I have got to say that I was as surprised as anyone at the announcement of the closing down of the Audit Commission at the weekend. Don’t get me wrong, the Government in general and Communities Minister Eric Pickles in particular had made no secret of their dislike for the organisation and I did expect its role to be slimmed down considerably in coming months.

APSE as an organisation has had a well defined and consistent policy on audit and inspection over the past decade or so. We recognise the need for openness and transparency in the delivery of public services and therefore believe that you need an independent audit body to regulate the sector, which has the power to intervene when things go wrong. However, by definition a world class audit and inspection service should work itself out of a job – or at least to an optimum minimum level. Perhaps this is the cycle that the Commission has gone through.

Set up by a Conservative Government in the 1980’s, the organisations role expanded significantly under the Labour Government post 1997, as the inspector of Best Value, CPA and CAA. Local authority performance improved dramatically against the measures created by these frameworks. It could therefore be argued that its role had been fulfilled and that maybe a more minimalist role was appropriate for the future. But I have worries over its complete eradication.

It should be interesting to see what replaces the Commission as it is clear that the need for some of its functions remains. Whilst the role of independent financial audit is vital, this will probably be picked up by the large accountancy practices and they will need to keep their consultancy interests clearly separated from this role. The need to assess local performance levels and compare with others for the purposes of improvement and performance management will also remain necessary. The quality sectoral research the Commission produced and its value for money studies were also held in high regard in local government.

As an organisation that has local government’s largest benchmarking system, APSE’s Performance Networks, maybe I should be more excited about the opportunities the Commission’s demise creates for others. But I can’t help feeling that we are losing something that brought value to the sector over a lengthy period of time and helped instil a culture of performance awareness that wasn’t as prevalent in the past.

When Chancellor George Osborne delivered his budget to the House of Commons he openly stated that it was the beginning of an attempt to fundamentally rebalance the shape of the UK economy by reducing the role of the public sector in order to stimulate private endeavour. He then went on to outline a series of measures that the Institute for Fiscal Studies described as the most severe and sustained cuts to public services since the Second World War.

The headlines for local government are of course the 25% spending cuts over the next four years, the two year pay freeze for staff on more than £21,000 a year and the council tax freeze – not to mention the upcoming review of public sector pensions.

Speaking at one of APSE’s conferences in Wales two days later, I had to hand out the anti-depressants after outlining these measures.

In attempting to address the sins of the bankers, the coalition Government’s decision to pursue the rule of 80% spending cuts to 20% higher taxes has left many in local government feeling that we are not ‘all in this together’.

The level of cuts are going to bite deeply and unevenly. Even the Chancellor recognised in his budget that local economies with the highest dependency on the public sector will suffer most as a result of his measures. I suspect that this means severe consequences for Wales, Scotland, Northern Ireland, the North East, North West and parts of the Midlands. The protection of health service budgets, which received record levels of ring-fenced funding over the last decade, also adds to the disproportionate impact of the cuts on local government.

It is understandable that some local authorities might be panicked into quick action. But now more than ever is a time for cool heads and proper assessment of the alternatives ­ rather than cutting services dramatically, pursuing untested measures in an attempt to appear innovative, or confusing cheapness with good value.

It makes more sense for councils to assess where service performance is at present, identify future needs and look at the prospects for achieving this through improving existing services in the first instance. While this may lead to more fundamental decisions on future provision in some cases, it at least leaves councils in control of their own destiny while working out calmly what steps to take next.

Local government has always been the glue that has held local communities together. Slash and burn policies today are likely to prove counterproductive in the long term by significantly eroding the very local economies that we are supposed to lead and support.

The Coalition government is formed; the ministerial team are in place and the age old political strategy of blaming the previous incumbents for the finances being worse than initially thought ‘now we have actually seen the books’, has been deployed. So what does this mean for local government? Sadly, budget cuts on a major scale.

This is not something we haven’t anticipated. But the full scale and extent should emerge following new Chancellor George Osborne’s emergency budget on 22 June. Expert estimates vary between 15% and 30% and the fear for those involved on the frontline of local government is that this may fall disproportionately on them due to other areas such as health and education being given ‘protected’ status. There is a touch of irony here as the ‘unprotected’ services did not see the full benefit of the record levels of investment of the last decade due to ringfencing of funding to the areas which are now ‘protected’.

