Tech impact of council budget crisis

Councils around the UK are looking at how to save money as they struggle to keep a tap on inflation and rising costs. Local services are being cut and council taxes are being hiked. None of this is good news for the communities and residents who rely on these services and those households struggling with ever-increasing bill payments.

Investments in tech and smart cities can save money. Connected and smart city infrastructure are among the areas the government is keen to support. In a blog posted on the TechUK website, Ceren Clulow, programme director for Connecting Cambridgeshire, wrote about how the county council successfully bid for £10m of additional funding to support its digital infrastructure programme.

It is easy to see the attraction of such technology initiatives, providing greater access to digital services and helping to boost local economies. But technology spending is one of those areas which is likely to see cost-cutting measures, in order to help councils keep essential services running. For instance, looking at the finances at Birmingham City Council, it is clear that councillors are struggling to find maybe tens or hundreds of thousands needed to keep a service like a local library or youth community centre running.

In 2021, the Parliamentary Office of Science and Technology (POST) published a report on smart city technology, which states that while public investment is helping to drive adoption in the UK, funding within local authorities are among the barriers to adoption.

Last September the government announced £1.3m in funding for six regions across the UK to pilot smart infrastructure. Local authorities are putting up £2.9m into the pilots. Even if such pilots are in the budget, the immediate costs are very likely to be scrutinised, especially in a situation where essential services are set to be cut.

Are there opportunities to deploy technology smartly, in a way that does not directly compete with funding for essential council services?

Perhaps not, but the botched implementation of Oracle at Birmingham City Council should be used to open up an informed debate across local government on how these major projects should be run.

There is the question of why upgrade at all. The tech sector should offer a cost-effective migration path. In order to keep costs down, local government IT leaders should discourage council leaders from insisting on customisations. As more of the standard ERP or HCM (human capital management) system is deployed, there is a genuine case for building out shared services, to distribute costs among two or more local authorities. These things have failed in the past, but with the budget crisis facing many councils, isn’t it time they are reconsidered?