The latest Independent Revenues and Benefits Monday Discussion Group began with what looked, on the face of it, like a discussion about one council in financial difficulty. It quickly became something much wider.
Using the recent Best Value inspection of Bedford Borough Council as the starting point, the group moved through local government finance, political leadership, Council Tax Reduction, debt recovery, staffing, quality assurance and the relationship between Whitehall and councils.
The common thread was deceptively simple: when money is tight, cutting expenditure is easy to describe but much harder to do intelligently.
And, as several speakers argued, some savings are not savings at all.
Bedford: funding failure, political failure or management failure?
Malcolm Gardner opened the substantive discussion by setting out the scale of Bedford’s position. The council had received around £45 million of Exceptional Financial Support across 2025/26 and 2026/27 but was still facing a much larger financial gap. He stressed that EFS should not be confused with a government grant: ultimately, it has to be financed through capital receipts or borrowing.
For Malcolm, that made EFS less a rescue package than a form of financial restructuring: something capable of keeping a council afloat, but not of solving the underlying problem. He pointed in particular to planned staffing reductions of around £4.2 million and the inspectors’ concern that there was limited evidence of the strategy, risk assessment or service-impact analysis sitting behind those reductions.
That led to his opening challenge: was Bedford experiencing a broken local government funding model, poor political choices, weak management, or some mixture of all three?
Julie Smethurst’s answer was that it was almost certainly all three.
She argued that there was little doubt that the wider funding model was broken, but that political decisions could also be problematic because they were not always made for the most effective reasons. Equally, where an organisation was failing to understand strategy, risk and service impact, weak management and weak insight had to be part of the explanation.
Julie also stressed that senior officers needed to be capable of challenging political leadership. In a difficult authority, she suggested, management cannot simply administer decisions: it has to provide effective professional challenge.
Bob Wagstaff focused on Bedford’s political structure. The combination of an elected mayor, minority administrations and a cabinet representing only a minority of councillors struck him as inherently difficult. In authorities with no overall control, he had more commonly seen coalition arrangements which allowed an administration to build sufficient support to govern.
A minority cabinet without that support, he argued, risked becoming effectively powerless.
More troublingly, Bob picked up the inspectors’ concerns about relationships between senior statutory officers. If the chief executive, Section 151 officer and monitoring officer were not working strategically together, the consequences would inevitably flow down through the organisation.
His description of the effect on staff was vivid. Rather than simply Malcolm’s “bucking bronco”, Bob pictured a skipping rope with one end released, whipping around while employees desperately tried to hang on. In those circumstances, he said, an inability to take political decisions could become almost self-fulfilling.
Where does officer responsibility end?
The conversation then turned to one of the perennial questions of local government: what should officers do when members reject a saving but provide no alternative?
Malcolm highlighted the report’s description of decisions which stalled, were rejected or were subsequently reversed. Council Tax Reduction was one of the examples discussed. The underlying governance problem was obvious: if members reject a saving, who owns the responsibility for finding the replacement?
Paul Howarth drew a clear constitutional line.
Officers, he said, should push hard. They should give clear professional advice, explain the consequences and warn members where necessary. But ultimately elected councillors have to own political decisions.
He compared the position with the relationship between civil servants and ministers. Once officers have given their advice clearly and forcefully, there is a limit to what they can do. The final decision belongs to those who were elected to make it.
Naomi Armstrong agreed but placed a particular obligation on Revenues and Benefits managers.
Their job, she argued, is to make the consequences impossible to misunderstand. If members choose option A, they need to know what follows. If they reject it, they need to understand option B.
That means good reports, good modelling and support from the Section 151 officer and chief executive. Revenues and Benefits managers are close enough to the detail to understand how policy choices work at household level; senior finance officers understand the corporate financial position. Both perspectives are required.
Council Tax Reduction: a saving, or simply moving the cost?
That question became particularly acute when the group considered Council Tax Reduction.
Malcolm framed the central tension neatly. A council can benchmark its scheme, simplify administration and consider whether its design still reflects corporate priorities. But reducing entitlement does not automatically create an equivalent saving.
Some of the supposed saving can reappear as council tax arrears, additional collection activity, hardship support, recovery costs and pressure elsewhere in the council. Any calculation therefore has to look beyond the headline reduction in CTR expenditure.
Naomi argued strongly for looking at the whole system.
If a vulnerable household owes both rent and council tax to the same authority, squeezing another few pounds a week from that household does not necessarily improve the council’s overall finances. One service may collect the money while another loses it. Or neither may collect it.
“You could end up… both teams trying to squeeze an extra £7.50 a week,” she observed. “One of you might get it, but neither of you might get it.”
