The impact of the global financial crisis on cities and local public services
The ‘Great Recession’ has had a dramatic impact on the financial services sector and other areas of the private sector and highlighted the importance of the role of government at international and national levels in addressing global and systemic risks. But what has been the impact of the global financial crisis on the role, and brands, of cities and local governments? How have their budgets (both costs and revenues) been affected? And how confident are local government leaders in their ability to deal with future threats and most importantly, effectively and swiftly respond to these challenges?
This report addresses these issues, based on the findings of an international survey of the leaders of cities and local governments which sought to gauge their reactions, and understand their responses, to the global financial crisis. And it is clear from their reactions that local government leaders have already seen a significant impact on their organisations, brands and a collapse in revenues.
Tough times, hard choices
Tough times are driving innovation, collaboration and service design and rationalisation. There are winners and losers – with local government leaders, particularly in Developed countries, facing the need to transform in the face of impending crisis whereas others, particularly in Developing countries, have the opportunity to learn the lessons and leap frog to new models of service delivery, particularly focusing on early intervention and prevention and making more use of commissioning.
Now is a time to get back to basics, focus on those functions where cities and local governments can add the most value and retain the talent critical to these core functions. It is also a time for greater and better collaboration, across public sector agencies, with private and voluntary/not-for-profit organisations and spatially, across geographies.
Our goals in publishing this report are to outline the challenges and the opportunities facing local government leaders following the onset of the global financial crisis and to set out our views on the future for cities and local governments and successful ways for local government leaders to act. The research builds on the insights from PwC’s Global Cities and Local Government Network’s publication ‘Cities of the Future’ and subsequent toolkit, drawing on our experiences in working with cities and local governments around the world.
We appreciate the time taken by the local government leaders who responded to our survey. In order to provide a geographically balanced spread this report focuses on the 58 responses we received for the global survey. The results are also split by Developed countries (33 responses) and Developing countries (25 responses), in cities comprising a total population of over 120 million people. We have also commissioned country specific reports for Brazil, The Netherlands and Sweden covering an additional 215 cities. The details of our sample and our methodology for this global report are set out in the Appendix.
This report would not have been possible without the active participation of all the contributing cities and local authorities. We would like to thank all respondents for their contributions and whose views form the basis for this report.
PWC is partner of UDITE, our founding partner.