waste and giving more power to councillors

4 Tackle duplicate payments

Different parts of the same organisation may be buying similar goods and services through different, expensive contracts which online transparency will help expose. DCLG publishes its contracts over £500 and all its spending over £250.10.

Experian’s research has estimated that councils waste up to £147 million a year on duplicate payments, by paying
bills more than once. For example, Leeds City Council recovered £500,000 in overpayments to suppliers; internal auditing by the London borough of Islington that involved checking invoices to their top thirty
suppliers revealed that ten had been paid twice and two more paid three
times; the overpayments totalled £55,000 on that small sample size alone.

5. Clamp down on corporate charge cards

Introduce greater financial controls on corporate charge cards and credit cards.

In DCLG, online transparency and tougher controls have helped cut expenditure on ‘Government Procurement Cards’ (the government-branded charge card, also used by local councils) by over three-quarters, from £321,076 in 2009-10, to just £70,835 in 2011-12.12 DCLG cut the number of card holders from 210 in May 2010 to just 26 in November 2012, cancelled the cash withdrawal facility on the card (apart from business continuity users, in the case of a genuine emergency) and introducing new internal checks and audit trails, from pre-approvals to requiring post-transaction reporting.

6.Special spending controls

Review the processes for approving how spending is signed off. In Hammersmith and Fulham, the threshold for where spending needs to be authorised by the council leader has been reduced from £300,000 to £100,000.

In Whitehall, special spending controls have been introduced across all information and communication technology spend above £1 million, advertising and marketing, consultancy, property leases and lease extensions and Civil Service recruitment: in turn, spending outside these controls is separately challenged and published online.14

7. Tackle fraud:

The National Fraud Authority has estimated that councils could save £2.2 billion a year by cracking down on fraud and improving their prevention, detection and recovery of council fraud.

For example, The London Borough of Ealing has used data matching to check household occupancy in relation to council tax single person discount, and this has resulted in backdated account adjustments of £1.5 million

8. Claw back money from benefit cheats:

The London Borough of Croydon used the Proceeds of Crime Act to recover assets in the UK and Nigeria owned by a couple who has been fraudulently claiming benefits, and the Council should receive around £400,000.17

9. Get more for less by improving procurement

Councils spent £58 billion on procuring goods and services in 2011-12.

Councils can group together to get better prices thanks to their purchasing power. Innovations like e-auctions can use the internet to get the best price and open up contracts to smaller firms. Procurement experts estimate that councils could save up to 20% on their costs through best practice on their spending.

For example, adopting a collaborative approach to all energy procurement, in partnership with local energy providers, has saved Birmingham City Council £4.7 million per year and Gloucestershire County Council £1 million per year.

10. Buy together

Public Buying Organisations facilitate collective buying of goods and services. For example, through a Public Buying Organisations, the Royal Borough of Kingston-Upon-Thames achieved savings of £75,000 in contracting costs and 26% total cost savings on a £32 million project to expand its primary schools.

11. Stop the scope for procurement fraud

Procurement fraud alone in local government costs £890 million.

12. Utilise £16 billion of reserves creatively

Councils are sitting on £4.1 billion of unallocated (non-school) financial reserves.

13. Improve council tax collection rates

Every penny of council tax that is not collected means a higher council tax for the law-abiding citizen who does pay on time. There is a total of £2.4 billion of uncollected council tax across England. The council with the biggest single amount of uncollected tax is Liverpool with £114 million of arrears – equivalent to over £500 for every dwelling in Liverpool.

The best authorities collect 99.5% council tax owed, but the worst collect less than 89.6%. For example, in April, Crawley Council announced that they had increased their collection rates for the tenth year running.

14. Encourage direct debit and e-billing for council tax

Handling cash and cheques for council tax is expensive to administer. DCLG has made it easier for councils to offer voluntary e-billing for council tax, by removing legal requirements to send voluminous documents by post with council tax bills. Councils can use their legal powers to offer discounts or incentive schemes for e-billing.

