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Are UK councils looking at a shared future?

Figures from the Local Government Association (LGA) recently revealed that councils are trying to save money by sharing services. With pressure on public funds showing no signs of easing, could sharing be the new normal for local authorities?

The facts

Data obtained by software firm Citrix indicates that sharing is on the up. Of 314 UK councils that responded to the outfit's freedom of information request, 89 per cent already pool services like IT and Customer Relationship Management systems.

The LGA’s findings, meanwhile, reveal that councils across the country have saved £462 million via shared service initiatives in the last three years. More than £100 million was saved in 2014 alone.

What's driving this change?

Central government funding for councils is due a 40 per cent reduction, forcing local authorities to make savings wherever possible. According to Citrix, austerity has forced many councils to review their processes and take a new stance on innovation.

All signs point to resource pooling becoming more commonplace – North East England alone saw 38 new sharing arrangements implemented in the 12 months leading up to May 2015.

Jason Tooley, UK and Ireland country manager at Citrix, told TechWeekEurope UK that councils most "innovate to deliver vital services” in the context of further cuts. Mr Tooley also stated that an “an increasingly complex landscape of shared services" is on the horizon.

Is sharing a cure-all?

While increased focus on innovation is undoubtedly positive, some commentators are concerned that joined-up services may represent a privacy risk for ordinary citizens.

Secondly, although councils are actively exploring new ways to pool resources, it's already clear that this won't always be possible or desirable. Some authorities may be concerned about losing their organisational identity, for example, while others may worry about trust issues. Ultimately, there will always be a limit to how much local authorities can share without drastically compromising on service delivery.

Fortunately however, sharing is not the only weapon in local authorities' arsenal. Councils can also ease pressure on their budgets by enlisting the help of Dukes Bailiffs. Our Enforcement Agents are trained to cover outstanding debts ethically, efficiently and sensitively.

If you work for a council and are worried that resource sharing is diluting your services, speak to our Contact Centre Manager today and find out how we could help.

Could council tax be on the way out in Scotland?

Scotland’s Commission on Local Tax Reform has concluded that council tax “must end” north of the border. How would such a shift impact Scottish councils and UK local authorities across the board?

The alternatives

The cross-party commission was asked to explore ways to improve Scotland’s local taxation system, and recently proposed three council tax replacements based on land, income and property.

While the three systems are quite different, all options would follow the 'general tax' principle, meaning that households would no longer be charged for a specific list of council services.

The first proposal is to implement a property tax based on the combined value of sites and buildings, while the second is to raise taxes on land value only. The third and final route would involve a tax based on householders' taxable incomes.

Implications

The commission is yet to formally back any of the alternatives,however its representatives have made their opposition to the current tax clear. The report explicitly concluded that "a better system" can be implemented, and noted that "there is now a real prospect...of beginning a programme to make local taxation fairer".

Doing away with council tax might sound like a radical step, but survey data indicates that the public would welcome changes to the current arrangements. Poorer households could pay less under the income-based tax proposal, for instance, and some commentators view the commission's proposals as a chance to rid Scotland of its Poll Tax legacy.

While an overhaul could lead to positive outcomes, the birth of a new system in Scotland would inevitably invite a cry for change in England and Wales too. Many local authorities are banking on stable council tax incomes to take the edge off austerity, and the fiscal uncertainty introduced by the possibility of a Scottish tax revolution may be unwelcome in this context.

Only time will tell if the commission's report will spark widespread reform. Even if action is taken, there's a strong likelihood that a drawn-out debate will precede the construction of a new system. In the meantime, local authorities can continue to protect essential public services by maximising council tax recovery and minimising council tax arrears.

If you work for a local authority that's facing tough times, contact one of our expert Dukes Debt Advisors to discuss your options today.

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