The long-awaited Comprehensive Spending Review has at last been published, and from a local government perspective, there are few surprises.

The fact that this was going to be a tight settlement had been widely trailed for months, if not years.  Those of us with long memories recognise that while it is a less generous settlement than its immediate predecessors, it still provides for modest – 1% above-inflation – growth, which was not always the case in the 1970s, 1980s and early 1990s. 

So, curiously, in describing it as the worst settlement for a decade, Sir Simon Milton was giving a back-handed compliment to the Government. After the immediate political reactions have passed, the real challenge for local government will be how to maintain the momentum for improvement in a climate where mainstream financial resources will be constrained. There are various ways in which authorities can respond. In my view the worst-possible approach will be to try to adopt a ‘business as usual' response.

Dynamic organisations are always on the look-out for new, cost-effective ways of doing things, and this is all the more necessary in times of financial restraint. The scope for innovation and performance improvement is enormous, whether in specific service delivery, procurement, the organisation of back-office functions or the development of partnerships with other organisations. 

Exploring such options should not be a subject for occasional review, but should, rather, be a continuing expectation. Responsibility should not be just with the chief executive or senior management team.  Authorities need to be finding ways of motivating middle managers and frontline staff to question how they might improve the efficiency of the work they undertake on a day-to-day basis, and to explore alternative options to accepted custom and practice. 

This isn't just good management practice. It is essential in a financial climate in which measurable and deliverable efficiency savings will be expected as a matter of course from all public sector bodies. And if local government is to be ahead of the game, it will require real leadership in innovation at a local level.

I have, in the past, criticised local government for deferring too readily to central government, and being inclined to wait for explicit sanction from the centre before taking new initiatives. And now is certainly not the time for local authorities to be holding back. Quite apart from the opportunities already mentioned to improve efficiency, there are some very interesting new options emerging. The Lyons review recommended a Supplementary Business Rate (SBR), and this has now been fleshed out in the Comprehensive Spending Review. There are four key criteria.

The SBR must be for a specific scheme or development likely to enhance the local economy. It must not exceed 2p in the pound in terms of rateable value. It can only apply to businesses occupying property with a rateable value of more than £50,000. And it is subject to a ballot of affected businesses, unless the proceeds are less than one-third of the total project costs. 

For all this, the SBR provides a real opportunity for enterprising authorities to explore options for economic development with their larger local businesses.

A second opportunity comes with the abandonment of the ill-conceived Planning Gain Supplement and its replacement by a planning charge, based on a tariff system.  This will apply to all developments – above a minimal cut-off point – whether commercial or residential and is designed to generate funds for necessary infrastructure investment. 

Details are likely to be fleshed out over coming months as the Planning Reform Bill, which will introduce the scheme, goes through Parliament. Authorities can nevertheless begin now to explore how the new planning charge, together with the Section 106 powers which will continue in a modified form, can help support investment in local infrastructure. What is already clear is that those authorities best prepared to make the most of the new regime are likely to secure the greatest benefits.

Nick Raynsford is former local government minister