Town Hall to pay consultants £2m to help ‘modernise’ council

Mayor Caroline Woodley. Photograph: Josef Steen. Free for use by partners of the Local Democracy Reporting Service

Hackney Council is set to pay millions to consultants over the next year as part of “ambitious” plans to modernise how it delivers services.

Last night (Thursday 10 April) Mayor of Hackney, Caroline Woodley, and corporate strategy director Kieran Read presented the borough’s scrutiny panel with the outline of a multi-year “corporate transformation project”, which is seeking to make the Town Hall more “flexible, collaborative and efficient”.

The plans, signed off by the cabinet last summer, include creating a ‘target operating model’ to help the council “meet challenges differently” and “deliver [on] priorities within the financial envelope available”.

Earlier in the meeting Mayor Woodley suggested this envelope has already been pushed to its limit by the spiralling demand for council services, and that the current approach of “salami-slicing” amenities was unsustainable in the long-term.

“If you look at the direction of travel in terms of meeting real people’s needs, we could spend all our money on adult social care, children’s social care and temporary accommodation,” she said.

The mayor added that so far, this pressure had forced the council to chip away at other services including libraries, Young Hackney, children and family hubs, because making savings from departments like social care would simply result in a greater overspend.

“This is the annual dilemma for this council”, she said.

In the council report, Hackney’s chief executive Dawn Carter-McDonald stated that the Town Hall needs to “push the boundaries of what local government can achieve”, and that this new approach will “create a sustainable workforce to deliver the best services we can for our residents”.

While the council has not yet specified what the changes will be, the project will focus on improving residents’ experience through better use of data and digital tools, more prevention and early intervention, and “embedding a high performance culture”.

It may involve reorganising some departments and integrating teams for a more “joined-up” resident experience.

Mr Read said that officers expect the plans to shave £21m off the local authority’s £52m budget gap between now and 2027/28.

The total savings target from the transformation is £42m, including £17m “already in delivery” from last year.

The “flexible use” of capital receipts i.e. the sale of council-owned assets like buildings or equipment, will help fund the programme.

But while expressing her support for plans to deliver better public services, committee chair, Cllr Margaret Gordon (Labour, Lea Bridge ward), raised concerns around the transformation’s “significant risks and start-up costs” – particularly £2m on consultancy fees for the current financial year alone.

“In such challenging financial times, we want to understand why that money needs to being invested rather than spent directly on residents’ services,” she said.

“[We want] to know if there’s a risk that we are going to come out of this process without improved services, and having spent considerable amounts of money on outside, relatively highly-paid consultants.”

Mr Read said the “urgent” nature of Hackney’s challenges meant that the alternative option – to scale up internal teams to deliver the transformation – was “not realistic”.

“We also believed there was value in working, in a managed way, with a consultancy partner [which has] done this work around the country, supported a range of authorities recently, [and] would bring that experience,” he said.

Business management firm Inner Circle Consulting will provide the council with external guidance during the first stage of the transformation.

The Town Hall will also recruit more consultants for the programme’s second phase, which will focus on both prevention and further cost-cutting.

Hackney Council has already priced in an extra £1m this year for transformation staff, and is currently recruiting to grow this team, and plans to spend £24.4m in total for 2025/26.

The council’s report sets out the transformation’s goals and vision, and includes to case studies where Hackney has seen success by changing its service delivery – such as the launch of Money hubs and streamlining support for businesses.

It also highlighted how it had sped up the process for disabled residents to obtain Blue Badges by cutting the average waiting time for application to be resolved from nearly six weeks to under two.

Yesterday’s meeting came the same day as Hackney Council announced it was reviewing all rejected disabled parking permits from 1 January 2024, after the local government watchdog found flaws in its assessment process had led to “injustice”.