The price of austerity: reconceptualising value for money in English local authorities

Local authorities have been subject to significant cuts to their budgets, which in some cases have exceeded 60% (Local Government Association 2015), coupled with significant increases in demand and service expectations... [ view full abstract ]

Local authorities have been subject to significant cuts to their budgets, which in some cases have exceeded 60% (Local Government Association 2015), coupled with significant increases in demand and service expectations (Lowndes, McCaughie 2013). At the same time, external financial and performance inspection regimes have been removed and the Audit Commission, the primary body responsible for reviewing authorities’ use of resources, has been disbanded - perhaps for ideological purposes (Walker 2011); the result, however, is that the impact of austerity is extremely difficult to ascertain.

As authorities are driven to examine their fundamental purpose, manage a targeted decline in their performance, and consider whether or not they can meet their statutory duties to their communities, ‘value for money’ (VFM) as a concept becomes increasingly problematic. Simple notions of economy, efficiency and effectiveness are insufficient in helping authorities navigate the impact of budget cuts. Previous work (Moore 1995, Stoker 2006) has emphasised the significance of equity as a missing component in public service delivery, and public service values (Denhardt, Denhardt 2003) are also an important concern that is often overlooked in financial management considerations.

The deregulation of statutory assessment mechanisms presents barriers to effective comparisons, and empirical evidence has observed the fragmentation of local performance systems, which is encouraging divergent and alternative performance management interfaces that themselves are more open to the subjective nature of performance (Moynihan 2008, Moynihan 2013).

Arising from empirical qualitative research in six English case study local authorities, this exploration of value for money addresses critical perspectives beyond traditional notions of value for money, and considers how we might need to understand VFM differently in a public sector facing an existential crisis.