11 November 2008
Is it time for a culture shock?
Peter Gould
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Many councils still find the prospect of shared or outsourced service arrangements with their neighbours too difficult or unpalatable. A change of culture is needed, says Peter Gould
Will – or even should – the credit crunch become a culture crunch for many councils? The challenges both present, and in prospect, place severe pressures on individual lives and council finances. So, what to do?
At the recent SOLACE conference in Belfast, the mood reflected current economic events. Discussion sessions gravitated toward the credit crunch and its consequences.
That was the week when the Icelandic banking sector collapsed. And as news from Iceland spread, chief executives were to be seen in corners of the conference venue in earnest mobile calls to their finance directors, making comments such as ‘How much did we place?’ ‘What are our options?’ ‘I need a report on my desk for when I get back’. Also at SOLACE, Sir Peter Gershon was on hand to talk through the £4.9bn required through the new round of efficiency savings. His characteristic, serious demeanour seemed more apposite than ever.
Sir Peter was a panellist in a workshop entitled ‘Has the efficiency engine run out of steam?’. The session – reported by Heather Jameson in The MJ, 30 October – was chaired by The MJ editor, Mike Burton.
Giving a clear message that councils would have to challenge themselves and, in particular, justify why they needed to do things in-house, Sir Peter stressed the inevitable importance of contestability in service provision.
Many of us sat in the session holding ‘hot off the press’ copies of that week’s The MJ with the cover story given over to the new efficiency targets and Audit Commission chairman, Michael O’Higgins, urging councils to move from simple efficiency gains to secure ‘truly transformational’ services.
Yet the conversation in the room seemed more about the prospect of closing libraries and other services than of service transformation. The difficulties of getting councils to work together to share services were once again rehearsed. There was, it was said, no silver bullet.
Why is it that councils might be prepared to meet financial gaps through service closure rather than share back or front offices?
In the course of my business, I have many discussions with chief executives who want and need to achieve economies in their back-office services, and want to improve, but can’t invest in better customer services.
However, they still find the prospect of shared or outsourced service arrangements with their neighbours too difficult or unpalatable. Even those councils in Pathfinder arrangements are finding it difficult to make headway, and there seems little prospect of these Pathfinders delivering equivalent benefits to the new unitaries to which they were the legitimate alternative.
The question remains, What is it about our business that makes sharing – particularly support – services so very difficult?”
It’s almost two years since the New Local Government Network published a report The politics of shared services, which identified a number of the barriers which stand between councils and the £40bn-plus efficiency savings that have been estimated to be possible through sharing back-office services over the next 10 years.
It is telling that these barriers are very substantially cultural and not technical or legal.
This is both good and bad news. The good news is that, while streamlining improvements to the procurement process could be made, nothing needs to be changed to make sharing services possible. And herein lies the bad news. What needs to change are culture and motivation. These are much more tricky than changes to rules and procedures. Back to the wisdom of colleagues at the SOLACE conference, reminding us that the struggle to make budgets work is not the end in itself but the means to an end – the well-being of those for whom the impact of recession is more immediate and stark.
Now, more than ever before, there is a greater need to focus on core business. This is the time to put aside those cultural barriers and realise some of the efficiencies readily available, not just to solve a financial problem but to provide simpler, more streamlined and accessible services in the process.
Will the credit crunch, in combination with the new efficiency targets, provoke a culture crunch that enables councils to overcome those barriers to shared working. We shall see.
Peter Gould is a director of Gould Advisory Services and former chief executive of Northamptonshire CC
Will – or even should – the credit crunch become a culture crunch for many councils? The challenges both present, and in prospect, place severe pressures on individual lives and council finances. So, what to do?
At the recent SOLACE conference in Belfast, the mood reflected current economic events. Discussion sessions gravitated toward the credit crunch and its consequences.
That was the week when the Icelandic banking sector collapsed. And as news from Iceland spread, chief executives were to be seen in corners of the conference venue in earnest mobile calls to their finance directors, making comments such as ‘How much did we place?’ ‘What are our options?’ ‘I need a report on my desk for when I get back’. Also at SOLACE, Sir Peter Gershon was on hand to talk through the £4.9bn required through the new round of efficiency savings. His characteristic, serious demeanour seemed more apposite than ever.
Sir Peter was a panellist in a workshop entitled ‘Has the efficiency engine run out of steam?’. The session – reported by Heather Jameson in The MJ, 30 October – was chaired by The MJ editor, Mike Burton.
Giving a clear message that councils would have to challenge themselves and, in particular, justify why they needed to do things in-house, Sir Peter stressed the inevitable importance of contestability in service provision.
Many of us sat in the session holding ‘hot off the press’ copies of that week’s The MJ with the cover story given over to the new efficiency targets and Audit Commission chairman, Michael O’Higgins, urging councils to move from simple efficiency gains to secure ‘truly transformational’ services.
Yet the conversation in the room seemed more about the prospect of closing libraries and other services than of service transformation. The difficulties of getting councils to work together to share services were once again rehearsed. There was, it was said, no silver bullet.
Why is it that councils might be prepared to meet financial gaps through service closure rather than share back or front offices?
In the course of my business, I have many discussions with chief executives who want and need to achieve economies in their back-office services, and want to improve, but can’t invest in better customer services.
However, they still find the prospect of shared or outsourced service arrangements with their neighbours too difficult or unpalatable. Even those councils in Pathfinder arrangements are finding it difficult to make headway, and there seems little prospect of these Pathfinders delivering equivalent benefits to the new unitaries to which they were the legitimate alternative.
The question remains, What is it about our business that makes sharing – particularly support – services so very difficult?”
It’s almost two years since the New Local Government Network published a report The politics of shared services, which identified a number of the barriers which stand between councils and the £40bn-plus efficiency savings that have been estimated to be possible through sharing back-office services over the next 10 years.
It is telling that these barriers are very substantially cultural and not technical or legal.
This is both good and bad news. The good news is that, while streamlining improvements to the procurement process could be made, nothing needs to be changed to make sharing services possible. And herein lies the bad news. What needs to change are culture and motivation. These are much more tricky than changes to rules and procedures. Back to the wisdom of colleagues at the SOLACE conference, reminding us that the struggle to make budgets work is not the end in itself but the means to an end – the well-being of those for whom the impact of recession is more immediate and stark.
Now, more than ever before, there is a greater need to focus on core business. This is the time to put aside those cultural barriers and realise some of the efficiencies readily available, not just to solve a financial problem but to provide simpler, more streamlined and accessible services in the process.
Will the credit crunch, in combination with the new efficiency targets, provoke a culture crunch that enables councils to overcome those barriers to shared working. We shall see.
Peter Gould is a director of Gould Advisory Services and former chief executive of Northamptonshire CC
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