Cheltenham Borough Council says the partnership will enable the sharing of procurement strategies and ideas © Getty Images
Cheltenham Borough Council says the partnership will enable the sharing of procurement strategies and ideas © Getty Images

How the public sector plans to make £1bn

4 December 2020

The UK has launched an initiative to save or make £1bn for local authorities by September 2022.

The £1B Challenge will combine efforts of local authorities to generate, share and pilot projects aiming to “achieve more with fewer resources”, utilise new opportunities for joint procurement and ventures, and accelerate “quick wins” that can demonstrate ROI within six-12 months. To date, 113 local authorities have joined the initiative. 

Led by public sector consultancy Commercial Gov, the group has collaborated with councils, including Cheltenham Borough, Dudley and the London Borough of Hammersmith & Fulham. It also worked with idea management software firm Wazoku, who's platform will collect, evaluate and share ideas that local authorities can vote on to decide which to develop into pilot projects.

Following last month’s Public Spending review announcements by Chancellor Rishi Sunak, some UK councils, such as West Sussex, Lewisham and Manchester City, have started planning cuts to services including subsidised public transport, family and social care, and support to the elderly and homeless, reported the Guardian.

However, a £4bn deficit is still expected in 2021, according to the LGA, despite a decade of austerity, including £805m cumulative efficiency savings by 2018 achieved by councils setting up 550 shared services.

David Elverson, Commercial Gov managing director and founder of the initiative, said: “Local authorities have worked tirelessly to reduce costs and make efficiency savings but there is not much left for them to cut. It’s now a question of thinking differently.”

The next stage of the £1B Challenge, planned for January 2021, will be “to get more focused by running short, time-limited challenges that link to specific service areas, such as regulatory services and children's services” to identify where the opportunities are, said Elverson.

From here, the joint procurement team will explore how local authorities can strengthen public bids and use economies of scale to procure expensive resources, such as technology.

Elverson said currently, in terms of using joint procurement, “there's an idea around embracing digital to engage with communities in new ways, and using big tech communications firms with a huge amount of data to do that”.

Sanjay Mistry, commercial programme manager of the Commercial Services Board at Cheltenham Borough Council, told SM: “There are opportunities to share ideas with like-minded individuals and get some feedback, as well as to understand how others are dealing with procurement challenges and the strategies they're taking.

“With the constraints we're facing at the minute, financially, this has got to be a way forward for us to share opportunities and deliver greater benefit, as opposed to working in silos and really struggling.”
He added that unlike the council's "finite" procurement resources, “by accessing this partnership, we've now potentially got a whole raft of procurement specialists from different facets that we can tap into”. 

Darren Wright, executive director of people and change at Cheltenham Borough Council, said as an “entrepreneurial council”, Cheltenham will use the initiative to find new opportunities that align with its commercial objectives, such as climate change, increasing expertise as part of its bid to become the “cyber hub of the UK”, and enabling the build of more social and affordable housing.

According to Cheltenham Council's Covid recovery revised budget report to the government in November, Covid has incurred a “significant additional expenditure” and would require an additional £2.616m of savings outside of this year's impact. Various public sector bodies, including the LGA, have been lobbying the government for Covid support funds to cover losses estimated at over £10bn.
Pre-Covid figures predicted that local services will face a funding gap of £7.8bn by 2025, with £16bn worth of core local government funding cuts between 2010 and 2020 likely to result in demand for services, such as social care and children’s services, not being met if cash funding doesn’t increase, according to a 2018 report by the Local Government Association (LGA).

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