How can Councils Save Money – 10 Tips for Thriving in Unprecedented Austerity

22nd February 2024

by Mark Gannon

For nearly 15 years local authorities have had to face and manage the twin challenges of decreased funding, while demand for statutory services increases (the services they are legally required to provide). These services include adults and children’s social care and the provision of temporary accommodation and homelessness support. As a result, this has led to many local authorities now facing a significant risk of entering a financial crisis, at an unprecedented scale. Download the Top 10 Tips; How can councils can save money.

The fallout of the pandemic and the cost of living crisis has significantly increased pressure on local authorities when it comes to statutory services, as funding from central government lessens. First up is social care. The number of over-65s in England increased by more than 400,000 in the past five years, and the older people get, the more likely they are to need care. There has also been a surge in the need for children’s services, with more than 20,000 extra referrals between 2020-22, compared with a decrease of 1,400 year-on-year between 2018-19.

Lastly, there is housing. The number of households living in temporary accommodation – a cost incurred by local councils – reached a record high of nearly 100,000 as of 2023. The cocktail of hardships local authorities are facing is sure to result in more councils struggling to meet financial budgets and potentially declaring bankruptcy.

So, how can councils save money?

There has been an increasing number of local authorities declaring effective bankruptcy – known as section 114 notices – in the past few years. In fact, according to the Institute of Government there were more in 2023 than in the 30 years before 2018.

The Local Government Association also stated around 90 per cent of councils were using dwindling financial reserves to keep themselves running over the past few years. And a quarter of councillors have expressed that it is likely their local council will go bankrupt in the next five years, unless funding and support from the UK Government increases.

Recently, cross-party MPs on the levelling up, housing and communities committee called out the UK government to act now if they want to avoid a severe crisis and financial distress. This follows the publication of a recent report outlining that funding available to local authorities has not kept pace with pressures, which has led to a funding gap of £4bn.

So how can councils save money and even avoid bankruptcy, all while receiving significantly less funding and needing to continue serving their constituency? Overcome budget constraints with Citizen Hub.

Utilising technology where possible can provide some help. In an era dominated by technology, digitising internal operations allows for streamlining bureaucratic bottlenecks, improving overall workflows and saving costs.

How can councils save money with digital adoption?

Many local councils are stuck using legacy systems, with a vast amount of data trapped in silos. Unlocking that data can allow local government to create new insights, drive service improvements and identify early interventions. Application rationalisation to streamline processes can mean that some licences are no longer needed. All of which can help councils to save money.

There are 10 ways in which councils can ensure digital adoption success:

1. Unleash the power of data

Councils gather huge amounts of data. But how much of it gives you any value? With the right solutions, you can break down data silos and quickly connect data sources to create “one version of the truth”. Using this source of real-time, reliable data, some functions can be automated more easily, saving time and cost – while other new digital services can be rolled out to citizens. Data will also bring you insights when you use analytics tools. For example, you track demand for council services and apportion resources more effectively.

2. Collaborate and share

Local authorities across the UK face common challenges and opportunities as they aim to meet targets, save costs and benefit communities. That’s why inspiring innovation stories and best practice should be shared. But it’s possible to go further – and share the apps that deliver success. That’s what Netcall’s AppShare Community is all about. Councils have free access to ready-built and easy-to-customise apps, modules and widgets. These cover everything from time-saving digital tools for dealing with abandoned cars to faster ways to manage Freedom of Information requests.

3. Reshape the procurement of digital solutions

Councils can find themselves on an IT purchasing and upgrade cycle – and they can’t get off easily. They get locked into a vendor’s roadmap, even if it doesn’t align with their goals and the licence fees keep rising. However, low-code platforms enable councils to break free and use their budget far more effectively. These platforms are also good news for council IT departments, saving them from having procure new solutions every time there’s a request. The best low-code platforms come with editable interfaces, IT templates and drag-and-drop tools make it possible for project teams to build apps without needing coding skills. Everything’s in one place and integration is simple.

4. Use digital tools to transform internal operations

So often, back-office council processes can be convoluted, paper-based and prone to error. This makes them slow, wasteful and costly. If you could start again and redesign them, they’d look different, right? With low-code solutions and robotic process innovation (RPA), you can do this easily – using the ideas and talents of your own team. You can map, centralise and connect processes to support a culture of continuous improvement as the internal needs of your council evolves. This can save your teams hours and hours of hunting for the same data repeatedly. Just make the data available easily, in one place. That’s a key reason why so many councils are won over by low-code platforms.

