Local authorities could be saving up to £10bn in the next five years if technology is used in a “smart way”, a new think tank report has said.
A technology-led reform of the local government could prevent councils from losing money by creating apps that let households pay for services like council tax, sharing data between local authorities and employing less costly IT firms, according to Policy Exchange.
Eddie Copeland, author of the report, said: "While there are examples of innovative councils that have used technology and data to deliver better, more efficient public services, many local authorities have failed to reform.”
Figures from the Local Government Association (LGA) showed that councils faced a £12.4bn funding gap by 2020, while accounting for 80 per cent of local public services.
The report said that councils lost more than £1.3bn every year by failing to identify fraud including council tax, benefit fraud and illegal subletting. It recommended using data from multiple sources to identify patterns and prevent future violations from happening.
Merging one or more services between councils, it suggested, could be more cost-effective. For example, if one council spends £5m every year to investigate food safety violations, the neighbouring council could hire its services rather than hiring bespoke companies.
“Can-do councils are already delivering multibillion-pound savings through embracing the digital age and the efficiencies this new dawn offers to them,” said Kris Hopkins, Local Government Minister.
“But as this report shows they can go much further and town halls should now be tapping into these new opportunities to make the necessary savings to protect frontline services and keep council tax down for hardworking families,” he added.
The report also argued that a choice between having either localism or centralisation was a "false choice".
“The sector’s fragmentation is also the single greatest barrier to achieving technology-enabled reform. That is because technology delivers value through being scaled; local government keeps it small-scale” the report said.