Autumn Budget 2024: Impact on Local Authorities & Public Sector

14th November 2024

Technology at the heart of public sector reform. What does the Autumn Budget mean for Local Authorities?

By Deane Greenouff, Executive Director for Local Government, Civica.

In her first Autumn Budget, the role of technology in repairing public services was never far from the Chancellor’s plans to improve efficiency and drive productivity. “Just as we cannot tax and spend our way to prosperity, nor can we simply spend our way to better public services”, she said. “We are introducing a new approach to public service reform using technology to improve public services.”

While at the despatch box, Reeves championed technology’s ability to better join up services, to modernise digital operations, and as a key enabler that will allow the new government to focus on delivering its priorities.

At Civica, as a global GovTech champion, we create world-leading software designed to deliver critical public services more effectively, so this aspect of the Budget was very much singing our tune. By automating processes, digitising more services, and creating insights to improve decision making, our software demonstrates exactly the role that technology can play in releasing more time and money for the councils, local authorities and government departments that we partner with.

Through these relationships, we understand the extent of the challenges faced by the public sector to meet increasing demands with limited finances. It means that we also understand that the task ahead is really just beginning.

So, what technology insights can we offer against some of the key Budget announcements?

Maximising local government funding

Local governments will get £1.3bn of additional grant funding to deliver essential services. This means core spending power is projected to increase by approximately 5.7%. Metro Mayors have been rewarded with increased control over how their local funding is spent, as well as an extra £200m to invest in local transport, which should mean that regional projects can reach value quicker.

An important boost for local authorities came with housing measures to reduce right-to-buy discounts so that authorities will retain the full receipts from the sale of social housing to be reinvested back into the housing stock. This will work towards increasing the supply of affordable housing and alleviate some of the financial strain.

There will also be support for the £1bn that is set aside to continue removing dangerous cladding from buildings as part of remediation following the Grenfell Inquiry. The financial burden and emotional stress of such important work has hung heavy for a long time, so it is good to see that it remains a priority. In general, there are lots of opportunities to improve social housing management and we can predict that better systems to digitise this space and improve the customer experience will keep growing in 2025 and beyond.

These budget top-ups are welcome, but another note of caution comes with the fact that spending growth is very front-loaded for the first two years of this government, and it’s no secret that budgets will still be relatively tight. There will be pressure to make sure that the money is invested wisely and early on before purse strings are tightened.

Local authorities will need to make smart decisions on the types of technologies that are going to make the biggest and fastest impact to their day-to-day operations. We are seeing a lot of requests, for example, for software that helps remove administrative burdens around things such as managed services for social housing, electoral roll updates, or how to process customer complaints and requests. Automating these tasks can be an easy win and means that improvements will be fast and incremental.

Improving productivity through technology

A 2% productivity, efficiency and savings target was set for all central government departments next year, and the strategy is to use technology to join up services. Central to this will be the ability to master data management.

Integrating data sources from multiple operational systems is no easy task. Data records need to be completed accurately and made easily shareable, and all in a consistent way. A unified approach is essential in making this work. This is especially important when more than 57% of civil servants report difficulties in using data from multiple sources, according to our recent Digital Productivity Report.

When done correctly, data management will be foundational in driving new efficiencies and improved decision making. It will also be critical when integrating additional new digital services in the future, as this all relies on smooth data exchange. Getting it right early on will pay dividends later, and this is a lesson for any public sector organisation seeking productivity improvements as well as cost savings.

Healthcare is another area with a 2% productivity growth target for next year. To help it meet its many challenges there is a £22.6bn increase in day-to-day budgets and £2bn to invest in NHS technology, which offers a lot of opportunity to advance things such as Electronic Patient Records that will help deliver more joined up health services. Social care is an area that needs a lot of support. Of the additional grant funding allocated to local authorities, £600m has been specified for social care. Taking a look at solutions that can optimise workforce management and the delivery of services in social care could offer some relief that can be implemented early and cost effectively.

Technology is the game changer

Amid fiscal pressures, boosting public sector productivity and efficiency is more urgent than ever. A focus on technology, increased funding and long-term planning are key to driving digitisation and improved outcomes. Automation in particular will enable reductions in administrative burdens and deliver better productivity, so it offers opportunities to deliver immediate benefits. From there, it will be a case of continuing to work together towards addressing larger challenges through GovTech innovation.

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