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Increasing Deficiency


By Paul Smith

In putting forward his budget, you know the one which said exactly the opposite of the previous one, Jeremy Hunt called upon the public sector to make efficiency savings. Projections suggest that his tax reversals mean that there is still a £30-40bn black hole in the public finances As an aside, as someone who studied astrophysics (admittedly in the last century, theories have changed since then), if you put more into a black hole it gets bigger whereas in finance if you put more in it gets smaller.

The answer to this, apparently, is not austerity but efficiency savings. Having sat in many council budget meetings over the last 35 years, I have never seen so-called efficiencies deliver anywhere near as much as people think and many are counter-productive. 

So, what could they mean? The one which has often saved the most is closing offices. I remember the days when it was all the rage to open local housing and council offices, later evolving into ‘one-stop-shops’ or service ‘hubs’ on council estates and in the new suburbs and towns being developed across the country. As we become more ‘agile’ these local offices have been closed because they are inefficient. Staff can work from home, from Costa or anywhere with wi-fi. Offices in the most deprived areas were closed and their functions were consolidated in town centres. Yes, more efficient, and yes cheaper but services and officers have become more remote from those communities. Is it any surprise that we have seen growing media coverage of housing in poor condition on those estates over the last couple of years? You will also notice that the central offices which have remained open are in town and city centres and not on estates. It’s the offices in the poorer areas which are not cost-effective rather than those in the centre of town. I wonder how different our services would look if we had kept the local offices and closed and sold the HQs.

Other efficiency savings usually are just plain annoying. I’ve been in the debate about how much can be saved by not providing employees with free tea and coffee. There have been reports recently, of head teachers unscrewing lightbulbs in school to reduce costs, which, if they are LED will save practically nothing. Maybe people are increasing the recycling of paperclips, building up their own little paperclip mountains on their desks or will be asked to bring in their own soap and toilet paper. Another saving will be the merging of organisations together, replacing two CEOs with one, two FDs with one, etc. Indeed, why not go the whole way and just have one council for the whole country. Englandshire District Council can run all local services from a single office somewhere central like say Ashby-de-la-Zouch. It could save even more by moving over to one local government IT system because we know that computers have made services far more efficient, and people don’t spend half a day every three months trying to reset their passwords.

Of course, increasing efficiency must mean no innovation or change as innovation is expensive, especially if you are genuinely trying something new or different, there is a chance that it will fail.

In looking at the budget of my association when you take out repairs costs, salaries, interest charges, IT licences, energy costs and other necessary expenditure only 3% of the budget is left.

In reality efficiency savings rarely work and can even be dangerous. One new phrase I’ve heard in recent years is ‘value engineering’ which basically seems to involve getting rid of anything which isn’t entirely necessary. However, in many construction projects, it means getting rid of things that no one will notice, like for example fire breaks in buildings.

In the end, efficiency savings will be overwhelmed by service cuts. I have huge sympathy for my friends (and enemies) still working in local government. Recent history shows us that they are the frontline of austerity as the central Government can not only pass the buck but also blame the councils for the decisions they make.

Increasing Deficiency