Local authorities are facing a funding gap of £5 billion by 2020, a Parliamentary committee has found, with spending power falling by over 25 percent since 2011.
Today industry experts warned that the reduction in services as a result could have detrimental effects on IT infrastructure at local levels.
A Public Accounts Committee (PAC) Report published today found that: “After seven years of government funding reductions totalling nearly 50% and rising demand for services, local authorities are under real strain.”
Spending power has decreased by 28 percent even as demand for key services as rose, including “a 14.3% increase in the estimated population aged 65 and over in need of social care, and a 10.9% increase in the number of children looked after.”
Speaking to Computer Business Review, Piers Wilson Head of Product Management at Huntsman Security said: “It wouldn’t be surprising to see them having to focus on front-line services and cutting back on anything else; potentially including critical security measures.”
“The problem is that short-term savings could come with higher long-term costs, especially with the added burdens of GDPR in the event of a breach of personal data. A successful attack could cost a great deal more than upfront investment in preventative or detective controls; or adequately resourcing the security function,” he added.
PAC Chair MP Meg Hillier said that: “Clearly, this is not sustainable. There is only so far the elastic can be stretched before it snaps. Yet, as our report makes clear, central government’s response to this looming crisis smacks of complacency.”
She thinks it “beggars belief” that the department responsible for funding could leave councils get this close to the line and has “neither an agreed measure of sustainability nor a clear definition of ‘unsustainable.”
Giving evidence to the committee Duncan Whitfield, President of the Association of Local Authority Treasurers, commented: “As we have been through the austerity period for the last seven or eight years, we have taken the fat away and there is only lean left.”
“Any local decision we take is more likely to have an impact on direct service delivery on the ground. That could be the protection of children, looking after old people or filling in holes in the roads, for example,” he added.
Mark Hastings Director of Public Sector at Rainmaker Solutions told Computer Business Review that: “Many local authorities are being held back by large outsourcing contracts.”
“These are often single vendor arrangements, lasting many years, which offer poor value for money and which prevent local authorities from using technology to better meet the needs of residents and employees.”
Some local councils, such as Croydon have begun to take control over their IT infrastructure and have started to disaggregate from costly legacy contracts. They have taken a fresh approach to IT procurement, transforming their ICT estates and redesigning how council services can be run at local level, leveraging technology to deliver better services for residents.
“In doing so, they have saved money – up to 40% of ICT run costs as well as making further savings by delivering digital services more efficiently. This can be as much as several millions of pounds and makes a material impact on a local authority’s budget,” Mr Hastings added.