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Further redundancies are 'inevitable' as local councils struggle to cut staff costs, according to LGA and Audit Commission

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Councils are finding many ways to cut the pay bill without losing jobs, but further redundancies are inevitable given the sheer scale of budget cuts that councils have been hit with.

But further job losses are unavoidable as part of a cost-cutting mix likely to include organisational change, sharing services and outsourcing. Many councils are also reducing the numbers of higher paid staff, including managers.

A report published this week by the Local Government Association and the Audit Commission highlights what councils are doing to tackle workforce issues in the current climate of austerity measures being faced by the public sector.

The challenges facing local government in this area are protecting jobs and reducing their pay bill while at the same time continuing to deliver excellent services.

The sector has managed to do this despite bearing the brunt of the recent cuts which has seen Government funding to councils being shrunk by more than a quarter over the period covered by the current Comprehensive Spending Review.

One of the key findings of the report is that while According to the report, councils are trying hard to avoid redundancies and reduce their salary costs by implementing alternative measures including reducing their spend on agency workers and consultants; cutting overtime, bonuses and out-of-hours payments; freezing recruitment to unfilled posts; and extending part-time working.

But in 2011, 90% of councils reported to the Audit Commission that they have reduced the costs of higher paid staff by employing fewer or paying them less.

Merrick Cockell, chairman of the LGA, said: "Local government is the most efficient and trusted part of the public sector. Every day, local authorities deliver vital services that people rely on and they do the best job they can within their means. Unfortunately, in the current climate, councils have had to take some tough decisions in order to bring their workforce costs down, continue to provide essential services and minimise job losses. This is part and parcel of sound and responsible financial management.

"Funding cuts have meant workforce costs must come down. Councils have been ahead of the game in making savings and have already started to reduce workforce costs. Unfortunately, job losses are inevitable given the scale of cuts. Where these are necessary, councils are working hard to minimise disruption to staff and services through restructuring, shared services and outsourcing. They are also looking at how they invest in and reward people to ensure they continue to deliver the most efficient public services possible."

Audit Commission chairman Michael O'Higgins added: "Each council must find its own way of cutting costs tailored to local needs, local circumstances and its own workforce. Councils are often the largest employer in their area, so downsizing can affect the local economy. Local government is a people business, with staff costs accounting for almost half the money spent by councils, so they need to be aware of all their options and the tools at their disposal. This report gives case studies and comparisons, while remaining focused on service quality. That is why it is so valuable."

One of the innovative measures taken by local authorities includes sharing services across councils. A recent investigation by the LGA found that shared services, such as recycling and waste, IT and procurement are delivering savings of £156.5 million to the taxpayer.