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A stitch in time - the right approach to local authority cuts

22 September 2010

The impending comprehensive spending review is likely to mean more swingeing cuts across the board for local authorities.

How? Schemes such as PFI, LIFT and BSF have stalled as there is less enthusiasm for the ‘build now, pay more later’ philosophy and local authorities have been forced to examine more imaginative ways of achieving savings whilst still delivering services. The London Borough of Hammersmith and Fulham has recently come up with an interesting list of 105 regulations, the abolition of which it reckons would result in savings of £200 million. Pretty impressive.

But for many authorities, it is likely that cuts in staff and, consultants will be the order of the day. Is that always right? Getting rid of swathes of people with valuable sector and organisational knowledge may mean that expensive mistakes are made. The financial impact of, for example more procurement challenges and litigation, coupled with supplier favoured contracts could more than wipe out savings made today.

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