Rethinking resilience: technology can help local councils face unprecedented challenges

As 2023 unfolds, the UK’s public sector still finds itself in the midst of an extended, difficult winter – but how can local councils overcome this?

Having already summoned fresh reserves of resilience throughout the disruptive events of 2022, local councils are now tasked with digging even deeper to contend with a cost-of-living crisis that shows no sign of relenting. With soaring inflation leaving local government facing a funding gap of £3.4 billion in 2023/24, the pressure is on local councils to do much more with less – especially as tough financial times drive more people to submit benefit claims, stretching processing capacity to its limit.

So how can local councils navigate the complex path of budgetary prudence while managing ever-expanding workloads, and is introducing technology a silver bullet for coping with external change?

Double trouble: as revenues are squeezed, demand for benefits will rise

There are a number of pressing challenges facing local councils throughout the UK this year, but chief among them is the impact of the cost-of-living crisis which will be felt in a variety of ways. For any council, the largest locally-funded income stream comprises council tax and business rates. But payments to these budgets are likely to fall as people struggle with inflation and rising living costs ripple through the economy, resulting in an increase in the number of people claiming benefits.

In addition to the significant rise in disability or sickness benefits experienced in recent years, this year will see a rise in those claiming income-related benefits.

This spike in applications will inevitably impact the workload of the teams processing benefit claims, as well those involved in managing and recovering debt, which can be a resource-intensive activity.

Key to staying agile and resilient through this period will be introducing the capacity to automate many of the tasks that are currently undertaken manually. It’s no secret that legacy systems, while able to deliver basic functionality during normal working conditions, often involve an elaborate manual process to keep them working. Sometimes data generated in one system must be manually keyed into the subsequent system in the workflow to progress the task to its conclusion.

Despite financial pressure, local councils need to pursue more process automation to transform services

Despite financial pressure, local councils need to build a business case to pursue more process automation to transform how services in local authorities are delivered. As workloads rise, scaling a workforce in line with existing processes is not always a viable option, and solutions that can scale using technology rather than more human resource are clearly more beneficial.

Mind the skills gap

Closely intertwined with the issue of increasing workloads is the scarcity in supply of skilled labour. A critical shortage of workers across the finance and accounting sector is likely to impact the provision of services by local councils in the months ahead.

As demand for services increases, local councils may struggle to hire in line with requirements, and competition in the job market means new hires may only be tempted by inflated salaries. Experienced accountants and finance professionals, capable of quickly prioritising their workload and delivering accurately and consistently, are in high demand right now. This fact not only impacts the recruitment process, it also has an impact on retaining staff. As the cost-of-living crisis takes hold and energy bills weigh more heavily, skilled staff may well be tempted to switch to the private sector as a way to tame increasing household costs and shore up the family finances.

Decision-makers will have to build resilience in this area through boosting investment in technology that can augment the skills and experience of existing staff. Often, technology is given as a reason for replacing jobs undertaken by humans, but the trend now is to view technology as a means of augmenting human effort. In this sense, employees are able to direct and orchestrate their workloads without recourse to repetitive data entry. Improvements in working conditions lead to increased job satisfaction and ultimately support the retention and development of talented staff.

One aspect of building intelligent working conditions is through the use of Artificial Intelligence (AI), which is capable of reducing the burden on employees by undertaking work that can be automated. Typically, this involves using Robotic Process Automation (RPA) to manage duplicate processes such as connecting disparate legacy systems that have evolved organically, helping to bridge silos with other departments.

Using data to make decisions, the simple way

The introduction of innovative technologies solves a number of problems simultaneously. While improving employee satisfaction and increased productivity, as staff are freed from routine activities to concentrate on solving more complex and pressing issues, digital transformation also allows for new streams of data to be collected that can form the basis for informed decision-making. Before an organisation embarks on a digital transformation, reports are often delivered as a snapshot of a particular moment in time.

The entire process of generating a report may even require a project manager to coordinate it and involve dragging people from their day-to-day roles. A reporting structure that is convened in this manner will usually merge independent data sources, often generated by manual input. The upshot is that ad-hoc reports are expensive, present information that is already stale, vary in accuracy and provide a dim beacon for guiding leadership teams through stormy weather.

Real-time reporting, enabled by investing in new technology, delivers live operational dashboards, on-demand analytics and the ability to drill down into data sets to unearth new insights. This granularity and sophistication is fundamental to understanding the workings of any organisation, be it public or private, and allows local councils to recognise the impact of external events and deliver a measured response. This flexibility is a fundamental part of the resiliency required to overcome the seemingly endless conveyer belt of crises cascading to the local level.

Insights from this data will be able to support decisions to consolidate suppliers to achieve better savings

A key example is procurement. A good source of data will tell a council instantly how many suppliers it has, and what prices it is paying for products and services. Insights from this data will be able to support decisions to consolidate suppliers to achieve better savings from higher purchase volumes or amalgamate purchasing across departments or regions to receive better terms. Managing data can provide insights into how money is being spent and where the value lies.

Barriers to adopting technology

Most areas of local government understand the outcomes that they want to achieve with technology, be it discovering and operationalising new revenue streams or improving service efficiency. The most fundamental problem when it comes to introducing new technology is providing answers to the questions: Where do I begin? and: How do I manage a digital transformation, when there is a legacy infrastructure to keep up and running? Legacy systems and processes can be so interwoven and embedded in the operational fabric of an organisation that most managers are focused solely on keeping the services alive, especially as a large part of manufacturer support has long since expired.

Can outsourcing provide an answer?

The nature of outsourcing has changed in recent years, and the old approach of ‘lift and shift’, which focused on moving human resources from one budget to another, is making way for a new digital and platform component of the business process services (BPS) market. Local councils have a great opportunity to leverage specialist providers of digital business process outsourcing who can help them establish the correct starting point and form a strategy to deliver the required outcomes.

The accelerated digital adoption since COVID-19 will be given a thorough stress test this year as economic stability remains tantalizingly out of reach. All areas of local government will feel an increased burden, but those local councils that can demonstrate resilience, the ability to react to the pressure and carry on despite it, will almost certainly be the ones who have embarked on a digital transformation journey and understand how to manage business process services, either internally or through a trusted provider.

by Nick Peplow, Financial Services Director at Liberata