George Osborne has already warned us that 2014 is going to be the ‘year of hard truths' and to expect further cuts over the next four years in order to support the economic recovery. 

With that in mind, innovation in local authority political and managerial leadership is now vital to sustain improvement and ensure councils are fit for whatever the future may bring.

With budgets being hammered and residents' demands ever increasing, cost cutting, efficiency savings and general shared services, whilst vital, are no longer enough for some local authorities to survive. Income generation is now a real possibility and services with a more customer focus are being rolled out.

At the Improvement and Efficiency Social Enterprise (iESE) we are seeing a number of councils adopting a pragmatic approach to thinking way beyond immediate delivery to a cultural shift that the sector has not experienced before. 

Helping them to ensure they are equipped to respond to the significant scale of the challenges ahead and develop a variety of effective models, it is clear that there are many groundbreaking ideas emerging along with the desire to share and learn from each other ever growing. 

Recognising the need to draw on such support, our owner councils requested the creation of the iESE Innovation Club.

A new generation of sector-led improvement hub, the club provides the ideal opportunity for those at the cutting edge of change to join together, share radical thinking and innovative solutions that are driving the fast pace of transformation required.

It provides the ideal gateway for political and managerial leaders to meet periodically to review the changing models of leadership within the public sector, discuss strategic priority setting and strengthen joint working. 

Industry leaders from other sectors are also invited to share innovations emerging elsewhere that could be applied to local public services.

The Club's annual programme of innovation and leadership exchanges provides a platform for members to get together and focus on specific areas of interest. 

Two events have already taken place with the first focusing on what the sustained local authority of 2018 will look like and the skills and knowledge required for leading new models of local service.

This included how ambitious councils are engaging and equipping staff to become innovators, to challenge the way things are done, to take risks and to grow confidence to explore all options of delivery.

The second Exchange looked closely at reinventing local public services and examined the enthusiasm that the sector is bringing to changing public service delivery and the great leaps forward being made.

What was clear from our members attending was the need for councils to shift towards more business-focused organisations that reward quality and efficiency.  With strong collaborative leadership we are seeing more use made of our communities' capacity and better innovative working with chosen key partners for locally designed cutting edge delivery.

In our day-to-day work with councils throughout the country we are finding that, with real enthusiasm, they wish to learn from flagship councils that are developing new models of community budgeting, collaboration, commissioning, co-production and commercialism.

We find that councils are keen to engage in conversations about what future local governance and structures could look like in 2020 and how to move towards a wider system approach for the place.

Therefore our next Exchange ‘Driving Accelerated Transformation', which takes place in March, will look at the journey that council leaders are driving to move from transactional to transitional to transformational working. 

We know that councils have made transactional change to improve business procedures, practices and departmental structures as part of a measured approach to mitigate losses in funding and to meet changing demands. However moving to transitional change where authorities dismantle old systems and processes is often more challenging to implement.

Moving to transformational change to completely reshape business strategy and processes requires wholesale shift in mindsets, culture and external working.

Delivering services through different models requires external support and learning from others. 

At iESE we continue to develop products, programmes and partnerships to help local government deliver improved services at lower cost. The iESE Innovation Club marks a new era of support for councils across the country as they reduce costs and transform at the same time – come and join us! 

Dr Andrew Larner is chief executive of The Improvement and Efficiency Social Enterprise