15.Close council cash offices

Instead allow residents to pay bills in local post offices. This is cheaper, more accessible and helps support local post offices. Alternatively, Brent Council is looking at how prepaid bank cards can be used to improve social care direct payments. Brent spends £5 million per annum on direct payments and expects to save 10% from using the prepaid cards to administer this spend.31

16. Better land and property management

Make better use of their property assets, including sharing between public bodies. Local ‘capital and asset pathfinder’ pilots have found that savings of around 20% are possible from a cross-public sector approach.

Public sector assets are worth an estimated £385 billion, with almost two thirds owned by councils. The government estimates this could potentially save £35 billion over 10 years.

17. Hot-desking, estate rationalisation and sub-letting

By moving to hot- desking across the main floors of its headquarters in Eland House, DCLG has freed up space which has been let to other organisations, saving money.

The Planning Inspectorate has vacated one floor of its Bristol office that is now being sublet. The Homes and Communities Agency has reduced its accommodation costs by 49% (£6.5 million) through rationalisation of its estates and facilities requirements.

Councils should undertake a comprehensive review of accommodation costs and identify savings through rationalisation, sub-letting and early lease breaks. Southwark Borough Council introduced Hot-desking as part of an attempt to develop modern and cheaper office accommodation. The programme overall has freed up 27 properties and managed to save about £55m.36

18. Open a ‘pop up’ shop in spare office space

DCLG has opened up a pop up shop in its reception in Eland House: this can help share costs and support local small firms.37

19. Close subsidised council canteens

For example, a council review by Stoke on Trent City Council discovered their subsidised canteen was operating at a £71,000 yearly loss.

20. Cancel away days in posh hotels and glitzy award ceremonies

Use a council-owned property to hold any away day. Or borrow a room from a neighbouring council at no cost, and offer a free room to them for their away day.

Similarly, stop paying to attend glitzy ‘award ceremonies’ which are just an excuse to make money from local government; councils spend an estimated £1.2 million a year on such ceremonies.

21. Open a coffee shop in the library

Lease some space in your local library to a coffee shop. This will generate revenue and encourage more readers into the library: coffee shops are increasingly the norm in commercial bookstores, but not in municipal libraries.

22. Cut senior pay

The local government Transparency Code opens up middle management and senior pay to greater public scrutiny, and the Localism Act allows councillors via Full Council to set local ‘pay policy statements’ to get senior pay and perks (as well as pay offs) under control.

Councils can lead from the top by having their chief executives take a pay cut. Ministers have taken a 5% pay cut and frozen their pay for five years. Chief executives can do the same.

23. Share senior staff

Combine chief executives with other councils or other public authorities. For example, Breckland and South Holland District Council share their management team, including chief executive, aiming to reduce senior management overheads by 35%. The estimated on- going saving is £1.1 million per year.

Cambridgeshire and Northamptonshire county councils achieved savings of £3.8 million from a budget of £83 million in a single year by merging management positions.

24. Scrapping the chief executive post entirely

DCLG is making it easier to abolish such posts without councils having to fork out expensive ‘golden goodbye’ payoffs.

For example, Leicester City Council believes it will save £175,000 per year from scrapping the post.

Alternatively, Breckland Council, Luton Borough Council and South Holland District Council are currently considering plans to share a council chief executive from January 2013.

This initiative aims to demonstrate that a Chief Executive can serve three authorities, even when they are under different political control.

25. Introduce a recruitment freeze

For example, Devon County council’s vacancy management strategy introduced a recruitment freeze, except for hard-to-fill vacancies. Of the 1,200 staff leaving the organisation in 2010- 11, the Council replaced only 480 with new appointments. The savings from the strategy was estimated at £7 million by the end of 2011-12. 45

26. Freeze councillor allowances and end councillor pensions

Councillors should be volunteers, not the bankrolled staff of the municipal state. In Whitehall, even full-time Ministers have cut Ministerial salaries and frozen them for the remainder of the Parliament.

27.Cut spending on consultants and agency staff:

Councils spending on procured professional services (including consultants) increased by 50% to £4.5 billion from 2004-05 to 2009-10. Spending on agency workers increased by 46% to £900 million over the same period. By contrast, Lambeth Council reduced the number of agency workers it employed from over 900 in 2009 to under 300 in 2011, saving £18 million in the process.46

28. End expensive ’leadership’ courses: Councils could review spending money on sending staff and councillors to expensive “leadership” training courses, such as Common Purpose. Such training courses can often run into tens of thousands of pounds.

29. Cut spending on head hunters and expensive adverts: publish job vacancy information online as open data instead. It can cost £5,000 to £10,000 to place an advert in some national outlets.

This will not end advertising in the media; local newspapers in particular will remain an important source to advertise jobs to those who may be ‘digital excluded’ and not have access to the internet.

But over time, putting job adverts online will drive down advertising costs, make it easier to compare pay ranges within and across councils, and show local people where their council tax goes.

30. Review and reduce absenteeism: For example, Staffordshire Council reduced the cost of absenteeism by £100,000 a month by providing support for staff with musculoskeletal problems and introducing new absence reporting measures.

31. Scrap trade union posts: Get rid of unnecessary non-jobs such as taxpayer-funded, full-time trade union ‘pilgrim’ posts.

32. Charge for collecting trade union subscriptions: Councils can exercise existing legal rights to charge trade unions for the collection of trade union subscription fees via the municipal payroll (so-called ‘check off’ arrangements).54

33. Stop spending money on commercial lobbyists: Some councils are continuing to hire lobbyists and expensive public affairs consultants despite the guidance in the Code of Recommended Practice on Local Authority Publicity.

34. Stop translating documents into foreign languages: Only publish documents in English.Translation undermines community cohesion by encourage segregation. Similarly, do not give community grants to organisations which promote segregation or division in society.

35. Reduce the number of publications and media monitoring

Previously, DCLG spent £136,892 in 2008-09 and £113,308 in 2009-10 on newspapers and magazines; this has been cut to £62,074 in 2011-12, including by consolidating seven different sets of newspapers for Ministers each day to just one.57 DCLG has cut media monitoring spending from £300,000 in 2009-10 to £78,000 in 2011-12.58

36. Earn more from private advertising: Include private advertising on council notice boards and examine the scope for private advertising in the council tax bill yearly mailing and on council property. For example, Nottingham City Council’s website, attracting about 200,000 impressions a month, has been able to generate up to £1,500 per month since introducing Google AdSense.

37. Cease funding ‘sock puppets’ and ‘fake charities’: Many pressure groups – which do not deliver services or help the vulnerable – are now funded by state bodies. In turn, these nominally ‘independent’ groups lobby and call for more state regulation and more state funding.

A 2009 survey found that £37 million a year was spent on taxpayer-funded lobbying and political campaigning across the public sector.

Many of these causes may be worthy, but why should they be funded by taxpayers? Councils should also review their memberships to regional quangos and membership bodies: such residual regional structures are redundant following the abolishing of Regional Development Agencies, Government Offices for the Regions and unelected Regional Assemblies.

38. Scrap the town hall Pravda: Local authority newspapers undermine an independent local press. For example, the Mayor of London cancelled The Londoner newspaper, helping save £2.9 million a year.

Essex County Council cancelled their newspaper in favour of an online publication; the council spent £526,000 on producing Essex Works in 2009-10 but this fell to £55,000 in 2011-12 after the publication stopped being printed.

Councillors can still issue their own local ward newsletters using political party funds to help keep in touch with local residents.

