In the first of two articles on a once-in-a-lifetime opportunity to radically rethink how we deliver services to citizens, we examine the impact of the Covid-19 pandemic on councils’ ability to deliver vital services and look at how councils can deliver services to vulnerable citizens on a shoestring.

No industry or organisation has been left untouched by the Covid-19 pandemic. Across the UK, both the private and public sectors are having to deal with extraordinary levels of economic, social and technological disruption. Organisations of all domains, shapes and sizes are grappling with new challenges, behavioural shifts and ways of working.

Local government has been hit hard. After many years of budget cuts and austerity measures, many councils were already struggling financially before the pandemic. The combined challenges of delivering services under lockdown, communicating at the pace and frequency required to keep citizens informed, supporting businesses and communities who have suffered, and doing this while many staff are either sick or on furlough has been an enormous challenge.

The additional pressures presented by Covid-19 have left local authorities stretched to breaking point, with many considering section 114 notices (these are issued when a council cannot achieve a balanced budget).

But with disruption comes the opportunity to drive real change that goes beyond incremental tinkering. The pandemic has highlighted the need for resilience and, as the world recovers and gets ready for the next black swan event, this change is needed now more than ever. It is an opportunity to reimagine what a new era of digitally enabled services might look like for citizens and to fortify those who provide them, so they are better placed to manage the volume of digital services now demanded, set up new solutions and adapt service delivery for the future.

The impact of Covid-19

Local government has had to tackle the pandemic’s impact head-on. Many authorities have done a remarkable job of ‘keeping the lights on’ by providing critical services, such as social care, transport, housing and waste collection. At the same time, they have also had to manage the same significant workforce transition to home working that we all faced, while also ensuring the safety of those operating in the field – the key workers who continued to protect the vulnerable, drive public transport and collect our waste. These are services that many of us take for granted and, while our offices and schools closed down, local authorities worked hard to maintain these cornerstones of ‘normal’ life.

On top of this, local authorities have been providing additional services, such as funding for small businesses through Local Authority Discretionary Grants Funds and Business Interruption Funds, and supporting vulnerable citizens through Council Hardship Funds and Community Initiatives Funds.

Looking forward, as the economic impact bites harder, it’s likely that local authorities will face even greater challenges as unemployment increases, the number of vulnerable citizens grows, demand for benefits, housing and care increases and decisions about where to allocate budgets become harder.

Spending cuts continue

The economic challenges of Covid-19 come on the back of a decade of austerity, during which councils have been asked to do more with less year-on-year. According to the Institute for Fiscal Studies, on average, local government spending on services fell by 21% in real terms between 2009 and 2019.

With an ever-increasing elderly population and a rise in the number of disabled adults, social care is particularly under pressure. As a result of cuts to local council budgets, around £7bn has been taken out of the social care system, leaving it fractured and underfunded. Compounded by Covid-19, there is now an urgency unlike ever before to rethink how the system works and how to deliver the outcomes that are desperately needed.

As we start to emerge from the pandemic, several local authorities face the very real possibility of further deep spending cuts as the fall in business rates, council tax and transport fare incomes erodes their revenue. Some estimates suggest the cost of the crisis to councils could be as much as £13bn this year alone. Given that, as of 31 March 2019, local authority reserves were estimated at £25.5bn, Covid-19 could wipe out a staggering 51% of that figure. What happens if we have a second wave?

The big question local authorities now face is whether they can continue to cut incrementally and find further efficiencies, while simultaneously protecting the most vulnerable in society and improving the delivery of local services for the community as a whole. We’ve already seen many councils sell off property and reconfigure their financial arrangements. Bristol City Council announced it was putting Bristol Energy up for sale, and nearby Bath and North East Somerset Council is looking to sell its commercial interests in the city, to make them financially viable. 
We see similar challenges in health, justice and education. The status quo is not sustainable, so is it time for a more radical approach if they are to do more with less?

Protecting the vulnerable

One of the core jobs of local authorities is to provide public services for the vulnerable, such as children’s and adults’ social care and housing support. ‘Vulnerable’ is a broad term and can relate to physical, mental or financial circumstances, for example those at risk of domestic abuse, the elderly or the unemployed. Multiple sources of data about and definitions of vulnerable people exist and are continually evolving.

To make the situation more complicated, people can move in and out of the ‘vulnerable’ classification, depending on their life stage. As a result, even identifying who is vulnerable in the first place is a challenge for many councils. Some local authority databases are as much as 50% incomplete and analysis remains difficult.

Imagine what we could do if we applied the same principles to vulnerable citizen data that are being discussed in the healthcare arena today. Instead of cobbling together disparate databases based on paper records and forms, an accurate centralised understanding of vulnerable people to join up digital services and create passports of need across housing, healthcare, education and social care could prove invaluable.

Might this joined-up view of those who are most in need, and who require a disproportionate share of spend, help to reduce cost-to-serve and make delivery of services more efficient? Just as private sector businesses are using artificial intelligence and machine learning as key enabling technologies to inform business decisions using data, could better use of data pave the way for better outcomes for citizens?

For local authorities, effective digital transformation can also drive up productivity and resilience in the face of volume fluctuations. Take for example how customer advisory bots have been helping customer services teams during Covid-19 as they deal with the large increase in citizens’ queries and benefit claim requests. By taking the strain off customer service teams during such challenging times, bots free up agents to focus on helping the most vulnerable callers who need personalised, human support.

Digital design and build with data at the core are the key to delivering smart services fit for the 21st century. Identifying vulnerable citizens, then projecting service requirements smartly, and underpinning these actions with the right technologies and infrastructure, would enable increased efficiency, better budgeting and prioritisation of services in the future. This data would also help local authorities to provide services that are needed today and build services where need is growing. Imagine if they could support decision-making by predicting where needs were greatest and, therefore, put preventative measures in place, rather than dealing reactively with challenges much later down the line?

Smarter services will only improve citizen experience and protect the most vulnerable.

Our experts

Oli Freestone

Oli Freestone

Head of Capita Institute

Oli Freestone is responsible for digital thought leadership, research and insights as Head of Capita’s Institute. He has worked across multiple industries as a management consultant, has expertise in strategy, technology and innovation, and is a regular contributor to leading publications on these topics.


Simon Freeman

Simon Freeman

Managing Director, Capita Local Public Services

Capita Local Public Services works in partnership with local authorities, and the education and health sectors, to improve resident and user experience, save money and transform services. Previously, Simon was responsible for Capita’s DWP contracts and has worked in a number of private and public service delivery organisations over the last 15 years including BT and Serco.


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