One ‘big society’ experiment appears to be to use many more volunteers, charities and social enterprises to provide services. While there is undoubtedly a valuable role for the third sector in enhancing services, in my view, this should be in partnership with local authorities, not as a replacement for core services – and it certainly should not be regarded as a way of merely cutting costs.

Our first concern is that many people are heavily depend on frontline local government services to achieve a basic quality of living and therefore risks cannot be taken with ideas that have not been fully piloted. Secondly, the level of complexity and technical expertise required to care for elderly people, maintain our highways infrastructure and look after the local environment is often greatly underestimated. Thirdly, where is the tangible evidence to show that this type of approach will actually save money? And finally where is the army of volunteers who can afford the time to replace a skilled and trained local government workforce?

There are numerous ideas being debated at present on how to make budgets balance as funding reduces. APSE remains to be convinced that this one is likely to meet the immediate need. The idea of more public involvement in the delivery of services is laudable and social enterprises can be an important way of achieving this. But will take time – and resources - to develop. It needs to be tested out fully and will require facilitation if it is to flourish.

In the meantime, core frontline services will continue to improve by reducing waste, streamlining processes and utilising new technological developments. This is the only guaranteed way to improve productivity, reduce costs and close funding gaps whilst fulfilling local government’s obligation to meet public need.

With many other articles focusing negatively on the financial challenges local government faces after the General Election, I believe it’s important to also look to where opportunities may arise for the sector.

Having visited Cornwall recently and seen at first hand the plans contained within the ‘Greening Cornwall’ programme, I was heartened to see how leadership from local government can be the critical success factor to stimulating the low-carbon and green industry as the country emerges from the economic downturn.

The potential local economic benefit is huge and the reality of this is that local authorities can keep most of the financial, environmental and employment spin-offs for themselves if they have confidence in their own capability ­ rather than handing over all of this to third parties.

This is one of the best ‘invest to save’ opportunities I have ever seen with councils building environmental infrastructure to achieve an immediate payback by selling surplus energy raised to the grid. It not only allows them to create local employment or redeploy existing staff but gives them the carbon benefit to meet their reduction commitments and avoid fines.

Technologies such as solar, wind, tidal and geothermal are well established now and there is very little risk. Southampton has had a district heating network for over 20 years that has reduced carbon emissions by over 100,000 tonnes during that period. The public may be sceptical about wind turbine farms but there is a strong case to be argued – especially if the economic benefit is being kept local.

Many authorities are experimenting with electric fleets and outdated arguments about longevity of battery power or areas being too hilly have long since diminished as advances have been made. Not only is new council housing being built to enhanced environmental standards but retro fitting of existing stock and public buildings will also be required to improve energy efficiency.

APSE’s latest briefing calls for skills for green industries to be developed as a local and national priority. Local businesses that invest in renewable technology and advanced green manufacturing by providing wind turbines and solar panels are likely to have a very profitable future, especially as much of this is imported at present. Councils can incentivise this by ensuring they imbed community benefit clauses stimulating demand for low-carbon materials in their procurement practices.

Local government may face some tough times over the coming years, but those who have the vision to get ahead of the game by embracing this agenda may be able to offset reductions in some traditional service areas by making advancements in this brave new world.

I could probably have written pages about what APSE wants from an incoming Government, however today someone asked me to do so in 100 words and I gave the following comment:

Whilst it is inevitable that public sector spending will be reduced over the next three to four years, APSE is calling for this to be made possible through managed transformation - not a financial Armageddon.

We would like to see a recognition of the excellent value that local government services provide to local communities and economies and, from this starting point, an acceptance that improvement and efficiencies can be achieved but will take time to deliver.

Priority areas that require urgent investment are up-skilling public sector workers to realise the huge economic opportunities that exist in meeting environmental challenges the country faces and building a new generation of council housing to meet a huge social need.

Spoke today at the Defend Council Housing conference London, ‘A manifesto for council housing.’ My talk was promoting two pieces of research APSE have recently completed the first a joint publication with ARCH, on the holistic benefits of retained council housing, ‘Under one roof'; and the second about the work UNISON commissioned from APSE on ‘A new generation of council housing'.

