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Spotlight on LGA 2024: Procurement matters for local authorities

17 Jan 2024

Gavin Mason

Gavin Mason

Operations Director

Cash-strapped and financially restricted, that has been the worrying trend of many local councils across the country last year. Seeking to analyse, challenge and create a pathway for the future, the Local Government Finance Conference (LGA) arrives at a timely point in the journey. Here, our director of cost management, Gavin Mason, discusses the key takeaways from the event and how efficient procurement is part of the answer to reduce public sector spending.

Last November, Nottingham City Council became the latest to issue a Section 114 notice in response to a predicted £23 million in-year budget overspend. It was not alone, with 14 councils entering such a circumstance since the inception of the LGA Finance Act 1988.

While each case has its own complexities, there is the familiar problem of financial stretch. The backdrop is that local authorities’ core spending power is on average 79% of 2010 levels. This was something reiterated at the latest LGA Conference, which brought together leaders across the local authority space, to support, promote and improve local government. Some of the factors also discussed included a dramatic rise in adult and child social care costs, with some authorities now reporting 60% of their budget being spent in this area, with one authority reportedly spending at an incredible 80% on this statutory obligation. Other circumstances include spiralling energy bills, and most pertinently for our sector, extra cost for construction projects.

External factors, such as the war in Ukraine and COVID, have disrupted supply chains and led to a spike in inflation, which has exacerbated the situation. In 2022, Rob Whiteman, chief executive of the Chartered Institute of Public Finance and Accountancy, said that local authorities ‘are having to review their capital programmes to see whether or not as much activity is affordable as [was] planned’.

After local authorities meet their statutory obligations, there is increasingly little budget left for the discretionary expenditure that gives us local amenity and value, particularly for the many residents being asked to take more of the burden through increasing council taxes. Inevitably, a re-evaluation of capital projects becomes the norm. It got us thinking here at Pick Everard about the solutions available to maximise council’s budgets.

As a national multi-disciplinary consultancy, one of our strengths is in our ability to bring together a highly effective, specialist supply chain. Our expertise, across a range of public sector areas including education, leisure, healthcare and more, means we offer streamlined delivery and industry best practice. To this end, we are founding partners of Perfect Circle, a 500-strong supply chain of partners led by industry heavyweights, including AECOM and Gleeds. We have all the tools necessary to efficiently deliver projects at a time when public sector spending scrutiny is at its highest.

We have worked with local authorities for decades. Whether its residential planning, transport modelling or leisure consultancy, we offer huge avenues for collaboration and understand the need to plan projects, agree objectives up front and deliver them quickly and efficiently. Through Perfect Circle and SCAPE’s Built Environment Consultancy Services framework, alongside other framework appointments, we are completely compliant with all national procurement legislation, offering un-challengeable, quick and resource efficient appointment.

We allow local authorities to secure an experienced and effective project team, quickly and easily. Why waste precious funding and resource trying to find an external project team, when it can be handled by an experienced provider who brings best practice? Governance is key to efficiency, and to this end we understand how stakeholders need to be managed effectively, with the right governance structure, so that it doesn’t affect cost profiles and budgets in a negative manner.

On top of this, we fully incorporate social value, a modern defining factor in successful project delivery. One only has to look at the lasting legacy of our defining projects, including the WW2 Spitfire exhibition in Stoke on Trent, to understand how important supporting and restoring local history and heritage can be for local communities. We deliver better together, in partnership with local SMEs that really care and understand the value of the communities in which they work.

While public spending will inevitably be in headlines over election year and more, it is now time to understand how efficient procurement programmes may just hold the key to successful project delivery, and help alleviate local budget pressures.

For more information and to learn more about how we can help your local government needs, head to our sector page or contact us.