39. Stop providing free food and drink for meetings: DCLG has cut spending on refreshments for meetings from £456,142 in 2009-10 to £32,053 in 2011-12. Guidance to staff now states that refreshments may only be ordered for meetings with external attendees of longer than four hours. Staff should avoid arranging meetings over lunchtime where possible and attendees should normally be asked to bring their own refreshments where practical. Expensive meals on Government Procurement Cards have also been stopped.

40. Reduce first class travel: Previously DCLG spent £200,000 a year on first class rail travel in 2009-10; under the new Administration, such spending has been cut to just £17,500 a year in 2011-12.67

41. Cut mileage payments: Councils paid out £427 million in mileage allowances in 2009-10.68 The HMRC Approved Mileage Allowance Payment is currently 45 pence per mile. Some council employees are on terms and conditions where they can able to claim up to 25p per mile more than the prevailing HMRC rate. Councils could cut the mileage rates back to HMRC levels, which North East Lincolnshire has done.

42. Video conference instead of travel: South Tyneside Council is embracing the latest video conferencing technology to reduce travel costs.

The equipment will also generate income for the council who plan to make the service available to businesses and community groups at competitive rates.70

43. Help the voluntary sector save you money: The Localism Act gives local community, mutual and voluntary sector groups a Community Right to Challenge to run local services.

As outlined in DCLG’s Best Value guidance, councils should not only involve voluntary and community groups in budget setting but give organisations, local service users and the wider community the opportunity to offer options for reshaping and reducing the costs of the services provided. The best councils are showing that they can both embrace the Big Society and balance the books at the same time.71

44. Cut printing costs: Stop producing glossy brochures. Publish online only, unless local residents ask for a hard copy. Review the leasing costs of photocopiers. For example, Scarborough Borough Council saved £185,000 a year by replacing its printing devices with a far smaller number of cost-effective multifunctional printers.72

45. End lifestyle and equality questionnaires: Some councils spend time and money on asking suppliers and residents to fill out intrusive questionnaires about their sexuality, religion and other personal details – be it to take out a library book or make a planning application. Statutory guidance from DCLG has stated that this is simply not necessary.

Similarly, councils do not need to routinely spend time and money on Equality Impact Assessments on everything they do.

46. Sell services: The new general power of competence for councils in the Localism Act 2011 makes it easier for councils to undertake imaginative and joint ventures.

Birmingham City Council has established Acivico, a company to trade in back office services with other public bodies, and made £300,000 income through trading in legal services.

Kent County Council’s commercial vehicle supplies a range of best value goods and services to other publicly funded organisations; these include local government, education establishments, the care sector and emergency services, with a turnover currently in excess of £600 million per year with over 800 employees.

Across the country there are hundreds of council- run MOT test centres which are used to check council vehicles like taxis and buses for their safety and roadworthiness; these centres can also open their doors to the public to provide MOTs to the wider public: this is a far better way of making money from motorists than the lazy way of hiking parking charges.

47. Hire out the town hall: For example, Sutton Coldfield Town Hall in Birmingham City Council can be booked for weddings and civil partnerships, conferences, meetings and theatre productions.

48. Lease works of art not on display: Many councils own art galleries and museums and have extensive collections which never see the light of day, but merely gather dust in storage.

49. Save money on computer software: Use open source software. Conduct a full review of software licences across the whole local authority – can they be consolidated or are open source/free alternatives available.

50. And finally… ask your staff for more sensible savings ideas: Your staff will be the most informed and actually the most enthusiastic about cutting waste. Give a prize for best staff ideas for efficiencies.

Allow staff to submit anonymous ideas too. For example, at Surrey County Council, over 300 employee suggestions have saved approximately £500,000, including: reducing travel and meeting costs, for example using more teleconferencing; reducing print and postage costs, and reducing office equipment and stationery costs.

8 Responses to "Eric Pickles says: “There may be 50 ways to leave Thurrock Council….in better financial health"

  1. VINCE63   December 26, 2012 at 12:41 pm

    In the end the voluntary sector might as well run Local Authorities. You cannot invest and plan for the future with such tight current cash flows.
    Why not do away with Local Councils now and just have County / City and Metropolitan Area Councils. All Councillors paid and expected to work full time only for their particular Council. With the cuts over the last four years and those to come plus the cuts in Council Tax over the last 15 years Local Authorities will only provide basic services in future so why not utilise County services Economies of Scale and scrap Local Authorities now instead of allowing them a slow financial death. Govt. cuts recently & Thames Gateway delegated control and the desire to cut Council Tax have blurred Unitary Thurrock’s strategy/implementation vision thus destroying its ability to long Term Plan.

  2. Shaw Evans   December 26, 2012 at 4:12 pm

    Vince63 intelligent comments, and i think some of your ideas are interesting. The localism act gives more power to local authorities to consider some of these options. The problem with ideas like scrapping the role of the Cheif Executive is that it does not take into account the value of leadership in local government. Also issues like Trade union posts provide an important link in terms of sorting out employment disputes which can cost a lot more when not sorted out by negotiation.

    I think we already have a coffee shop in Tilbury so the council has already started to explore many of these ideas. Also the idea of shared services is already being looked into, so i dont think much of these ideas are new to any local authorities who are exploring many of these ideas and more.

  3. Bernard87   December 27, 2012 at 9:29 am

    Its not the 70s or 80s anymore….councils should have no union posts. Unions should be a private personal affair not something that is part subsidised through our council tax.

    I also cannot understand why public sector senior management are paid so much in the first place. Surely the idea of public service is you want to serve the public, make a particular area/service better? If someone wants a 200k role then they should be in the private sector where wages are not paid with governement money.

    Vince’s ideas are very interesting and he is right that councils will simply find themselves with no money if they are not careful.

  4. VINCE63   December 27, 2012 at 11:42 am

    Trade Unions do have a very important role to play in the changing Local Authority world. At the same time senior pay needs review as the pay difference between the baulk of staff and senior staff is out of balance. The baulk of the 370000 staff cuts since April 2010 has fallen on low paid staff and the majority are women. But the staff bill nationally still continues to rise! (Autumn Statement 2012). Politically bashing Council Staff achieves nothing. Politicians were to blame for staffing inflation and quangos & proliferation of consultants. The Private Sector has proved poor at running Councils nationally (Just look at Vertex and Morrison’s in Thurrock!). Encourage Local Authority Staff pay them well and provide Senior Staff that enthuse Local Govt and support / encourage staff. Residents also need to put more pressure on politicians and realise that if they want excellent Council Services that they will have to pay for them. Time to stop over spending on luxury and start spending on the practical things in life! Thurrock was nearly Bankrupt in 2008 and though John Kent’s finance team is holding up well further cuts could be a disaster and mean even the most basic of services will need to be cut.

  5. Bernard87   December 27, 2012 at 1:29 pm

    “further cuts could be a disaster and mean even the most basic of services will need to be cut”

    Well this is what happens when the governments never ending pot of money starts to run dry. I think most people know that councils could be run a great deal more efficiently and for too long spending has continued to increase which has not necessarily led to better services. We have to start scaling back all public sector bodies to more manageable levels of staff and the burden should be shared between those at the top and those at the bottom.

    “Politicians were to blame for staffing inflation and quangos & proliferation of consultants”

    I don’t want to Labour bash, as it’s boring, but the above was down to them.

  6. Ed   December 30, 2012 at 10:14 am

    51. Don’t follow Eric Pickles example of his Communities and Local Government office spending £42,225 of taxpayers’ cash on snacks in just seven months.

    Eric buy your own pasties – think of the poor taxpayer.

  7. VINCE63   December 30, 2012 at 10:20 pm

    Telegraph update on MP Expenses –
    http://www.telegraph.co.uk/news/newstopics/mps-expenses/

  8. Pingback: Common Purpose – Pickles Opinion | Rotherham Politics

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