Malcolm suggested this illustrated the weakness of traditional “salami slicing”. When budgets are considered service by service, different parts of the same council can end up competing with each other rather than pursuing the best overall outcome.
Kirsty Brooksmith was more categorical. Without knowing Bedford’s scheme in sufficient detail to prescribe a particular design, she said her instinct would be to protect a generous CTR scheme.
Her experience at Hammersmith & Fulham was that reducing support simply created additional collection problems and pressures elsewhere, particularly where the council also held housing stock. She would, she said, “always fight for a generous scheme”.
Sean O’Sullivan reached much the same conclusion from a collection perspective: reducing CTR can simply increase arrears. There is a point beyond which collection effort cannot overcome a household’s inability to pay. As he put it, councils “can’t get blood out of a stone”.
Bob Wagstaff added another dimension. Before officers can design a CTR scheme, members need some idea of what they want it to achieve. Should it be more generous or less generous? Should particular groups be protected? Is the objective primarily financial, social or administrative?
Without that strategic political direction, he argued, officers are being asked to design policy in a vacuum.
Sean qualified that slightly. CTR will inevitably be officer-designed to a significant degree because it is technically complex and legally constrained. Elected members may set the policy intent, but practitioners still have to turn that intent into a lawful and workable benefit scheme.
Julie then provided a practical example from Tameside. Despite difficult budget circumstances, the authority was considering increasing support because arrears and collection costs had been rising. Having previously reduced support to 75% of a Band A liability, Tameside was looking at moving towards at least the 80% level offered by its nearest comparator authorities.
It was a useful counterpoint to the assumption that financial pressure must inevitably mean reducing welfare support. Sometimes spending more in one place may reduce cost and improve collection elsewhere.
Put a real household behind the spreadsheet
Naomi returned repeatedly to the importance of modelling real-world consequences.
It was not sufficient, she argued, to show members that a particular CTR change saved a certain amount. Officers should identify which households would be affected, where they lived and how much more they would actually be expected to pay.
Her test was deliberately human: imagine explaining the policy to a Universal Credit claimant with two children and asking her to find another £5 a week.
Sean pointed out that even this formulation understates the cash-flow problem. Council tax is not normally collected weekly. A £5 weekly contribution can become a demand for more than £20 in a monthly household budget.
Naomi’s conclusion was that Revenues and Benefits managers have a duty to do the legwork and spell out those consequences before a decision is made.
Debt: stop pretending uncollectable money is still collectible
The debate then moved from support to collection.
Peter Haywood questioned the way councils and government talk about council tax arrears. Too much attention, he argued, is given to the in-year collection percentage while uncollectable historic debt accumulates year after year.
If authorities collect around 97.5% or 98% of liability in the long run but write off only around 1%, then mathematically the stock of reported arrears will continue to rise.
Those growing arrears can then be presented as evidence of deteriorating council performance, even when some of the debt is simply no longer realistically recoverable.
Peter recalled a more disciplined approach in which write-offs were considered annually with the Section 151 officer, executive member and shadow executive member. Bankruptcies, deceased cases and genuinely uncollectable balances were cleared rather than being left indefinitely on the ledger.
There was an operational reason as well as an accounting one. Old accounts repeatedly reappear on reports. Recovery staff then spend time rediscovering why a ten-year-old debt cannot be collected before moving on to something productive. Months later, somebody else repeats the exercise.
That, Peter argued, is simply inefficient.
Kirsty agreed, saying her authority operated an annual write-off process partly to ensure the bad-debt provision remained realistic.
But she was much less enthusiastic about outsourcing recovery. Previous experience had been expensive and unsuccessful. Instead, Hammersmith & Fulham was looking again at specialist internal recovery capacity.
She also offered a warning about the language of “ethical debt”. An earlier reluctance to use enforcement agents had, in her view, altered payment behaviour because some residents realised escalation was unlikely. The authority was now having to rebuild its collection culture.
At the same time, the response was not simply tougher enforcement. Kirsty described a specialist arrears approach in which residents could enter affordable arrangements and, if they maintained payments, receive additional help from a dedicated support fund.
It was enforcement and support rather than enforcement or support.
“Smart cuts” and “dumb cuts”
This led to perhaps the strongest area of agreement across the group.
Sean criticised the tendency to make staffing reductions by looking at headcount rather than function. Cutting one of two collection officers because a budget needs to lose a post may technically achieve a staffing saving while simultaneously reducing the authority’s ability to collect several times that amount in income.
In previous redundancy programmes, he suggested, councils had too often removed “the doers” simply because their posts appeared as a cost.
Malcolm described the distinction as smart cuts versus dumb cuts.
