*UKHotViewsExtra* Local Government Services Market – A Liberata perspective

Whilst Local Government will remain under huge financial pressure for the foreseeable future, the sector will continue to look towards SITS suppliers as a source of innovation and as a catalyst for transformation. Business Process Services (BPS) supplier Liberata has been one of the best performing SITS suppliers in the Local Government market of late, (Liberata wins £30m joint Broxbourne and Welwyn Hatfield contract) and to help understand how the market is developing we caught up recently with Charlie Bruin (pictured), long term CEO of OSUK Professional Services (the parent company of Liberata) to understand his perspective on the sector, and how his firm is adapting its service offer to best address what are increasingly complex client needs.

Liberata’s perspective on the Local Government market

I commenced the interview by asking Bruin to outline the current market environment that his company was operating in with a focus on illustrating the challenges and constraints that his clients were encountering, in what remains Liberata’s core market (Some two thirds of Liberata’s business is in Local Government).

Bruin started by outlining the scale of the financial challenge. Whilst Local Government had recently received a c.£65bn financial settlement this year (representing a 6% uplift) plus a modest £600m top up confirmed last week, London Boroughs, Metropolitan and Unitary authorities, have all seen their budgets ‘sucked up’ by adult social care and children services, with both inflationary pressures and increasing demand for services challenging all councils, but particularly those with extensive statutory services. UK Local Authorities of all shapes and sizes have logically been finding this extremely difficult and have been struggling to balance their books. Even if you look at District Councils which do not have schools or social care responsibilities, he still sees budgets stretched precariously by other statutory obligations that get ever more expensive, such as like dealing with the homeless and in providing temporary accommodation for people in need.

Bruin’s other issue with the 6% settlement increase is that it assumes that Local Authorities will increase Council Tax by the maximum amount of +5%, that will in turn pass the burden onto the householder and council taxpayer, so that the actual amount of incremental money coming in from Central Government via Central Grants is lower than the quoted 6%. The reality is that the total amount of funding coming from Central Government has reduced significantly over the last 10-15 years, probably down some 40% to 50% over that period.

Consequently, Liberata is seeing Local Authorities put under significant pressure to raise revenue in ways that do not place too much of a burden on already overstretched households. Councils have to find a means of ‘balancing their books’ by managing their cost base, despite inflation washing through their organisation – something that was a particular challenge last year - whilst continuing to deliver statutory obligations and invest in technology, all at the same time.

From a SITS perspective Local Authorities are still looking to move their on-premises infrastructure to the Cloud as they look to upgrade and move to new security accreditations. They have also got to use new tools whilst dealing with increases in the cost base such as uplifts in the National Minimum Wage and in the National Living Wage (up by 9.8% this year). Cost pressures such as these are coming from several different directions and are impacting the ‘headspace’ available to undertake the required levels of investment in both improving services and outcomes for their users.

TechMarketView clients (including subscribers to UKHotViewsPremium) can read the full interview with Charlie Bruin by downloading *UKHotViewsExtra* Local Government Services Market – A Liberata perspective. If you do not currently have access but would like to read this UKHotViewsExtra please contact Deb Seth for more information.

Posted by: Marc Hardwick at 13:19

Tags: interview   Local Government  

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