Coping_with_the_CSR_masthead_v2

 

 

Piggy_bank_iStock_000009466746XSmallOne-in-five local authority legal departments
face the reality of a 20% cut in budget

The government's efforts to reduce the deficit have fallen particularly hard on local government, leaving councils with no option but to identify and implement new ways of reducing expenditure and raising revenue or capital to fund public services. The effect on individual legal departments is no less serious, with the vast majority being subjected to cuts in their budgets at a time when demand for legal advice in many areas is rising.

With this in mind, Local Government Lawyer, in association with DMH Stallard, surveyed 50 local authority legal departments in England and Wales to assess two things: How the cuts are affecting the ability of legal departments to discharge their functions and what role local authority legal teams have to play in helping their employers to raise and protect their revenues at a time when central government funding is being slashed.

On this page, we examine the key findings of the survey, analysing the extent to which legal teams up and down the country are suffering cuts to their budgets and how they are responding to the situation. In the second, we look at the measures that councils are taking to protect or expand their income streams and the role that local government lawyers are playing in helping them to achieve their aims.

We hope that you find it useful.

Philip Hoult, editor


Results

Key stats

  • The scale of budget pressures on legal departments is laid bare: two-thirds of legal departments are facing a 10%+ reduction in budget; one in five are dealing with 20%+ cuts. However, demand for legal advice is increasing across the board, and  particularly in employment, children’s services and contract review. In previous years it may have been “More for the same”, now it’s “more for less”.
  • There is a clear recognition by the vast majority of heads of legal that existing strategies won’t be enough. Nearly all have already joined in with some form of collaborative procurement, through panels, for example, but it is quentionable whether this can contribute to making further savings. Two-thirds of respondents are pursuing shared legal services with another local authority. But such fundamental restructuring has plenty of risks attached. Will shared services deliver immediate savings given the front-loading of cuts? Only 8% say it has already delivered significant savings.
  • Legal teams also have a key role to play in enabling their councils to generate new sources of revenue and to protect existing ones. Those most commonly being implemented or considered are s.106 recovery; charging schools for previously free services; and finding savings through the review of existing contracts.
  • However, the survey would suggest that other opportunities are being under-exploited by many councils. Many revenue generation strategies are seen as risky – politically, financially and legally – while local government lawyers believe there is a skills gap amongst non-legal colleagues to deliver on some forms of revenue generation. While lawyers themselves recognise that they lack know-how in certain areas, they still have a crucial part in ensuring that their employers can go about defending their incomes and protecting council services.
  • Respondents seem relatively confident that they are involved in initiatives at an early stage, but arguably the current environment presents an opportunity for legal teams to take more of a lead.

Budgets

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Demand

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Pressure

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Strategy

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Spend

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Savings

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Revenues

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Risks

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Involvement

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Analysis: My generation

Cog__iStock_000011329332XSmall_146x219Philip Hoult looks at the approach taken by legal departments to revenue generation and extracting maximum value for their authorities. Could more be done in these areas? he asks.

The momentum towards shared legal services looks almost unstoppable, with the ‘map’ of provision being redrawn on an almost weekly basis. These headline-grabbing arrangements can make eminent sense at many levels. But is there a danger that they could distract local government lawyers from other – potentially more immediately rewarding – methods of boosting their authority’s revenues or savings?

For this survey of heads of legal, DMH Stallard and Local Government Lawyer drew up a list of 17 possible ways in which legal departments could deliver added value, ranging from improving recovery of revenue owed under the terms of s. 106 agreements to realising better value from property assets through feed-in tariffs and right to buy schemes. Read more...

Analysis: Best foot forward

Alternative_Bus_Structures_iStock_000003995793Small_146x219Local authority legal departments are facing some stark choices as the financial cuts bite. And there is a growing realisation that the old ways of delivering the service are no longer fit for purpose. Philip Hoult analyses the impact of the cuts and the strategies legal teams are adopting to cope with this unprecedented challenge.