The session also included contributions from Shelter and the lead member for Housing on Reading Council. A really interesting debate took place with the large audience and general agreement emerged that the prominence of retained council housing as an option has grown and that there is a huge need for councils to be funded properly to build a large number of houses once again.

Spoke today at the City and Financial seminar in London on the topic of ‘Grasping the scale of the medium to long term challenge facing local government.’

Basically my role was to set the context on the scale of the financial cuts facing public services and examine how cuts of up to, and beyond 15% can, be achieved.

Some of the proposals being put forward include shared management structures, a complete 3 year spending freeze on capital and revenue funding, structural reform through reorganisation, the CBI are obviously promoting outsourcing, the total place approach, shared services generally, increasing charging beyond the £11b per annum that local government gathers at present and my own preferred approach of lean or systems thinking combined with good local performance management systems.

It was a good debate and most local authorities will examine what is correct for their own specific local circumstances.

APSE’s annual Highways and Street Lighting seminar took place over the last couple of days at Newcastle Marriot. The seminar incorporated ‘The Great Salt Debate’ which was a chance to look back at the problems with winter gritting this year from all perspectives. A debate between local authorities, grit suppliers and national agencies teased out some of the main issues that hindered services this winter and hopefully lessons have been learned that can be acted upon in order to avoid a repeat in future winters.

Being in the North East of England gave me a chance to catch up with colleagues in the school meals sector in that area. Colin Ranson from Sunderland Council and Anita Brown from Stockton brought me up to date with the latest issues around uptake and cost pressures.

Reading press reports about Kathryn Bigelow’s film ‘The Hurt Locker’ scooping six Oscars at the 82^nd Academy Awards ceremony set me wondering what the term actually means. A quick check on Google gave me the following definition ‘a period of immense, inescapable physical or emotional pain’. What an appropriate analogy then for the next few years in local government.

With Treasury figures suggesting public expenditure is likely to represent a 49% share of gross domestic product by the end of 2010, whoever wins the general election will be faced with some dramatic choices on public finances - ironically in order to help claw back the £176b deficit created by bankers.

Depending on who you listen to, this could mean cuts to local government budgets of up to 30%. But for arguments sake let’s say 15%. How are we going to achieve this? Well again it depends on who you listen to.

The CBI would suggest the answer is in outsourcing more services. Although having sat on the Government’s Strategic Partnership Taskforce for two years, reviewed Deloitte’s 2005 report on why so many American ‘Blue Chip’ companies were insourcing after outsourcing firms failure to deliver their promises and seen compelling evidence in APSE’s own research on why over 50 local authorities had brought services back in-house, I have yet to see tangible evidence to support this strategy.

Some are looking at arm’s length companies, shared services and joint working and certainly the evidence from the ‘Total Place’ pilots suggests 15% savings could be achieved by this approach. I would, however, like to see more detailed evaluation of the findings completed prior to any roll-out en masse.

Others argue that systems and lean thinking are the route to transforming services. This has some merit. But it has to be placed in the context of the need for openness and transparency in local government and therefore has to be evidence-based through robust local performance management frameworks. It has to be part of a wider on-going improvement framework led by elected members, such as that outlined in APSE’s ‘competitiveness continuum’ model.

Local government is also likely to raise more in future through trading and charging than the £11b reported at present in the Audit Commission’s ‘Positively Charged’.

The Government-appointed ‘Frontline First Taskforce’ has called for a combination of most of these approaches and ultimately local politicians will look at their local context and make policy decisions of where to make savings to suit their own local circumstances.

Bringing this back to the ‘Hurt Locker’, the parallels with a story about an explosive ordnance disposal unit are not lost on me.

APSE launched its latest research publication ‘Getting more Bang for the Public Buck, a guide to using procurement to achieve community benefits,’ at the Conservative Councillors Association conference in London today.

The guide looks at how you can maximise the benefit to local economies through the expenditure you make as an authority. Earlier research APSE published on measuring the economic footprint made by a local authority’s spend showed that for every £1 they spent on local services £1.64 circulates in the local economy. This research measured things like employee expenditure, money spent with local sub-contractors and local suppliers.

What ‘Getting more bang for the public buck’ shows is that if a concentrated effort is made to ensure the maximum amount possible of this expenditure is made with local companies then this figure can rise to £2 and beyond.