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Councils merge services to cut costs

John Hess|10:59 UK time, Friday, 3 September 2010

Scissor cuts

The government's drive to cut the deficit is producing some strange bedfellows.

Eyebrows have been raised by the move by a Conservative-run shire county to cut a ground-breaking deal with a Labour controlled city council. Tory Leicestershire and Labour Nottingham are to merge their computer and personnel departments.

It's part of new thinking being forced on cash-strapped councils. Leicestershire County Council is the latest to consider making further big cuts to spending... with the inevitable impact on local jobs and services.

A financial report going to county councillors talks in stark terms of
"unprecedented cuts" that will have a "profound impact". The government's 25% cuts target now means Leicestershire having to find an extra £14m to £20m. On top of earlier cuts of £66m, that brings the cuts total to £86m over four years.

Hence the new thinking for councils to consider merging support services. The Conservative Leader of Leicestershire, David Parsons, is a leading advocate of councils and public sector organisations sharing buildings and staff. In the local government world, the concept is called "Total Place".

"We are already a long way down the road in co-operation with Nottingham City Council," he told me.

"There are other East Midland councils that we have got to be co-operative with in order to drive down costs. It is so important to keep the council tax down."

The planned merger of IT and HR by Nottingham City and Leicestershire County Councils will initially save £2m a year. They will also share the loss of 70 jobs.

But there's scepticism that the merger is really worth it. The Tories may be in coalition with the Lib Dems in government, but not in Leicestershire: the Liberal Democrats - led by Simon Galton - are the main opposition group.

"Actually, we are all in favour of this merger. But in the end it won't deliver the cuts required. It just won't be enough," he told me.

In front of Leicestershire's County Hall, there are four fountains. One of them is not working. That could be a metaphor for the 25% cuts facing this council and others across the East Midlands .

Leicestershire's fountains are eye-catching, but it may be its ambitions to share services and staff with other councils that cause a real splash.

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