Blanket vacancy freezes, percentage headcount reductions, weakening billing and recovery capacity, removing complex-case expertise, cutting training or quality assurance and forcing everyone through digital channels without retaining human support were all examples of cuts capable of generating larger costs later.
Buying technology before redesigning the underlying process was another.
So was claiming a saving before proving that it was genuinely deliverable and cashable.
Sean offered housing benefit subsidy as an extreme example of false economy. Councils have lost very significant sums because errors were extrapolated through subsidy audit. Yet the quality assurance resource that might have prevented those errors could be comparatively inexpensive.
The organisational problem is that the saving and the subsequent loss can sit in different budgets. A service manager may therefore successfully “save” the cost of a quality officer while the council as a whole later loses far more money to DWP.
In the local budget, the saving exists. In the real world, the organisation is poorer.
Naomi argued that the answer was not necessarily an expensive blanket QA regime either. Intelligent quality assurance should be targeted: exception reports, higher-risk areas, good training and getting decisions right at the earliest possible stage rather than manually checking everything.
And how much of this is Whitehall’s fault?
Towards the end of the session Malcolm widened the lens.
Bedford had plainly made mistakes, he argued, but it was difficult to discuss financial failure in local government without acknowledging the environment in which councils had operated: substantial reductions in funding, the localisation of Council Tax Support alongside reduced funding, council tax referendum constraints, increasing demand and complexity, and repeated short-term funding settlements.
Bedford could therefore be responsible for its own decisions while still operating within a national system that made failure more likely.
Paul Howarth agreed.
The first issue, he said, was simply money. Local government funding had reduced substantially, although councils had entered that period with different levels of reserves and resilience.
The second issue was more cultural: a persistent strand of Whitehall thinking that local authorities could not entirely be trusted.
That could produce punitive controls and an unhealthy central-local relationship. Paul was careful not to portray that attitude as universal, having seen people in central government who genuinely wanted to work constructively with councils. But the underlying mistrust was, in his experience, real.
Malcolm added that the failures of one authority are much more likely to become the public image of local government than the quiet success of dozens of well-run councils.
What would the panel actually protect?
The session ended the Bedford discussion by asking participants what they would protect, change or measure themselves.
Bob Wagstaff questioned the obsession with the in-year collection percentage. His preferred metric would be much simpler: how much of the council tax requirement did the authority actually collect in cash?
If an authority needs £15 million, does it really matter whether £13.5 million came from the current year and £1.5 million from arrears, or does the organisation primarily need to know that £15 million arrived?
Kirsty immediately agreed, before choosing “transform before cutting posts” as her own priority. Her authority, she said, had experienced plenty of cutting without sufficient transformation, “and it shows”.
Sean supported the cash metric too, although he warned that politics can make even sensible performance measures difficult. He recalled using a similar approach at Brentwood: actual cash collection increased while the traditional percentage indicator fell, producing a political backlash and a return to the old measure.
Julie also backed the cash measure.
Her investment priority, however, was people: specialist staff capable of having difficult conversations with residents and resolving debt. “You can’t collect debt without having bums on seats and actually talking to people,” she argued.
Asked where she would cut, she struggled to identify anything. Her concern was that many services had already been reduced to the point where there was very little left that could disappear without consequences.
That may ultimately have been the most important conclusion of the discussion.
The argument was not that local government should never cut expenditure, nor that every existing service or post must be preserved. It was that mature financial management requires councils to distinguish between cost and value, between a budget saving and a real saving, and between activity that can disappear safely and capability whose loss will simply create a bigger bill somewhere else.
A collection officer is a cost until nobody collects the money.
A quality officer is overhead until an error is extrapolated into a major subsidy loss.
Council Tax Reduction is expenditure until cutting it produces arrears, recovery costs, hardship and demand elsewhere.
And transformation costs money until the alternative is continuing to cut a service that was never redesigned.
A final warning from case law
The last few minutes moved from Bedford to a recent Upper Tribunal case involving temporary absence overseas and benefit entitlement.
Malcolm’s practical message was less about the individual case than about professional capability. The First-tier Tribunal had supported the original decision, but the Upper Tribunal subsequently overturned it. The issues discussed included the possibility of entitlement reviving, whether an award should simply terminate and the treatment of the four-week absence rule.
For Malcolm, the operational lesson was that decision-makers need to examine the whole period and every material change rather than following an overly simplistic decision path. He linked that directly back to the earlier discussion about cuts: technically experienced staff can prevent defective decisions from travelling all the way through appeal and tribunal proceedings.
And that brought the conversation neatly back to where it had begun.
When councils face financial pressure, the temptation is to ask: what can we cut?
The better question may be:
What capability can we afford to lose without spending even more money dealing with the consequences?
The Recording can be found here