5. Focus on early intervention and prevention

If your core IT platform is infused with AI, you can spot issues in your services sooner. You can track peaks and troughs in demand more easily – and look below the surface. For example, AI-powered sentiment analysis can be used to capture and analyse conversations with citizens via your contact centre. Tools can score your team’s interactions with customers and flag common issues that are being raised. You can quickly identify pain points, trends, and areas for improvement – which all leads to smarter, well-informed decision-making to improve quality and save money. 

6. Design services with citizens in mind

So often, large IT projects fail to deliver on their promises – and councils fail to recoup the cash they need so badly. A common problem is user engagement. Citizens may not like new services – and so uptake is poor. With low-code development, councils have an exciting opportunity to invite users to shape digital services they’ll benefit from. With low-code, you can build digital services incrementally, innovating-as-you-go – and making sure everyone’s voice is heard at every stage. The outcome? Successful services that everyone values.  

7. Rationalise application estates 

How much of your budget is spent maintaining legacy systems? Many councils struggle with outdated applications that offer limited innovation, but are costly to support. And even if a sizeable budget is available for a replacement, there’s the fear of getting locked into another system that offers diminishing value over time. That’s why so many local authorities are switching to an agile, low-code development platform that’s the perfect fit for local government. You can integrate easily with new and existing applications, while offering a layer of innovation on top. Over time, more of the legacy estate can be replaced by new digital services and safely ‘retired’, saving a fortune in licenses and support. 

8. Use technology to attract and retain talent 

Being unable to attract and retain great employees isn’t just bad for team morale – it’s a significant cost. Each time you invest in someone, they leave, which means more rehiring and training expense. One reason for this could be because employees feel swamped by morale-sapping manual tasks or have to switch between multiple applications on legacy systems to do their job. But a low-code platform can transform the employee experience and help to increase staff retention. What’s more, you can involve people in fixing the day-to-day challenges they face every day. They can help build problem-solving apps themselves quickly – and feel empowered and more invested in the success of services.  

9. Map, improve and control processes 

Where might innovation give you the biggest, fastest payback across your services? Where are the bottlenecks and labour-intensive tasks you wish you could digitise? Finding the right tools for mapping, improving and controlling processes at your council is the start. Your teams can then get a powerful overview of what’s working, what’s not, and what can be improved with key services. You can then embrace low-code tools, AI and robotic process automation to join the dots – creating lower-cost, adaptable services that can scale easily. 

10. Continue to digitise services

Digital transformation can be slow, expensive and complex – with large systems often failing to deliver a swift return on investment. But low-code platforms can put councils on the front foot. Now, you control the speed and direction of travel. You can innovate your way, using your people – and make transformation part of your culture. You can advance in little, incremental steps, ensuring you’re always in tune with citizens, employees and other stakeholders. The result? You get end-to-end digital services that provide standout quality for less money. Here are some frequently-asked low-code questions from councils – and helpful answers.   

Revolutionising the public sector with digital technology

The public sector, especially local government, has been slow to adapt to modern digital technologies. A cultural shift is needed to realise the advantages of digital technologies and the potential improvements they can bring to local communities when implemented correctly.

Taking a proactive approach to implementing digital technologies is essential to the effective delivery of services focused on citizen needs. This starts with tackling technical debt, skill shortages, financial limitations and embedded legacy systems within councils. Collaboration is the key to achieving this. Implementing a first-class IT infrastructure, paired with a data management strategy empowers local authorities to focus on improving outcomes for their people and places. Simultaneously, a good digital strategy should strive to support vulnerable citizens who are unable to engage with digital technologies.

The promise of digital transformation can create impactful and lasting change, which is why it is essential to invest in technology where possible to support local communities. With collaboration and a good digital transformation roadmap, councils can provide the best services and support to the citizens they serve.

Citizen Hub is our full-stack, low-code application development software case management solution. It offers councils easy-to-use and cost-effective workflow and process automation. It gives users access to valuable apps designed specifically for local government and allows them to join a collaborative community with their peers. This makes digital transformation and digital adoption much more successful.

Mark Gannon, Director of Client Solutions, was interviewed on the topic of ‘How can councils save money’, discussing how intelligent automation can help councils to innovate, save time and money, in a podcast with Matt Masters, ‘Truth about local government’.

This article also featured in Open Access Government: Digital adoption: Ten tips for local government to save money through unprecedented austerity.