To decide to share chief executives and wider management teams as part of cost-cutting requires hard political decisions, says John Tizard
Almost every week, we learn that another set of local authorities is considering some form of joint management arrangements.
The range of options being pursued – and, in some cases, now well established – include:
shared chief executives
shared senior management teams or specific posts
shared or integrated service/corporate departments
joint appointments to specialist professional roles
shared services.
The driver for such initiatives tends to be a response to public expenditure pressures, undue pressure from ministers and, in some cases, the challenge of recruiting and retaining high-quality appointees.
In the case of the latter, often the approach will be opportunistic – for example, there is a key vacancy, or one is expected in one of the authorities.
There is every reason to expect more interest in these kinds of arrangements as the hard realities of the Government’s expenditure reductions hit. The Government has firmly resolved that it will not pursue local government structural reorganisation, but it is keenly supporting local voluntary moves of the kind listed above.
However, before organisations rush to seek out ‘love matches’, ‘marriages of convenience’, or ‘arranged marriages’ – these ‘joint arrangements’ raise some fundamental questions around accountability; cost sharing and transparency; performance management; and the role and responsibility of politicians and senior officers – all of which are worthy of some analysis, in advance.
The relationship between a council leader or directly-elected mayor and his or her chief executive is perhaps the most important in local government. The leader requires unbiased professional advice that will benefit their authority and its communities. And he or she also wants to be confident that there is an executive able and willing to execute their decisions and ensure that these are enacted.
Both the leader and the CEO will be leading ambassadors and negotiators and influencers for their authorities and communities. But can a CEO effectively undertake these duties across more than one authority? Can he or she serve and be accountable to more than one set of political leaders? And if so, on what terms and how?
These questions need to be carefully considered prior to setting up any joint CEO appointments.
Proper officers with specific legal duties, including the head of paid service and the section 151 officer, usually the finance director, have to undertake their duties without fear of favour. And while it should be possible to do so for more than one authority at the same time, some assurances and protocols will need to be agreed to protect these professional roles from potential conflicts.
Similar considerations will be required in respect of any joint senior appointment which involves providing advice to members, operational delivery and commissioning. It is conceivable and, indeed, likely that if two or more authorities come together, they will have different starting points in terms of managerial capability and capacity; performance and use of resources; and indeed, objectives.
This will mean that time and energy of the senior team may not be deployed or required on an equal basis in each authority. Unless this has been properly understood and codified in advance, it can lead to tensions and misunderstandings. Ideally, a joint management team should agree, in effect, service level agreements (SLAs) with each authority – but, of course, not everything is predictable, so some flexibility will be required.
If the key objective is to save money, there is little benefit in simply sharing a chief executive or even a few senior posts. The big savings will come from integrating service departments, commissioning units, procurement processes and assets with co-location and property rationalisation.
Inherent in these approaches are some major human resources, industrial relations and political issues which will need to be fully identified, debated and resolved before there is any implementation.
One way of addressing some of these matters is to establish a jointly-owned but separate entity to provide services back to the individual authorities on a traded-contracted basis, with accountability through the contract.
There are issues of timing to be considered. There will inevitably be additional transition costs and payback may take several years at a time when savings are required immediately. This could be a challenge, and may question the viability of incremental integration, which currently seems to be the popular model.
There will be implications for local public sector partners and local partnership arrangements, as well as the critical relations with local businesses, community and voluntary sectors. Some may be common across the partnering authorities and some may not – so the picture will be complex, but this is no reason to ignore it. These bodies or partners should not be squeezed out by any new arrangement and, indeed, should be consultees in the decision-making processes.
However, The really big challenge of these integrated and shared-management arrangements is the politics. It is possible that we are seeing the move to single local authorities with two or more political local government heads.
Is this sustainable, or will shared management lead, in some cases, to voluntary political merger?
If it does, what does this mean for local democracy and accountability, and indeed, the concept of place, given that some of these joint arrangements are not necessarily based on place or even adjacent places with much in common to their populations?
Although the Government is willing to consider political mergers and voluntary reductions in the number of elected councillors, it is unlikely there will be much enthusiasm for such approaches – and they raise serious questions about democratic accountability.
The relationship between chief executive and leader is critical to successful local government. There will need to be clarity in any shared arrangement as to how this will operate.
Therefore, when authorities are considering close working arrangements, mergers or sharing of senior staff, it is critical that politicians of the authorities involved understand the implications, and agree how they will work together on matters that must be shared at their level.
This includes senior appointments, appraisals and remuneration issues; overall resourcing decisions for shared functions and posts; setting outcome targets for the shared functions and their distribution between the participating bodies; governance, accountability and scrutiny arrangements; and the ‘legal partnering’ agreement between the participating authorities.
The latter will be critical, especially if the shared entity or arrangements are to employ staff, let contracts, own or lease assets and buildings, and cover the eventuality of one or more partner authorities failing on their commitments.
Such partnering arrangements will require the goodwill of the participants and, in particular, political leaders – but this alone will not be enough. There has to be sustainability which can survive change of political control – which could be very difficult in some cases – changes to key personnel or major policy, resource or legal changes.
None of these or their related challenges are insurmountable, but they have to be addressed upfront, and there will need to be informed and substantive local stakeholder consultation, which should include investment in engagement strategies to ensure that local people, local public sector partners, local businesses, and the community and voluntary sectors, as well as staff, are involved, and feel able to contribute to the debate and decision-making.
These decisions are likely to have long-term implications and commitments, so political leaders would be well advised to aim to create cross-party support, as well as wider stakeholder support.
Expert advice will be required to identify the options and evaluate them; address the human resources and wider people issues; consider the IT, property and other technical and resource issues; and implement the change.
The key issue, however, is that whatever external advice, knowledge, challenge and expertise is available, any decision of the kind as described above, will and always must be a matter for political choice, to be taken by accountable local politicians.
Members need to answer a series of questions, as if on a ‘flow decision map’ – taking each question and issue step by step, before deciding what to do, and then understanding the next set of issues and questions.
Political leaders will need to involve all their councillor colleagues – not only executive or cabinet members. These are matters for the whole council and not just the leadership.
It is critical that the community leadership and representation role of councillors is enhanced and not diminished by such arrangements, just as it is essential that the place-shaping role of the local authority is protected and, ideally, strengthened.
The same applies to the strategic commissioning function – itself a political process and responsibility – even if tactical commissioning is ultimately undertaken through the shared arrangements.
There would also be much merit in engaging scrutiny and overview in such processes too – a key role being to act as critical friend and challenge throughout the evaluation, decision-making, and implementation stages, and then holding the leaders to account for the outcomes achieved.
I am under no illusion that we are going to see more merging of management and services across authorities in the months and years to come. However, it is vital to grasp at the outset that this is not a mere technical or managerial issue.
Fundamentally, unavoidably and rightly so – it is political. And in this case, that means at the local level – not national. n
John Tizard is director of the Centre for Public Service Partnerships
