Local authorities must not ‘throw out the rule book’ when restructuring services in response to cost pressures, the Local Government and Social Care Ombudsman has said.

Its Under Pressure report examined almost 40 case studies it said contained systemic problems resulting from councils changing the way they provide services – and said ‘huge changes’ made by councils in the last decade had been reflected in complaints.

The report said local authorities undergoing redesign need to ensure services continue to meet statutory levels of provision.

It warned restructuring had led to staff changes in some cases, ‘a loss of corporate memory’ about why decisions had been made and a lack of continuity of contact with vulnerable service users.

Some councils reported that restructuring had led to poor services because they were are having to make changes with fewer resources because of cost pressures.

The Ombudsman found evidence some councils had raised their eligibility thresholds to qualify for services, particularly in adult social care, as a way of generating money.

Further, it said local authorities need to ensure that the local market is ‘sufficiently developed’ to provide social care services.

While many councils had used procurement to stimulate local social care provider markets, some had run into difficulties with the approach and one council had ‘unrealistic expectations’ about the market, according to the watchdog.

Local Government and Social Care Ombudsman Michael King said: ‘While I appreciate the challenges councils are dealing with, we cannot make concessions for failures attributed to budget pressures and must continue to hold authorities to account against relevant legislation, standards, guidance and their own policies.

‘The lesson from this report is for councils to get the basics right and not throw out the rule book when working under pressure. The core principles of good administration are more important than ever when undergoing major transformation,’ he said.

Responding to the report, Peter Fleming, chairman of the Local Government Association’s improvement and innovation board, said: ‘ It is good that the Ombudsman recognises the significant budget and resource pressures facing councils, and the impact this has had on local services.

‘Councils have done all they can to protect local services, maintain residents’ satisfaction, and have embraced efficiency and innovation in a way that is not being replicated anywhere else in the public sector.

‘However, unprecedented funding pressures and demand for adult and children’s social care and homelessness services is pushing councils to the limit. As a result less money is being spent on the other services that keep our communities running such as libraries, local roads, early intervention and local welfare support.

‘With councils facing a funding gap of £7.8bn by 2025, many are increasingly unable to provide dignified care for our elderly and disabled, protect children, boost economic growth, fill potholes, build homes and much more.’