With 2011/12 budgets being finalised, the focus is now on the challenge of meeting the budget for the following year. Will it mean more salami-slicing or transformation? The MJ, with support services and construction provider Interserve, recently hosted a roundtable discussion with leading chief executives to discuss how they see the future of local government unfolding. Phil Cooper reports on the discussion
With councils now finalising their budgets and making cuts for a period of austerity, the debate should be moving on to address the shape of local government and service provision in the years ahead. But is it?
A dozen chief executives from a mixture of county, district, unitary and London borough councils at The MJ and Interserve roundtable discussion were not so sure.
One chief put it succinctly: ‘Year one was about cuts, year two onwards is about difference.’ Others echoed the point by posing the question which should be focusing local government minds: ‘What are we for?’
Those around the table explained that they were instituting savings ranging from several pounds to several tens of millions of pounds over the next few years, according to the size of their councils, and that many had been working hard over the previous two or three years to take costs out of the organisation without hitting frontline services.
Downsizing all at once would inevitably lead to slippages, and if these occurred in large capital programmes, there could be disastrous financial consequences. What were described as ‘coherent’ savings in previous years would now become more challenging in the future.
But what was the shape of that future?
‘A most worrying aspect is that I have never spent so much time enmeshed in the small detail of cuts as at present, but the big issue is about the future of the sector,’ said one chief. ‘We are setting our priorities on the basis of knee-jerk reactions, but we are rudderless, at the moment, as a sector. This could hamper us for years to come.’
This assertion, greeted with general agreement, provoked a further consideration that pointed up a marked difference in emphasis between some senior officers and the local elected members.
‘Having a rudder for our local areas is so important,’ said one participant, adding: ‘All the focus at present is on cutting the national deficit, but there is no debate on the ideological shift about reducing the size of the state. It is difficult to keep local councillors focused on the local vision rather than getting embroiled in the national deficit debate.’
Threatened cuts to library services dominating the national media is a case in point. ‘Nobody wants to ask if we need to be running libraries. There is no debate that libraries are a good thing, but do we need to do it? We are making decisions by default,’ was one comment.
The particular authority in question now had two museums run by community groups which were encouraging more and more people to visit them. This had never been thought possible previously.
The central-local relationship was a key component of this future, and communities secretary, Eric Pickles, was inevitably a target for criticism. ‘He’s a sort of Gerald Ratner,’ said one chief. ‘As long as he’s saying that we are selling crap then the public will believe it. But what we need is a mature debate across central and local government, and between the different layers of the public sector.’
Another added that ‘Mr Pickles is so obsessed with my salary’ that he had missed the opportunity of hammering real localism issues. Politicians always believed that everything had to be dressed up as new and fresh, but there had been much change in local government already which had a good record of innovation.
‘I find it depressing that so many people in local government think it’s not capable of innovation,’ was one comment. ‘More than one-third of our organisation is in collaboration or joint services, and I believe London is now at the point where the notion of collaboration is just going to bloom.’
There were those who were convinced that after its initial hectic burst of activity, things would settle down in central government. At least two chiefs felt there would be a ‘rowing back’ of activity.
‘Any government coming into power after 13 years in opposition will make mistakes on the ground. We’ve seen a massive shift between policy aspirations and getting it right,’ said one, who felt the use of more Downing Street advisers at the centre watching over ministers would lead to more coherence in policy decisions.
Returning to the issue of local councillors and their obsessions with either focusing on national issues or maintaining the way in which the public sector had always been viewed, particularly among Labour members, one participant commented: ‘Sometimes, politicians should step aside and let good management get on with it.’ Another chief added: ‘Our politicians are thinking, “We can get through this and come back, phoenix-like, in three to four years’ time”. As an officer saying we should engage is a different conversation.’
One of those different conversations, crucially, would need to be with private sector suppliers. Some of those around the table had already indicated that contracts had been renegotiated and savings had accrued as a result, but one chief raised this issue: ‘I’m not sure the suppliers have got it yet. They are still using the old models. We are still buying old models. For district councils, it’s the sense of not being big enough, and we are not sitting down at the table and using the power we have.’
For Interserve, a senior executive said it was a challenge for companies to work together with the public sector without employing an adversarial approach that was common within the commercial sector. ‘There is a job for us as contractors – there is a big learning curve to go up,’ he admitted. ‘There are clearly disincentives for competing companies to share too many of their best ideas but there is certainly a need for some type of forum to achieve this.’
There was a feeling that the relationship between councils and private sector suppliers needed to be redefined in the current economic climate, taking account of the ideological shifts already alluded to.
‘It comes down to a matter of trust,’ said the Interserve spokesman. ‘As an organisation, we talk about long-term relationships rather than contracts.’ He gave an example of negotiating a series of one-year contracts for a particular service so as to permit changes to occur while allowing such a long-term relationship to flourish.
Asked how this could be achieved, he responded: ‘By sitting down and talking it through at events such as this. There’s no one-size-fits-all approach.’
He described the renegotiating process as a ‘liberating’ one. Asked about the role of social enterprises and mutuals he added: ‘Joint ventures and mutuals do speak to a different way of operating which, if given time to mature, will be meaningful.’
One chief executive suggested: ‘We’ve got to tear up the concept of the 3,000-page specification. You need one side of A4 which tasks the provider to create a new model.’
Another chief set out a three-point agenda for working with the private sector. ‘We need a different model of how to do business, and that certainly includes not over-specifying,’ was the comment, adding: ‘There is the issue of risk to reputation which stays with us if we outsource. We need to discuss how we get that process shared.’
The third point was how to ensure that in partnership with the private sector the concern for social capital was built in. This was not merely taking account of current but previous and transferred staff, all of whom were customers and public servants. ‘Where do we see the impact and outcomes affecting this social capital?’ added the same participant.
The tensions identified during the discussion between central and local government also embraced the LGA. One participant commented that councils were being pushed by central government, ‘… and that is no way to run an organisation or deliver local services. We need to discuss this with the LGA. Are we masters of our destiny or do we just react?’
