One thing’s for sure, 2023 didn’t disappoint on the bad news front: from local councils going “bankrupt” to an unprecedented number of strikes across the public sector in the 21st century so far. Add to this to the perennial concoction of funding pressures, increasing demand for services and political turbulence, can 2024 really be any different?
In short, the answer is both yes, but mostly no. The root of answering this question goes partly back to the Chancellor’s 23 Autumn Statement. For whoever wins the next election (and more on that later), the squeeze on public services starts precisely then. The upshot of all this means that beyond 2025 it is very likely that there will be cuts in some protected services such as local government and prisons. The incoming funding squeeze is no short term dose of fiscal medicine, either. The Office for Budget Responsibility estimates that the real value of Government Departmental budgets will have eroded by £19b by 2027/2028. Indeed, in the Autumn Statement, itself, the Chancellor specifically extended the spending squeeze until 2028/29.
Anyone working in local government feels right at the sharp end of things at the moment. For 20 years not one local authority in England issued a Section 114 notice (effectively declaring itself to be essentially bankrupt). Fast forward to 2018 and they have become a familiar and high profile occurrence – from Croydon to Birmingham. What’s more, the Local Government Association recently pointed out that one in five local authority Leaders or Chief Executives think it’s “very” or “fairly” likely that their council will issue a Section 114 Notice in 2024/2025. Those wishing for a return of the Audit Commission no longer sound like nostalgic types. Some root and branch reform of local government financing is surely needed in the next term of any incoming Government.
Similarly, for those in the Third Sector the ongoing pressures of funding and increasing demand will continue to bite. The Third Sector plays an ever more important role in the social and economic fabric of the UK, but much of its funding is short term and prone to political whims. The pressure to merge and in some cases close will be up front and personal for many in the Third Sector this year.
It is a similar story across health and social care. The challenges of limited preventative health care, late diagnosis, varying degrees of management of long-term conditions and long waits for emergency and elective care are all well documented in the UK’s media. In social care, a report by the Association of Directors of Adult Social Services found that a record 470,000 people were waiting for care, a direct payment or for their needs to be assessed. In housing, the acute challenges of a rising population alongside out of reach (for many) property prices have been a ‘pressure cooker’ issue for decades. Add that now to prohibitive rental prices and no long-term solution to tackling homelessness (we are yet to see a Rough Sleepers Initiative [RSI]) and we surely have another case for wholesale reform and, dare we say it, some radical thinking.
More generally, the public sector will be more and more concerned with how AI might be used to communicate with and support service users and customers. In terms of diversity, organisations will need to ensure that their well thought through people and talent strategies are not undermined by tokenistic or performative approaches to ensuring genuine inclusion. The increasing advancements in analytics should certainly help public sector bodies move forward in their drive for diversity, accessibility and inclusion. Given last year has now been named officially the hottest on record, net zero ambitions will come to the fore with all sectors pressed on how they achieve decarbonisation whilst at the same time ensuring financial viability.
So what change will 2024 actually bring? One thing is now certain is that it is going to be a year of elections – for councils, London’s mayor, nine other combined authorities and, according to virtually everyone including the current Prime Minister, a General Election. Despite the common view in the media that a Labour landslide is likely, Labour needs a swing of 12.7% just to have a majority of seats which is far more than that achieved by Tony Blair in 1997 (10.2%) with his record landslide. It’s a tougher ask than we think. We may be looking at a 1964 election outcome here (when Labour narrowly beat the Conservatives) and thus we may see another election in 2025 or soon after. Whatever the outcome, we can be sure of more uncertainty in 2024.
Managing Director & Founder