Think tank Policy Exchange has published a report that claims local authorities could save up to £10bn by 2020 if they adopt smarter and more collaborative use of technology and data.
Small Pieces Loosely Joined highlights that councils lose more than £1bn each year because they fail to identify when fraud has taken place.
It also focuses on how a lack of data sharing and collaboration between local government and the use of bespoke IT systems makes the cost of providing public services unsustainably high.
“Can-do councils are already delivering multibillion-pound savings through embracing the digital age and the efficiencies this new dawn offers to them,” claimed Local Government Minister Kris Hopkins.
“But, as this report shows, they can go much further and town halls should now be tapping into these new opportunities to make the necessary savings to protect frontline services and keep council tax down for hardworking families.
“Local government accounts for a quarter of all public sector spending and should therefore play its part in reducing the inherited deficit.
“This could include doing more joint working, getting more for less through smart procurement, tackling local fraud and council tax arrears, or utilising their reserves and surplus property,” Hopkins added.
The Policy Exchange report identifies three ways in which local authorities could save billions of pounds, as well as better, more coordinated public services.
These three recommendations are using data to predict and prevent fraud, sharing data between neighbouring councils and phasing out costly bespoke IT systems.
According to the document, councils has shouldered the largest spending cuts of any of the public sector, although they provide 80% of public services.
Local government has been left with a funding shortfall of £12.4bn by 2020 as a result of these cuts.
The think tank acknowledges many local authorities are coping well underneath this financial pressure and are developing innovative schemes using data to ensure they scale back spending but continue to provide vital services.
“Local government has spent five years cutting back. We haven’t just cut to the bone, we’re now scraping the bone,” claimed Richard Copley, corporate ICT manager at Rotherham Metropolitan Borough Council.
“This activity has taken massive amounts of cost out of local government and we have achieved savings on a scale that the 2010 versions of ourselves would have derided for being so large as to be the stuff of fantasy.
However, according to Copley, most local authorities are still persisting in doing the same things in the time honoured fashions.
“It’s for us to call an end to the half-decade of inward focus – of salami slicing and thinning out – that work is at an end,” the ICT manager claimed.
“We must now look outwards as we enter the second half of Local Government’s Decade Horribilis with our eyes on the real prize – changing the way we work by blurring, or entirely removing, the boundaries between many of the public sector organisations,” he added.