When Manchester City Council announced severe cutbacks earlier this year, it appeared as though its legal team had survived relatively unscathed. A report on the authority’s budget proposals, prepared for a meeting of its Executive, said there was “good evidence that our Legal Service is more cost effective than external provision and externalising this service would, therefore, only increase costs”. It went on to say that £50,000 in efficiency savings had been identified and that the service would work with directorates to consider opportunities for further savings.

The vast majority of legal departments elsewhere in England and Wales have not been so fortunate, a survey of heads of legal by Local Government Lawyer conducted in association with DMH Stallard reveals. Read more...

 


Related news stories

Richmond gives green light to London's first shared legal service
The Cabinet at the London Borough of Richmond has approved the creation of a shared legal service with Merton Council. It will be the first such structure to be put in place in London.

Manchester legal team survives worst of cutbacks
The legal department at Manchester City Council appears to have survived the local authority’s severe cutbacks relatively unscathed. A report said externalising the service would increase costs.

Councils eye £10m+ savings through contract renegotiation
Hampshire County Council has said it aims to save “in the region of £10m” by renegotiating contracts as part of its attempts to meet a £55m funding gap for 2011/12.

OFT chief warns of risks created by long-term contracts
Competition must be “hard wired” into the commissioning and procurement of public services to ensure its full benefits are gained, the chief executive of the Office of Fair Trading said.

Authorities plan counsel fee database in savings drive
A consortium of local authorities in the east of England is to set up a database of practice and fee information for counsel in a bid to secure significant savings on their outlay on barristers.

ACSeS identifies new models for council legal departments
ACSeS has urged local authority legal departments to make “a step change in service quality outcomes, economy, efficiency and effectiveness” to meet the demands of the so-called age of austerity

 

Related feature articles

How to share services effectively
Frank Jennings and Simon Bellm advised Merton Council on its shared HR services arrangement with Sutton Council. In this article they examine what is needed for such projects to work successfully.

First mover advantage
While authorities up and down the country begin to set up shared services arrangements, Legal Services Lincolnshire, the biggest initiative to date, is fast-approaching its third birthday.

Showing leadership
As councils look to implement changes, legal departments are going to have to be on top of their game to ensure that the council acts properly, writes Susan Tovey.

Making the fraudsters pay
Tackling illegal sub-letting has never been a higher priority for local authorities and RSLs, but with ever tighter budgets many will struggle to maintain a sustained campaign, writes Chris Corney.

Facing the future
The theme of this year's ACSeS conference was leadership. With the range of challenges facing local authority legal departments, it is needed more than ever, writes Derek Bedlow.

The future today
Developments such as Tesco Law may have garnered the headlines, but Paul Gilbert highlights four subtle shifts in style that have the potential to be even more revolutionary.


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About DMH Stallard Public Sector Group

DMH Stallard is one of the leading providers of legal services to the public sector in the UK. We work in partnership with local authorities, central government departments, registered providers of social housing, charities, NHS trusts, education establishments and other public sector bodies. Our sector expertise means we fully understand the challenges our clients face, their statutory limitations, powers and duties.

We are acutely aware of the key issues surrounding the drive to reduce expenditure and are considered thought-leaders in this subject. We are leading the debate on key issues such as Shared Services, Total Place and Step-Change Management.

Our multi-disciplinary team of experts have been working with the public sector for over ten years and advise on administrational and local government law and on strategic and operational issues

Our expertise includes:

  • Admin and Local Government Law
  • Commercial, Contracts, IP & IT
  • Construction
  • Dispute Resolution including Judicial Review
  • Debt Recovery
  • Employment
  • Housing
  • Planning and Highways
  • Procurement
  • Property, Regeneration & Development
  • Prosecutions
  • Public Finance


DMH Stallard is ranked top in the South by Chambers and Partners 2010 for its Local Government practice and recognised as a leading provider across the UK

For more information on how to implement revenue-generating strategies or deliver shared services models, contact Jenny Thorp, Head of the Public Sector group at DMH Stallard, on 01293 605061 or by email at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .