There has been much media coverage today about a survey into whether councils intend taking up the government's offer of funding a 2.5% rise in council tax from next April in order to create a freeze. According to a sample of 146 council finance directors, '20%' may not take up the offer.
I'm puzzled by the attention given to the survey. The percentage of councils likely to reject this offer is actually only 4% i.e. 7 with the remaining 16%, about 21, undecided. They are undecided because as yet they haven't made up their minds, quite probably because a decision about council tax rises for next April has not yet been taken by their authority.
It will be almost impossible for a council to tell its taxpayers that it has turned down a subsidy from the government in order to put its tax up by 5%. The government knows it is a populist gesture which shows it feels voters' pain. Long-term it will whittle away councils' tax base but in the short-term councils have little choice but to accept it or face derision followed by extinction at the next local polls.
Mark my words, come next spring councils will take up this offer.
Thursday, 24 November 2011
Friday, 11 November 2011
Councils should get on with their own community budget plans despite the pilots
The LGA and its leaders are right to criticise the modest ambitions of the next round of cxommunity budget pilots, that is, the two for neighbourhoods and the two for a single pot in a whole place. When they were first announced at the LGA conference in June by Nick Clegg I made that point myself to one of the DCLG ministers, Greg Clark, and was given the impression that there would in time be more to come and that these pilots were merely the start of the process.
What puzzles me is that I have yet to meet anyone from across the political spectrum who disagrees with the principles behind expanding the community budgets programme. Eric Pickles is now an enthusiastic convert and - as he told The MJ last month in an interview at an LGA conference on community budgets - is keen to 'smash down the silos' between government departments both nationally and locally. So if no one disagrees with the concept, then why not make the next stage of community budgets much more ambitious than merely announcing four pilots?
The answer has to be that Whitehall itself is concerned at the prospect of seeing departmental, silo-based budgets morphed into single pots, thereby blurring its own accountability lines even though Mr Pickles told councils at the conference to 'make Whitehall an offer.'
Okay, then councils should take him up on it. Forget the modest number of pilots and the DCLG form-filling required to apply to be one. Why can't a council simply set up its own shadow whole place, single pot budget along with its local partners and present the findings to Mr Pickles? Don't wait for guidance or pilots - just get on with it anyway.
What puzzles me is that I have yet to meet anyone from across the political spectrum who disagrees with the principles behind expanding the community budgets programme. Eric Pickles is now an enthusiastic convert and - as he told The MJ last month in an interview at an LGA conference on community budgets - is keen to 'smash down the silos' between government departments both nationally and locally. So if no one disagrees with the concept, then why not make the next stage of community budgets much more ambitious than merely announcing four pilots?
The answer has to be that Whitehall itself is concerned at the prospect of seeing departmental, silo-based budgets morphed into single pots, thereby blurring its own accountability lines even though Mr Pickles told councils at the conference to 'make Whitehall an offer.'
Okay, then councils should take him up on it. Forget the modest number of pilots and the DCLG form-filling required to apply to be one. Why can't a council simply set up its own shadow whole place, single pot budget along with its local partners and present the findings to Mr Pickles? Don't wait for guidance or pilots - just get on with it anyway.
Wednesday, 26 October 2011
More redundancies means less paying members in the pension scheme
News that the Local Government Pension Scheme is losing members in droves is hardly surprising considering the job losses in the sector in the past year. Nor is it much of a surprise that neither the DCLG- which issued the figures - or the unions or employers have shouted it from the rooftops; after all, fewer members making contributions means less income coming into the scheme and more pressure on the funding level which is not helpful to the current delicate negotiations about reducing the LGPS's costs to the public.
The DCLG says the number leaving the scheme because of redundancy in the year ending last March was up 40% to more than 17,600. The number of former staff entitled to deferred benefits is also up. Many of these will be ex-employees who have left before retirement, either voluntarily or through redundancy. Not only do they cease to contribute but their deferred pension sits as a cost in the scheme ready for when they retire.
While the scheme's assets rely heavily on stock market performance for their income, a reducing number of paying active members is bad news. On top of this the town hall unions, in their campaign to prevent the government from forcing the LGPS to increase contribution levels, has already issued warnings that staff on average salaries - above the threshold for increased contributions - will quit the scheme because of its extra costs.
Another figure to bear in mind is the number of early retirements triggered by cutbacks. These in effect become another burden on the pension fund. A decade ago the Audit Commission issued a warning about councils using the pension fund as a means of managing out staff. In those days it could afford it; now it cannot.
The DCLG says the number leaving the scheme because of redundancy in the year ending last March was up 40% to more than 17,600. The number of former staff entitled to deferred benefits is also up. Many of these will be ex-employees who have left before retirement, either voluntarily or through redundancy. Not only do they cease to contribute but their deferred pension sits as a cost in the scheme ready for when they retire.
While the scheme's assets rely heavily on stock market performance for their income, a reducing number of paying active members is bad news. On top of this the town hall unions, in their campaign to prevent the government from forcing the LGPS to increase contribution levels, has already issued warnings that staff on average salaries - above the threshold for increased contributions - will quit the scheme because of its extra costs.
Another figure to bear in mind is the number of early retirements triggered by cutbacks. These in effect become another burden on the pension fund. A decade ago the Audit Commission issued a warning about councils using the pension fund as a means of managing out staff. In those days it could afford it; now it cannot.
Friday, 7 October 2011
The impact of quantitative easing
What is the difference between quantitative easing and public spending? Or for that matter what is the difference between QE, public spending and the billion pounds that Messrs Pickles and Osborne together found down the back of their sofas for weekly bin collections and freezing council tax?
There will undoubtedly be a technical argument - that the billion pound bung was 'found' in Whitehall from money already collected in taxes and simply unallocated and therefore does not count as extra public spending on the balance sheets. And QE is directed at banks and bonds. But the principle remains the same. The economy is stagnating, liquidity is tight, consumers are cutting their spending and the government wants to get things moving by injecting more cash into the economy. The effect of £75 billion of electronic money created to purchase bonds issued by the Treasury is aimed at stimulating spending. The £800m announced by Osborne to hold down council tax is aimed at not further deflating consumer demand through tax rises.
Would it have been better instead not to have imposed such a severe spending round for the public sector in the first place in particular local government which has caused job losses and further depressed the economy? And would it now not be better for the Treasury to revisit its spending plans for the next two years and alleviate some of these cuts, especially in the more depressed regions like the north and Midlands?
There will undoubtedly be a technical argument - that the billion pound bung was 'found' in Whitehall from money already collected in taxes and simply unallocated and therefore does not count as extra public spending on the balance sheets. And QE is directed at banks and bonds. But the principle remains the same. The economy is stagnating, liquidity is tight, consumers are cutting their spending and the government wants to get things moving by injecting more cash into the economy. The effect of £75 billion of electronic money created to purchase bonds issued by the Treasury is aimed at stimulating spending. The £800m announced by Osborne to hold down council tax is aimed at not further deflating consumer demand through tax rises.
Would it have been better instead not to have imposed such a severe spending round for the public sector in the first place in particular local government which has caused job losses and further depressed the economy? And would it now not be better for the Treasury to revisit its spending plans for the next two years and alleviate some of these cuts, especially in the more depressed regions like the north and Midlands?
Monday, 3 October 2011
The Osborne council tax freeze bung
Perhaps the Conservatives should take up the emblem of a sofa for their annual conference backdrop in Manchester this week judging by how useful said item of furniture has proved in the past few days. First Eric Pickles found £250m down the back of the DCLG sofa for his favourite pet project of weekly bin collectiions. Now George Osborne has discovered another handy sofa in the Treasury behind which he has extracted £800m to fund a second year of council tax freeze.
No wonder people get cynical about politicians. Firstly, this billion pound bung just happens to coincide with the Conservative Party conference. Secondly, I thought we were supposed to be broke. Thirdly, where has this money come from and don't tell me it's from that hoary old chestnut 'Whitehall efficiency savings'? And fourthly, maybe it was always there from the start, deliberately kept back for a rainy day. For George Osborne in opposition always maintained that he would freeze council tax for two years - then made it only one year in his last Budget, thereby allowing himself the room to 'announce' another year.
Furthermore it is just more nails in the coffin of localism. If councils can't even decide on their bin collections or their council tax levels then what powers do they really have in the end?
No wonder people get cynical about politicians. Firstly, this billion pound bung just happens to coincide with the Conservative Party conference. Secondly, I thought we were supposed to be broke. Thirdly, where has this money come from and don't tell me it's from that hoary old chestnut 'Whitehall efficiency savings'? And fourthly, maybe it was always there from the start, deliberately kept back for a rainy day. For George Osborne in opposition always maintained that he would freeze council tax for two years - then made it only one year in his last Budget, thereby allowing himself the room to 'announce' another year.
Furthermore it is just more nails in the coffin of localism. If councils can't even decide on their bin collections or their council tax levels then what powers do they really have in the end?
Friday, 16 September 2011
Clegg plays to the Lib Dem gallery in fast tracking 40 infrastructure projects
As always with politicians their speeches are significant not so much for their content as for their timing and their message.
Take Deputy PM and Lib Dem leader Nick Clegg's address at the LSE on September 14. Some of the national media in the morning trailed the fact that he was 'fast tracking' 40 major infrastructure projects. But the real story was how he was setting out his wares in advance of the Liberal Democrat conference.
Clegg has to stand by the government's deficit strategy and indeed he said so in his speech. But this is unpopular in his own party, many of whom are calling for 'Plan B' with a slowdown in public spending cuts. So Clegg then maintained that there was a backlog of big projects sitting in Whitehall, already accounted for in the budget, but grinding through the system. If these could be pushed through, was his message, then they would help alleviate some of the impact of spending cuts on employment and the economy. In effect he was calling for more public spending to offset public spending cuts, surely as near an appeal to bring in Plan B as he can.
But Cameron and Osborne will be relaxed because they know the Liberal Democrat conference is looming and the last thing they want is Clegg being howled down. They also realise that highlighting the headline 40 infrastructure projects is the usual example of political smoke and mirrors. The aim is entirely to get Nick Clegg out of a tight spot by being seen to 'do something' about the economy without really doing anything at all.
Take Deputy PM and Lib Dem leader Nick Clegg's address at the LSE on September 14. Some of the national media in the morning trailed the fact that he was 'fast tracking' 40 major infrastructure projects. But the real story was how he was setting out his wares in advance of the Liberal Democrat conference.
Clegg has to stand by the government's deficit strategy and indeed he said so in his speech. But this is unpopular in his own party, many of whom are calling for 'Plan B' with a slowdown in public spending cuts. So Clegg then maintained that there was a backlog of big projects sitting in Whitehall, already accounted for in the budget, but grinding through the system. If these could be pushed through, was his message, then they would help alleviate some of the impact of spending cuts on employment and the economy. In effect he was calling for more public spending to offset public spending cuts, surely as near an appeal to bring in Plan B as he can.
But Cameron and Osborne will be relaxed because they know the Liberal Democrat conference is looming and the last thing they want is Clegg being howled down. They also realise that highlighting the headline 40 infrastructure projects is the usual example of political smoke and mirrors. The aim is entirely to get Nick Clegg out of a tight spot by being seen to 'do something' about the economy without really doing anything at all.
Wednesday, 31 August 2011
Has the government run out of steam already?
The political party conference season is loooming and if I were a government minister I would be increasingly worried that my policy cupboard was looking bare after hardly 18 months in power. The question now is what does the Coalition stand for? What does David Cameron stand for? What is the direction of travel?
Absolute core to the government's economic policy is reducing the deficit but this is increasingly suspect due to the feeble state of the economy and rising inflation. George Osborne's gamble was to hope the private sector would pick up in time to offset early public spending cuts. This looks unlikely and in UK cities and regions where public spending is already a large part of the local economy, spending cuts are tipping them back into recession.
The Prime Minister's White Paper on public sector reform early in the summer was a disappointing mish-mash of existing policies and vague expressions of intent. Big Society, which once defined Cameron's political philosopy, was hardly mentioned. The recent riots have placed a question mark over cuts to police budgets. The health reform plans have had to be revised. Housing is rapidly moving up the political agenda with no apparent strategy to tackle shortages. The welfare reform plans are still in their infancy. Only in education has Michael Gove's academies and free schools moved inexorably forward.
The paucity of policy contrasts with the deep-seated fundamental challenges faced in UK society. They range from inner city youth crime to long-term pension provision, elderly care, the impossibility of finding mortgages for young housebuyers, the decline in the average standard of living, the long-term position of financial services as engine of the UK's economy. Let;s have some serious policy papers on these.
Absolute core to the government's economic policy is reducing the deficit but this is increasingly suspect due to the feeble state of the economy and rising inflation. George Osborne's gamble was to hope the private sector would pick up in time to offset early public spending cuts. This looks unlikely and in UK cities and regions where public spending is already a large part of the local economy, spending cuts are tipping them back into recession.
The Prime Minister's White Paper on public sector reform early in the summer was a disappointing mish-mash of existing policies and vague expressions of intent. Big Society, which once defined Cameron's political philosopy, was hardly mentioned. The recent riots have placed a question mark over cuts to police budgets. The health reform plans have had to be revised. Housing is rapidly moving up the political agenda with no apparent strategy to tackle shortages. The welfare reform plans are still in their infancy. Only in education has Michael Gove's academies and free schools moved inexorably forward.
The paucity of policy contrasts with the deep-seated fundamental challenges faced in UK society. They range from inner city youth crime to long-term pension provision, elderly care, the impossibility of finding mortgages for young housebuyers, the decline in the average standard of living, the long-term position of financial services as engine of the UK's economy. Let;s have some serious policy papers on these.
Saturday, 6 August 2011
Opening up public services
The other day as part of our series of articles on winners from The MJ Awards 2011 I visited Wiltshire Council which won the best political team category. Virtually all the cabinet members as well as the leader Jane Scott was there to talk to me about progress as a new unitary since 2009 and it has been an impressive story.
What is interesting is their attitude to outsourcing. They may be Conservatives but they maintain they take a pragmatic view to who delivers services. They have even taken a previously outsourced service contract back in house because they felt the supplier was under-performing and say the service has since improved. They argue that had more services been outsourced it would have been difficult to make savings since they would have been tied into inflexible contracts.
David Cameron's recent White Paper on opening up public services seemed to miss this essential point namely that what matters is what works and that it is not always the case that transferring a service to an outside provider necessarily makes it always better. And the idea that a council has less potential to make savings if its services are all tied into externalised contracts adds another dimension.
The private good-public bad or public good-private bad argument is a stale debate that has long outlived reality. Local government has been dealing with mixed provision for decades and knows there is no right or wrong about delivery. The public doesn't care and pragmatic councillors, like those at Wiltshire, will make their own minds up about who is best placed to deliver the best services to their residents.
I'm away now for two weeks in Italy - which considering the economic circumstances coulld prove interesting!
What is interesting is their attitude to outsourcing. They may be Conservatives but they maintain they take a pragmatic view to who delivers services. They have even taken a previously outsourced service contract back in house because they felt the supplier was under-performing and say the service has since improved. They argue that had more services been outsourced it would have been difficult to make savings since they would have been tied into inflexible contracts.
David Cameron's recent White Paper on opening up public services seemed to miss this essential point namely that what matters is what works and that it is not always the case that transferring a service to an outside provider necessarily makes it always better. And the idea that a council has less potential to make savings if its services are all tied into externalised contracts adds another dimension.
The private good-public bad or public good-private bad argument is a stale debate that has long outlived reality. Local government has been dealing with mixed provision for decades and knows there is no right or wrong about delivery. The public doesn't care and pragmatic councillors, like those at Wiltshire, will make their own minds up about who is best placed to deliver the best services to their residents.
I'm away now for two weeks in Italy - which considering the economic circumstances coulld prove interesting!
Tuesday, 26 July 2011
The GDP figures and Osborne's public spending plans
I was having lunch the other day with a distinguished ex-government public finance expert who had a couple of observations that stuck in my mind. One was: 'There's no way George Osborne will cut public spending. No government has. All the spending review does is to reduce the rate of spending growth.' His second was: 'I don't understand why he keeps banging on about spending cuts satisfying the international markets. Most of the borrowing to fund the deficit is from within the UK.'
I thought about this as the latest grisly GDP for the second quarter of the year was published today. At 0.2% it is down on the previous quarter however much the drop is blamed on the Royal Wedding and the Japanese tsunami. With public spending cuts starting to bite, there is a very strong likelihood the current quarter could even show a minus figure. The irony is that it is financial services which are offsetting the drop in government services spend.
Will there be a temptation to do some behind the scenes adjustment of spending levels in order to shore up the GDP? For it is likely - going back to the above comment - that public spending will anyway prove to be resilient to cuts, especially as demand keeps rising. George Osborne is increasingly relying on the mantra that his spending plans are saving the UK from being hammered by the international markets like Greece even though the figures may be all smoke and mirrors. But in two to three years time all this will just be history and no one will probably care anyway.
I thought about this as the latest grisly GDP for the second quarter of the year was published today. At 0.2% it is down on the previous quarter however much the drop is blamed on the Royal Wedding and the Japanese tsunami. With public spending cuts starting to bite, there is a very strong likelihood the current quarter could even show a minus figure. The irony is that it is financial services which are offsetting the drop in government services spend.
Will there be a temptation to do some behind the scenes adjustment of spending levels in order to shore up the GDP? For it is likely - going back to the above comment - that public spending will anyway prove to be resilient to cuts, especially as demand keeps rising. George Osborne is increasingly relying on the mantra that his spending plans are saving the UK from being hammered by the international markets like Greece even though the figures may be all smoke and mirrors. But in two to three years time all this will just be history and no one will probably care anyway.
Tuesday, 5 July 2011
More adoption could save in the long term
Two reports this week examine both ends of the care system, one from Dilnott on adult care and the other from ex-Barnado's chief Martin Narey on adoption.
The former has received inevitably huge coverage. It has at least provoked politicians into an all-party approach to the intractable issue of how to deal with adult care. The worst fears of the elderly is that they will lose all they have on being looked after in the last few years of their lives. At least Dilnot places a figure on the maximum cost the infirm elderly can expect to pay, thereby ensuring they can plan for it, as well as making the costs of finding insurance for it more feasible. The whole point of the welfare state is to act as a safety blanket so that citizens do not find themselved impoverished through no fault of their own. And nor should this just apply to the poor. If the middle classes are somehow removed from the benefits of the welfare system then they will refuse to fund it. Dilnot at last offers practical solutions. Now it's down to the politicians...
The second report, from Narey for The Times on July 5, follows the newspaper's campaign to improve the ramshackle adoption system. It criticises councils - among others - for inconsistent performance in placing children into adoption and calls for league tables to name and shame the council laggards. In particular it attacks bureaucratic and politically correct barriers to adoption and slates some social services departments for insisting against evidence on returning children in care to their problem families.
Considering that the local authority bill for looked-after children has soared since the Baby P case one would have assumed councils would be far more pro-active in placing such children into adoption. The record on educational achievement and crime among looked-after children is so abysmal that care has to be a last resort. More adoption will in the long-term save money - it could even help fund the extra costs of adult care outlined in the Dilnot report!
The former has received inevitably huge coverage. It has at least provoked politicians into an all-party approach to the intractable issue of how to deal with adult care. The worst fears of the elderly is that they will lose all they have on being looked after in the last few years of their lives. At least Dilnot places a figure on the maximum cost the infirm elderly can expect to pay, thereby ensuring they can plan for it, as well as making the costs of finding insurance for it more feasible. The whole point of the welfare state is to act as a safety blanket so that citizens do not find themselved impoverished through no fault of their own. And nor should this just apply to the poor. If the middle classes are somehow removed from the benefits of the welfare system then they will refuse to fund it. Dilnot at last offers practical solutions. Now it's down to the politicians...
The second report, from Narey for The Times on July 5, follows the newspaper's campaign to improve the ramshackle adoption system. It criticises councils - among others - for inconsistent performance in placing children into adoption and calls for league tables to name and shame the council laggards. In particular it attacks bureaucratic and politically correct barriers to adoption and slates some social services departments for insisting against evidence on returning children in care to their problem families.
Considering that the local authority bill for looked-after children has soared since the Baby P case one would have assumed councils would be far more pro-active in placing such children into adoption. The record on educational achievement and crime among looked-after children is so abysmal that care has to be a last resort. More adoption will in the long-term save money - it could even help fund the extra costs of adult care outlined in the Dilnot report!
Sunday, 3 July 2011
Conclusions from the LGA conference
There are three main messages to be drawn from last week's successful LGA conference in Birmingham.
The first is that DCLG ministers appeared to be making a real effort with the sector. Last year at the 2010 LGA conference the papers were full of the planted 'non jobs' story. This year there were no planted stories slagging off the sector. Indeed in an exclusive interview with The MJ last week Eric Pickles went out of his way to praise local government for bearing the burden of the cuts and announced the 'second phase', a warmer relationship with the sector driven by the localism agenda.
He and his colleagues made a point of being out and about among delegates with Bob Neill and Greg Clark also attending the evening receptions. Many delegates said to me they had noticed the more positive difference in tone this year. The question is whether this is all a deliberate part of the 'second phase' or they are carrying out instructions from No 10 to be more constructive with the sector or, as more than one delegate said to me, DCLG permanent secretary Sir Bob Kerslake has got to grips with his department and put the special advisers (the SPADS) back on their leashes - or in likelihood a mix of all three. Either way, the change was noted and appreciated.
The second message from last week is that despite criticism from some councils during the past year that the LGA should have been more forthright about the cuts, it continues to command respect in the corridors of power. How many conferences can boast having all three party leaders as speakers? And it was also the first time the LGA was addressed by a Prime Minister who also went out of his way during questions and answers to praise councils for being more efficient than central government.
Thirdly, this was the conference which for the first time heard the words 'Total Place' emanating from a senior Coalition minister when Nick Clegg uttered them as he announced new pilot programmes for community budgets. These two words have been out of favour for the past year since they were associated with Labour. But even without this shift, it is clear community budgets/Total Place are at last rising up the political agenda. Greg Clark may have his fingerprints all over this announcement of more pilots but the Treasury is also behind the concept thanks to support from Lib Dem chief secretary Danny Alexander - hence the pilots being announced by Nick Clegg ratheer than say Pickles.
And further evidence of this rediscovery of the value of merging public sector budgets came from Andrew Lansley who extolled their virtues in dealing with preventative health - to the extent of praising the health authority which gave some of its budget to the county highways department to de-ice roads, thus preventing elderly people from having accidents, thereby saving money in A and E. Now that is a perfect example of Total Place in action.
The first is that DCLG ministers appeared to be making a real effort with the sector. Last year at the 2010 LGA conference the papers were full of the planted 'non jobs' story. This year there were no planted stories slagging off the sector. Indeed in an exclusive interview with The MJ last week Eric Pickles went out of his way to praise local government for bearing the burden of the cuts and announced the 'second phase', a warmer relationship with the sector driven by the localism agenda.
He and his colleagues made a point of being out and about among delegates with Bob Neill and Greg Clark also attending the evening receptions. Many delegates said to me they had noticed the more positive difference in tone this year. The question is whether this is all a deliberate part of the 'second phase' or they are carrying out instructions from No 10 to be more constructive with the sector or, as more than one delegate said to me, DCLG permanent secretary Sir Bob Kerslake has got to grips with his department and put the special advisers (the SPADS) back on their leashes - or in likelihood a mix of all three. Either way, the change was noted and appreciated.
The second message from last week is that despite criticism from some councils during the past year that the LGA should have been more forthright about the cuts, it continues to command respect in the corridors of power. How many conferences can boast having all three party leaders as speakers? And it was also the first time the LGA was addressed by a Prime Minister who also went out of his way during questions and answers to praise councils for being more efficient than central government.
Thirdly, this was the conference which for the first time heard the words 'Total Place' emanating from a senior Coalition minister when Nick Clegg uttered them as he announced new pilot programmes for community budgets. These two words have been out of favour for the past year since they were associated with Labour. But even without this shift, it is clear community budgets/Total Place are at last rising up the political agenda. Greg Clark may have his fingerprints all over this announcement of more pilots but the Treasury is also behind the concept thanks to support from Lib Dem chief secretary Danny Alexander - hence the pilots being announced by Nick Clegg ratheer than say Pickles.
And further evidence of this rediscovery of the value of merging public sector budgets came from Andrew Lansley who extolled their virtues in dealing with preventative health - to the extent of praising the health authority which gave some of its budget to the county highways department to de-ice roads, thus preventing elderly people from having accidents, thereby saving money in A and E. Now that is a perfect example of Total Place in action.
Thursday, 16 June 2011
Is global capitalism against the public sector?
I was on a panel last week at the Midlands SOLACE conference, taking part in a discussion about the future of chief executives but much of the debate was about the bad press councils get in the national media.
I thought one of the panellists, Kim Ryley, chief executive of Shropshire Council and president of SOLACE made an interesting observation. Kim had just returned from Australia and Canada where he had been invited by the local authority chiefs' associations there.
He maintained that local government received the same bad press and kicking as over there. He added: 'It's not just a UK issue. They don't have Eric Pickles but the language is the same. Global capitalism doesn't want to pay the taxes for the public sector and the media is happy to promulgate that view.'
Now we know that the Pickles/Shapps offensive against 'non jobs', chiefs' salaries and alleged waste in the UK is all part of their trashing the sector's reputation to avoid it receiving any public sympathy over spending cuts. But the idea that the private sector and big business/high finance internationally as well is also against taxes for public services and is running a campaign through a pliant media to denigrate the public sector is certainly a thought-provoking one.
Personally I don't believe it is clear cut as that. The private sector is a huge supplier to the public sector and as we know spending cuts have been a body blow to many companies with public sector contracts. The two sectors are entwined. But of course the views of businesses on the ground do not necessarily tally with those of multinationals for whom countries are flags of convenience and taxes to pay for their public services are a nuisance to be avoided. We may hear more of this discussion.
I thought one of the panellists, Kim Ryley, chief executive of Shropshire Council and president of SOLACE made an interesting observation. Kim had just returned from Australia and Canada where he had been invited by the local authority chiefs' associations there.
He maintained that local government received the same bad press and kicking as over there. He added: 'It's not just a UK issue. They don't have Eric Pickles but the language is the same. Global capitalism doesn't want to pay the taxes for the public sector and the media is happy to promulgate that view.'
Now we know that the Pickles/Shapps offensive against 'non jobs', chiefs' salaries and alleged waste in the UK is all part of their trashing the sector's reputation to avoid it receiving any public sympathy over spending cuts. But the idea that the private sector and big business/high finance internationally as well is also against taxes for public services and is running a campaign through a pliant media to denigrate the public sector is certainly a thought-provoking one.
Personally I don't believe it is clear cut as that. The private sector is a huge supplier to the public sector and as we know spending cuts have been a body blow to many companies with public sector contracts. The two sectors are entwined. But of course the views of businesses on the ground do not necessarily tally with those of multinationals for whom countries are flags of convenience and taxes to pay for their public services are a nuisance to be avoided. We may hear more of this discussion.
Wednesday, 1 June 2011
How good are you on your key stats?
The public lives in blissful ignorance about how councils are funded and where their money goes. So the latest figures from the DCLG ought to provide some illumination In fact some of these stats ought to be issued in every council's annual report.
The DCLG issues its Local Government Statistics for England every year and this is the 22nd . They include figures from the previous year, in this case 2009/10 and projections for the next one. So here are some questions to test your knowledge of the sector:
A: What proportion of council funding comes from central government?
B: What percentage of total spending goes on education and social services?
C: What was the total local government spend for 2009/10?
D: What percentage of total public spending goes on local government?
E: How much does local government cost each taxpayer after taking out non-grant funding?
F: By how much has Band D council tax increased since it started in 1993?
Did you get them right?
Here are the answers: A: Two thirds. B: 54%. C: £168bn. D: a quarter. E: £2,490. F: 2.3 times the rate of inflation.
For these and other fascinating facts and figures just go to our Intelligence section on the website for a summary and link to the full report at http://www.info4local.gov.uk/documents/publications/1912292
The DCLG issues its Local Government Statistics for England every year and this is the 22nd . They include figures from the previous year, in this case 2009/10 and projections for the next one. So here are some questions to test your knowledge of the sector:
A: What proportion of council funding comes from central government?
B: What percentage of total spending goes on education and social services?
C: What was the total local government spend for 2009/10?
D: What percentage of total public spending goes on local government?
E: How much does local government cost each taxpayer after taking out non-grant funding?
F: By how much has Band D council tax increased since it started in 1993?
Did you get them right?
Here are the answers: A: Two thirds. B: 54%. C: £168bn. D: a quarter. E: £2,490. F: 2.3 times the rate of inflation.
For these and other fascinating facts and figures just go to our Intelligence section on the website for a summary and link to the full report at http://www.info4local.gov.uk/documents/publications/1912292
Tuesday, 31 May 2011
Knocking councils is wasting money
Last week I chaired some sessions at the LG Comms conferenc of public sector heads in Nottingham. A key topic was how to handle the negative spinning in selected media about councils, sometimes inspired by tip-offs from ministers and their advisers. The conclusion was that it is difficult, not least because by the time councils respond to the story it has moved on and because defending their case sounds like whingeing or worse, defending the indefensible. It is for example pretty well impossible to defend salaries and any PR advice is don't bother. Most of the public would regard £40k a year as a pretty good whack. A street vox pop on what would be a reasonable salary for a senior council official would I suspect produce a similar view. Try therefore in the media to argue that £150k or £200k is a fair rate for the job and you are on a different planet to your audience.
There are two observations I would like to make on this. The first is why it is that council senior salaries are singled out in the media when those in other parts of the public sector are often on similar packages. For example I was curious to read the other day in a national daily newspaper a story about a well-performing higher education college whose principal was on over £200k. The journalist mentioned it in passing in what was otherwise a supportive article. Can you imagine a similar approach to a story about a well-run council?
Secondly, the negative spinning in the media has an effect on morale further down the hierarchy. If the national media, inspired by tip-offs from politicians and their paid lackeys, trashes the local government sector then inevitably its staff feel the backlash. Last week I happened also to chair one of our regular round table discussions with chief executives and the subject of media attacks came up. All of them said that to get through the difficult period of cuts they needed motivated staff - as indeed would any organisation during challenging times - and that the current climate of attacking councils for being wasteful or over-paid was devaluing what the frontline was doing. Motivated staff save money, provide ideas, innovate. Denigrating the sector is demotivating them and therefore wasting money.
So next time ministers and their taxpayer-funded advisers plant knocking stories in favoured media just think how much money they are causing to be wasted.
There are two observations I would like to make on this. The first is why it is that council senior salaries are singled out in the media when those in other parts of the public sector are often on similar packages. For example I was curious to read the other day in a national daily newspaper a story about a well-performing higher education college whose principal was on over £200k. The journalist mentioned it in passing in what was otherwise a supportive article. Can you imagine a similar approach to a story about a well-run council?
Secondly, the negative spinning in the media has an effect on morale further down the hierarchy. If the national media, inspired by tip-offs from politicians and their paid lackeys, trashes the local government sector then inevitably its staff feel the backlash. Last week I happened also to chair one of our regular round table discussions with chief executives and the subject of media attacks came up. All of them said that to get through the difficult period of cuts they needed motivated staff - as indeed would any organisation during challenging times - and that the current climate of attacking councils for being wasteful or over-paid was devaluing what the frontline was doing. Motivated staff save money, provide ideas, innovate. Denigrating the sector is demotivating them and therefore wasting money.
So next time ministers and their taxpayer-funded advisers plant knocking stories in favoured media just think how much money they are causing to be wasted.
Tuesday, 24 May 2011
Will councils ask Mr Bumble for more, please?
Several expert commentators in the past few weeks have murmured warnings that just because councils have set budgets doesn't mean they can meet them. A cursory glance at the business pages of any newspaper will show that private companies set budgets for the year then discover for whatever reason that they are way off target and have to issue profit warnings, sack their chiefs etc. Are councils any different?
Steve Bundred is one of the latest finance experts to warn that budgets squeezed through with great difficulty could well go pear-shaped by the autumn. Most of the salami-slicing has already taken place and there is little scope to return to cutting out more lollipop ladies and voluntary sector grants. The next step, as the mantra goes, is transformation but these savings are long-term.
So far, despite a flurry of headlines about library closures early on in the year, councils and indeed ministers have avoided damaging tales of town hall financial crises and tragic case studies of deprived old folk. But come September and the first councils announce they have run out of money and offer up the begging bowl to Eric Pickles - a very apt Mr Bumble - and ask for more, please and the picture might be different.
Steve Bundred is one of the latest finance experts to warn that budgets squeezed through with great difficulty could well go pear-shaped by the autumn. Most of the salami-slicing has already taken place and there is little scope to return to cutting out more lollipop ladies and voluntary sector grants. The next step, as the mantra goes, is transformation but these savings are long-term.
So far, despite a flurry of headlines about library closures early on in the year, councils and indeed ministers have avoided damaging tales of town hall financial crises and tragic case studies of deprived old folk. But come September and the first councils announce they have run out of money and offer up the begging bowl to Eric Pickles - a very apt Mr Bumble - and ask for more, please and the picture might be different.
Wednesday, 18 May 2011
Planning for the next 12 months
The financial year is six weeks old, but it is too early to say whether the budgets laid out by local authorities across the country will ever be met in this fiscal year, even though everyone agrees the settlement has been brutal. Already, however, the public relations battle is under way.
The DCLG has issued figures maintaining an average per capita spend by local authorities of about £1000 a year, just to ram home its point that local government still has a hefty share of public finances. In the past 10 days, there have been reports from the CBI saying sickness absence levels in the public sector continue to be higher than in the private, and from the right-of-centre Policy Exchange, that even pay is higher in the former than the latter.
The voluntary sector, in addition, which at times seems to think it is excluded from the public sector deficit, maintains that it has taken the hit on those cuts which one might term ‘low hanging fruit’, ie, easy to achieve immediately with no strategic thought of the consequences, a response that, so far, councils have been distressingly willing to implement (page 13). That particular chicken will certainly come home to roost in the years ahead.
Furthermore, some major private sector suppliers express concern that the so-called ‘burning platform’ provided by major spending cuts has still not galvanised councils into making long-term efficiency transformation plans. Some councils have even put major contracts on hold, regarding the spending cuts not so much as an opportunity to reorganise ailing departments but as a reason to postpone decision-making until the dark clouds clear.
The message is that a few weeks into the new financial year finds councils no less under pressure from angry residents, furious voluntary groups, ministers anxious to deflect blame from themselves and private sector suppliers keen to engage in long-term partnerships but finding instead, closed doors.
The last six months have been about retrenchment and the short term, irrespective of the impact on long-standing stakeholders. The next year has to be about looking above the parapet and planning for the longer term.
The DCLG has issued figures maintaining an average per capita spend by local authorities of about £1000 a year, just to ram home its point that local government still has a hefty share of public finances. In the past 10 days, there have been reports from the CBI saying sickness absence levels in the public sector continue to be higher than in the private, and from the right-of-centre Policy Exchange, that even pay is higher in the former than the latter.
The voluntary sector, in addition, which at times seems to think it is excluded from the public sector deficit, maintains that it has taken the hit on those cuts which one might term ‘low hanging fruit’, ie, easy to achieve immediately with no strategic thought of the consequences, a response that, so far, councils have been distressingly willing to implement (page 13). That particular chicken will certainly come home to roost in the years ahead.
Furthermore, some major private sector suppliers express concern that the so-called ‘burning platform’ provided by major spending cuts has still not galvanised councils into making long-term efficiency transformation plans. Some councils have even put major contracts on hold, regarding the spending cuts not so much as an opportunity to reorganise ailing departments but as a reason to postpone decision-making until the dark clouds clear.
The message is that a few weeks into the new financial year finds councils no less under pressure from angry residents, furious voluntary groups, ministers anxious to deflect blame from themselves and private sector suppliers keen to engage in long-term partnerships but finding instead, closed doors.
The last six months have been about retrenchment and the short term, irrespective of the impact on long-standing stakeholders. The next year has to be about looking above the parapet and planning for the longer term.
Thursday, 12 May 2011
Another pop at the public sector
Anything which claims that public sector workers have higher pay or higher sickness levels or better conditions than the private sector seems guaranteed to garner headlines and the report from right of centre Policy Exchange on pay comparisons this week was no different.
Issued on May 9, after the purdah election period was over and the results fully aired in the weekend media, the report Public and private sector terms, conditions and the issue of fairness gained wide coverage on Radio 4’s Today programme as well as in national newspapers.
It argued that the gap between private and public sector pay actually increased – in favour of the public sector - in 2010 despite the pay freeze, mainly because of a continuing fall in wages at the bottom 30% of private sector workers. Only at the top, despite the media focus on public sector chiefs’ pay, was the gap static primarily because of course top private sector remuneration vastly outstrips those in the public sector.
It seems to me that the report can be taken in two ways. There is the obvious angle swallowed by the national media that the public sector is still on a gravy train - and the Policy Exchange is after all a right of centre think tank. Or there is the other angle - that lower paid staff in the private sector had wages, terms and conditions shredded during the recession while public sector staff generally hung onto their packages, despite the two-year pay freeze.
This will not continue. The pay freeze, the proposed raising of pension contributions (though not for lower paid workers), layoffs and reduced terms and conditions all mean a drop in average remuneration for public sector, and in particular council, workers. And while it is true that lower paid manual work tends to be better paid in the public than the private sectors this isn't saying much. Nor is it desirable to increase the impoverishment of lower paid workers by a race to the bottom. If nothing else, lower wages, worse terms and conditions and no pensions will simply transfer the costs to the taxpayer through more housing, council tax and other welfare benefits.
Wednesday, 11 May 2011
What now for refererendums?
Now the AV referendum result is out the way, let local government allow itself a pat on the back at the way it was handled.
While all the focus was on the result, we must not forget the hundreds of managers and council staff who worked to ensure that one of the biggest election days in years – AV, English locals, Scotland, Wales, Northern Ireland, parishes – went off without a hitch. Considering the parliamentary go ahead to the referendum squeezed into legislation back in February hours before its deadline, giving local authorities just weeks to organise it, they did a sterling and, as ever, unsung job.
Long term, what are the implications of the AV result for councils?
The average turnout of 42% did not suggest, as initially feared, that there was overwhelming apathy, although no-one could accuse the campaigns of being anything other than lacklustre – and nor is 42% a figure that suggests the nation has fallen in love with referendums.
But, it is highly unlikely we will see another such national poll, although there may well be one in Scotland on independence. For most people, one every 35 years is about the right number. The public do not like being asked to vote on issues it does not regard as vital.
And thereby hangs a problem. For, as Nick Raynsford points out on page 15 in The MJ this week, the Localism Bill does envisage more local referendums in England on council tax rises which are binding on councils.
It also proposes the power for residents to instigate via a petition for local referendums on any other local issue – which are not binding on councils.
The chances of local residents rushing back to the polling booths to register their view on whether a library the other side of the borough should close on alternate Thursdays is unlikely. Nor will councils be exactly falling over themselves to cough up the extra costs of running such polls.
MPs and ministers may want to take another look at this before councils are saddled with another costly and unwanted burden.
While all the focus was on the result, we must not forget the hundreds of managers and council staff who worked to ensure that one of the biggest election days in years – AV, English locals, Scotland, Wales, Northern Ireland, parishes – went off without a hitch. Considering the parliamentary go ahead to the referendum squeezed into legislation back in February hours before its deadline, giving local authorities just weeks to organise it, they did a sterling and, as ever, unsung job.
Long term, what are the implications of the AV result for councils?
The average turnout of 42% did not suggest, as initially feared, that there was overwhelming apathy, although no-one could accuse the campaigns of being anything other than lacklustre – and nor is 42% a figure that suggests the nation has fallen in love with referendums.
But, it is highly unlikely we will see another such national poll, although there may well be one in Scotland on independence. For most people, one every 35 years is about the right number. The public do not like being asked to vote on issues it does not regard as vital.
And thereby hangs a problem. For, as Nick Raynsford points out on page 15 in The MJ this week, the Localism Bill does envisage more local referendums in England on council tax rises which are binding on councils.
It also proposes the power for residents to instigate via a petition for local referendums on any other local issue – which are not binding on councils.
The chances of local residents rushing back to the polling booths to register their view on whether a library the other side of the borough should close on alternate Thursdays is unlikely. Nor will councils be exactly falling over themselves to cough up the extra costs of running such polls.
MPs and ministers may want to take another look at this before councils are saddled with another costly and unwanted burden.
Thursday, 5 May 2011
Opening up the White Paper
Readers of The MJ will, of course, be unsurprised at media stories this week suggesting PM David Cameron’s much-trailed and much-delayed White Paper on opening up public services will be less privatising than originally suggested.
Back in February when the story of a ‘radical, privatising’ paper was first floated in the Daily Telegraph, causing an inevitable union backlash, The MJ pointed out that the paper was actually much less dramatic than its interpretation (24 February). In March, The MJ quoted DCLG minister, Greg Clark – who is presenting a report on decentralisation to the prime minister in the summer – equally denying that the White Paper would mean full-scale privatisation.
This week’s BBC ‘leak’ of discussions between Cabinet Office minister, Francis Maude, and the CBI, quotes the former saying the coalition was against full-scale privatisation but in favour of more pluralistic delivery. In particular, it wanted more social enterprises and mutuals to take on public services, again a strategy which should come as little surprise to local government, although certainly more so for the health sector.
In The MJ this week (page 16) former Number 10 policy adviser, Dan Corry, warns of the tendency of incoming administrations to issue White Papers about public service reform as a way of making their mark, only to quietly forget about them. The coalition has already shown itself willing to be bold in tackling what it regards as failing public services, such as in welfare, schools, criminal justice and police, and one questions the need for yet another White Paper on more reform in sectors such as local government, where pluralistic delivery is already usual. Indeed, another report this week from Oxford Economics on behalf of the Business Services Association said the UK’s outsourcing industry was now almost as big as the financial sector.
Local government will continue to need the expertise of private partners, especially where investment and technology is required, and no amount of White Papers will make a jot of difference to this trend. Arguments about whether the Government is pro or anti privatisation, and whether the imminent Cameron reform paper means more or less outsourcing is political background noise.
Back in February when the story of a ‘radical, privatising’ paper was first floated in the Daily Telegraph, causing an inevitable union backlash, The MJ pointed out that the paper was actually much less dramatic than its interpretation (24 February). In March, The MJ quoted DCLG minister, Greg Clark – who is presenting a report on decentralisation to the prime minister in the summer – equally denying that the White Paper would mean full-scale privatisation.
This week’s BBC ‘leak’ of discussions between Cabinet Office minister, Francis Maude, and the CBI, quotes the former saying the coalition was against full-scale privatisation but in favour of more pluralistic delivery. In particular, it wanted more social enterprises and mutuals to take on public services, again a strategy which should come as little surprise to local government, although certainly more so for the health sector.
In The MJ this week (page 16) former Number 10 policy adviser, Dan Corry, warns of the tendency of incoming administrations to issue White Papers about public service reform as a way of making their mark, only to quietly forget about them. The coalition has already shown itself willing to be bold in tackling what it regards as failing public services, such as in welfare, schools, criminal justice and police, and one questions the need for yet another White Paper on more reform in sectors such as local government, where pluralistic delivery is already usual. Indeed, another report this week from Oxford Economics on behalf of the Business Services Association said the UK’s outsourcing industry was now almost as big as the financial sector.
Local government will continue to need the expertise of private partners, especially where investment and technology is required, and no amount of White Papers will make a jot of difference to this trend. Arguments about whether the Government is pro or anti privatisation, and whether the imminent Cameron reform paper means more or less outsourcing is political background noise.
Wednesday, 6 April 2011
Growth versus the NIMBY-ism agenda
It has been entertaining watching BBC Four’s The Secret World Of Whitehall, if only to marvel at how any business in government is achieved at all, considering the process and bureaucracy entailed in making even the simplest decisions.
One of the comments made by a Cabinet minister interviewed was how often civil servants would suck in their breath with, ‘are you sure you want to do this, minister?’
Of course, all this process is done for very good reasons, as Sir Humphrey might say, namely, to ensure that government works as a well-oiled machine. Really? I wonder what Sir H would have made of the health Bill, now put on hold while minister Andrew Lansley is taken behind the Number 10 bike sheds?
Or how about the abolition of the Audit Commission, leaked out one soporific August afternoon last summer, and now causing some considerable angst as ministers work out how what to replace it.
Or the Localism Bill, with its lead minister, Eric Pickles, extolling all-power to the neighbourhoods and running slap up against chancellor George Osborne’s drive for growth and never mind what the NIMBYs think.
Ex-minister Nick Raynsford, who has had long experience of working with Whitehall, reveals this week in The MJ (this page) that a massive battle is going on behind the scenes between the DCLG and the Treasury over the Localism Bill.
We know that numerous housing projects have already been canned since the abolition of spatial targets, and the Treasury – and developers – are deeply concerned that the Government’s drive to create more jobs and regeneration will hit a brick wall of NIMBYs empowered by the neighbourhood clauses in the Bill.
The prime minister has already forced one Cabinet minister, Mr Lansley, to put his health Bill on hold. It is hard to see Mr Osborne not getting his way on the growth agenda on which the Government is placing so much of its credibility. For if more private sector jobs are not created to fill the gap left by public sector cuts, then its economic strategy is in shreds.
As Sir Humphrey might have said: ‘Are you sure you want to do this, Mr Pickles?’
One of the comments made by a Cabinet minister interviewed was how often civil servants would suck in their breath with, ‘are you sure you want to do this, minister?’
Of course, all this process is done for very good reasons, as Sir Humphrey might say, namely, to ensure that government works as a well-oiled machine. Really? I wonder what Sir H would have made of the health Bill, now put on hold while minister Andrew Lansley is taken behind the Number 10 bike sheds?
Or how about the abolition of the Audit Commission, leaked out one soporific August afternoon last summer, and now causing some considerable angst as ministers work out how what to replace it.
Or the Localism Bill, with its lead minister, Eric Pickles, extolling all-power to the neighbourhoods and running slap up against chancellor George Osborne’s drive for growth and never mind what the NIMBYs think.
Ex-minister Nick Raynsford, who has had long experience of working with Whitehall, reveals this week in The MJ (this page) that a massive battle is going on behind the scenes between the DCLG and the Treasury over the Localism Bill.
We know that numerous housing projects have already been canned since the abolition of spatial targets, and the Treasury – and developers – are deeply concerned that the Government’s drive to create more jobs and regeneration will hit a brick wall of NIMBYs empowered by the neighbourhood clauses in the Bill.
The prime minister has already forced one Cabinet minister, Mr Lansley, to put his health Bill on hold. It is hard to see Mr Osborne not getting his way on the growth agenda on which the Government is placing so much of its credibility. For if more private sector jobs are not created to fill the gap left by public sector cuts, then its economic strategy is in shreds.
As Sir Humphrey might have said: ‘Are you sure you want to do this, Mr Pickles?’
Wednesday, 30 March 2011
Think big on shared budgets
Eric Pickles regards it as ‘the future for public services.’ The DCLG secretary thinks local areas should ‘think big’, and it’s ‘time to let local areas grow up and do things their way.’
Mr Pickles was referring this week to the community budgets pilots which officially launch on Friday. For those of us who believe that innovation in local government did exist before last year’s general election, the community budgets concept has a familiar ring. It used to be called Total Place, which also had pilots, and, indeed, after the pilots reported their findings, a whole programme of action was outlined in detail in the March 2010 Budget, and then disappeared into Whitehall’s filing system.
The problem, of course, is that Total Place was so last year, or at least so last government, and therefore, dropped by the coalition. A few months later, the new ministers decided actually it was quite a good idea after all, and resurrected it, though the words Total Place were banned, and replaced by the much more clumsy-sounding community budgets.
Still, that’s politics, and while momentum was lost, the idea of joining up spending programmes locally still remains not only a very good idea but as Mr Pickles said, the future. There is still far too much time, energy and resources wasted on overlapping agencies, and the pilots are right to focus on problem families which suck in huge sums of public money, often with very little result.
Mr Pickles is also right to say local areas should do this themselves, and it is dispiriting to see how many of the original Total Place pilot areas have failed to follow the logic of their own conclusions, once the Government’s attentions turned elsewhere. We do not need endless, DCLG-inspired pilots. If they believe in them, councils should pursue community budgets/Total Place themselves.
However, it is also true that councils need the Government to order the relevant Whitehall departments to co-operate.
Total Place had commitment at Treasury and Cabinet level. Mr Pickles needs to ensure his Cabinet is now fully behind community budgets or, instead of being the future, they will become just another failed initiative.
Mr Pickles was referring this week to the community budgets pilots which officially launch on Friday. For those of us who believe that innovation in local government did exist before last year’s general election, the community budgets concept has a familiar ring. It used to be called Total Place, which also had pilots, and, indeed, after the pilots reported their findings, a whole programme of action was outlined in detail in the March 2010 Budget, and then disappeared into Whitehall’s filing system.
The problem, of course, is that Total Place was so last year, or at least so last government, and therefore, dropped by the coalition. A few months later, the new ministers decided actually it was quite a good idea after all, and resurrected it, though the words Total Place were banned, and replaced by the much more clumsy-sounding community budgets.
Still, that’s politics, and while momentum was lost, the idea of joining up spending programmes locally still remains not only a very good idea but as Mr Pickles said, the future. There is still far too much time, energy and resources wasted on overlapping agencies, and the pilots are right to focus on problem families which suck in huge sums of public money, often with very little result.
Mr Pickles is also right to say local areas should do this themselves, and it is dispiriting to see how many of the original Total Place pilot areas have failed to follow the logic of their own conclusions, once the Government’s attentions turned elsewhere. We do not need endless, DCLG-inspired pilots. If they believe in them, councils should pursue community budgets/Total Place themselves.
However, it is also true that councils need the Government to order the relevant Whitehall departments to co-operate.
Total Place had commitment at Treasury and Cabinet level. Mr Pickles needs to ensure his Cabinet is now fully behind community budgets or, instead of being the future, they will become just another failed initiative.
Wednesday, 23 March 2011
'Opening up' paper remains firmly shut
Years ago, in 1989, while attending a seminar at the Institute of Economic Affairs, then the intellectual power-house of Thatcherism, I recall being struck by how its disciples, having opened up local government to market forces, now regarded the NHS as the next big challenge. In the end it was too big even for the IEA.
Fast-forward 22 years, and a Conservative prime minister is grappling again with the same subject, namely, how to bring the private sector into the NHS. And like his predecessors, David Cameron is finding it problematic.
Ostensibly, his much-trailed Open public services White Paper has been delayed until after the May local elections, because of international events. In fact, it is delicate negotiations over the degree of private sector involvement in the NHS and welfare, and how these are to be operated and monitored, which is causing the hold-up.
Mr Cameron has been much exercised by Tony Blair’s comments in his autobiography that he regretted not being more radical about public sector reform. The present PM believes it is unfinished business but he, like his predecessors, is finding it more complex than first envisaged, especially when dealing with the NHS.
Paradoxically, although local government has been bearing the brunt of cuts this year, the sector has been traditionally well advanced in the plurality of its service provision. So, rather than trying to bring in more large-scale private companies to an already-mature market, Messrs Cameron and Pickles instead are keen to open councils up to social enterprises and small private operators. Mr Pickles’ not unexpected announcement to the CBI this week that the two-tier code in local government would go was aimed not at the big half-dozen strategic suppliers but the social enterprise market.
Perhaps this explains the surprise comments to an LGA seminar last week by the otherwise-Blairite Hazel Blears, that social enterprises were merely a stalking horse for full-scale privatisation.
With local elections looming, Labour set for big gains and the Cameron White Paper stuck in the post room, we may well find the 1980s battleground of private v public making a repeat appearance.
Fast-forward 22 years, and a Conservative prime minister is grappling again with the same subject, namely, how to bring the private sector into the NHS. And like his predecessors, David Cameron is finding it problematic.
Ostensibly, his much-trailed Open public services White Paper has been delayed until after the May local elections, because of international events. In fact, it is delicate negotiations over the degree of private sector involvement in the NHS and welfare, and how these are to be operated and monitored, which is causing the hold-up.
Mr Cameron has been much exercised by Tony Blair’s comments in his autobiography that he regretted not being more radical about public sector reform. The present PM believes it is unfinished business but he, like his predecessors, is finding it more complex than first envisaged, especially when dealing with the NHS.
Paradoxically, although local government has been bearing the brunt of cuts this year, the sector has been traditionally well advanced in the plurality of its service provision. So, rather than trying to bring in more large-scale private companies to an already-mature market, Messrs Cameron and Pickles instead are keen to open councils up to social enterprises and small private operators. Mr Pickles’ not unexpected announcement to the CBI this week that the two-tier code in local government would go was aimed not at the big half-dozen strategic suppliers but the social enterprise market.
Perhaps this explains the surprise comments to an LGA seminar last week by the otherwise-Blairite Hazel Blears, that social enterprises were merely a stalking horse for full-scale privatisation.
With local elections looming, Labour set for big gains and the Cameron White Paper stuck in the post room, we may well find the 1980s battleground of private v public making a repeat appearance.
Wednesday, 16 March 2011
The Huttons on pay and pensions
It was canny of ministers to hire the two left-of-centre Huttons to deliver the obvious but highly sensitive conclusions over the future of public sector pay and pensions. The fact they attracted criticisms from both unions and employers, and from left and right, showed they must be doing something right.
Lord Hutton’s report on pensions last week was well trailed and drew predictable criticisms from unions even though there are those who would argue that a retirement age of 68 ‘over time’ is still unaffordable.
Will Hutton’s hefty inquiry into top pay that followed this week was duly slated by unions for not going far enough to curtail senior packages, a verdict supported by sources close to Eric Pickles who insisted that as regards ‘fatcat-bashing’ it will be business as usual. A more ludicrous comment came from the CBI which would have us believe that shareholders in private firms actually have influence over the setting of eye-watering pay at the top of plcs – and that the equivalent in the public sector, the government, should therefore have the final say.
Will Hutton’s report, while recognising that top public sector salaries have indeed soared in recent years, also laid a few old chestnuts to rest, like linking top pay to the notional salary of the Prime Minister, or believing that if only public sector top jobs could be scrapped then frontline services would be safe. Of the country’s top 1% of earners only £1 in every £100 is earned by public sector employees.
But aside from insisting on more performance-related pay Hutton was light on detailed solutions partly because there are no simple answers to what is a complex issue. Top salaries increased for a variety of reasons, not least to do with the late CPA inspection regime, the dwindling pool of talent, and the reluctance of ‘upper tier’ councillors to take risks with candidates not already proven as heads of similar authorities.
While the pay of new entrants is heading downwards, a wave of retirements and reluctance of chief officers to take on the hotseat at the top will again drive up packages. It is after all the law of the market.
Lord Hutton’s report on pensions last week was well trailed and drew predictable criticisms from unions even though there are those who would argue that a retirement age of 68 ‘over time’ is still unaffordable.
Will Hutton’s hefty inquiry into top pay that followed this week was duly slated by unions for not going far enough to curtail senior packages, a verdict supported by sources close to Eric Pickles who insisted that as regards ‘fatcat-bashing’ it will be business as usual. A more ludicrous comment came from the CBI which would have us believe that shareholders in private firms actually have influence over the setting of eye-watering pay at the top of plcs – and that the equivalent in the public sector, the government, should therefore have the final say.
Will Hutton’s report, while recognising that top public sector salaries have indeed soared in recent years, also laid a few old chestnuts to rest, like linking top pay to the notional salary of the Prime Minister, or believing that if only public sector top jobs could be scrapped then frontline services would be safe. Of the country’s top 1% of earners only £1 in every £100 is earned by public sector employees.
But aside from insisting on more performance-related pay Hutton was light on detailed solutions partly because there are no simple answers to what is a complex issue. Top salaries increased for a variety of reasons, not least to do with the late CPA inspection regime, the dwindling pool of talent, and the reluctance of ‘upper tier’ councillors to take risks with candidates not already proven as heads of similar authorities.
While the pay of new entrants is heading downwards, a wave of retirements and reluctance of chief officers to take on the hotseat at the top will again drive up packages. It is after all the law of the market.
Wednesday, 9 March 2011
A gift horse for council tax
This year’s council tax for 2011/12, is not actually a ‘freeze’ but a 2.5% increase, funded centrally.
Using the old adage that it is never wise to look a gift horse in the mouth, those councils which do will rapidly realise that their tax base has been eroded to the extent of whatever increase they might have imposed, had it not been for the bung from the Government, meaning councils’ tax base in 2012/13 will be the same as 2010/11.
Nor is there much science about it. If a council freezes its council tax, it will receive a grant equivalent to a 2.5% increase in its 2010/11 Band D figure. Anything above a freeze negates that grant, so a council would need to be pretty foolhardy to ask its residents to cough up when the Government had been so generous.
Had it not been for the £650m bung, what would have been the likely increases? It is fair to say that most councils – as they did last year – would have tried to stick to about 2.5%, even though this is below inflation.
They are well aware of the difficulties their residents face, and there are also local elections in 280 councils in May. In Wales, where there has been no central funding – but also assembly elections – rises are 3%, so little different than in England.
Of concern, however, is what happens next year, and whether chancellor George Osborne will be prepared to cough up another £650m to prevent rises.
In the past, council tax rises provoked a tug of war between central and local, as our columnist Nick Raynsford will testify from his time as local government minister under Tony Blair – although Mr Osborne, as he showed by putting up VAT, is not himself averse to the idea of raising taxes.
His £650m bung to keep council tax at standstill has certainly averted a major public relations disaster this year, both for the coalition and for local government.
To have services cut and council tax increased at the same time would have been a bridge too far for the public. But long-term questions about funding local services, especially in the light of soaring care bills, remain so far unanswered.
Using the old adage that it is never wise to look a gift horse in the mouth, those councils which do will rapidly realise that their tax base has been eroded to the extent of whatever increase they might have imposed, had it not been for the bung from the Government, meaning councils’ tax base in 2012/13 will be the same as 2010/11.
Nor is there much science about it. If a council freezes its council tax, it will receive a grant equivalent to a 2.5% increase in its 2010/11 Band D figure. Anything above a freeze negates that grant, so a council would need to be pretty foolhardy to ask its residents to cough up when the Government had been so generous.
Had it not been for the £650m bung, what would have been the likely increases? It is fair to say that most councils – as they did last year – would have tried to stick to about 2.5%, even though this is below inflation.
They are well aware of the difficulties their residents face, and there are also local elections in 280 councils in May. In Wales, where there has been no central funding – but also assembly elections – rises are 3%, so little different than in England.
Of concern, however, is what happens next year, and whether chancellor George Osborne will be prepared to cough up another £650m to prevent rises.
In the past, council tax rises provoked a tug of war between central and local, as our columnist Nick Raynsford will testify from his time as local government minister under Tony Blair – although Mr Osborne, as he showed by putting up VAT, is not himself averse to the idea of raising taxes.
His £650m bung to keep council tax at standstill has certainly averted a major public relations disaster this year, both for the coalition and for local government.
To have services cut and council tax increased at the same time would have been a bridge too far for the public. But long-term questions about funding local services, especially in the light of soaring care bills, remain so far unanswered.
Wednesday, 2 March 2011
Cuts to the third sector
The scale of spending reductions to local government and the way they are front-loaded means not only cuts to frontline services but also cuts to whatever can easily yield immediate savings in time for the 2011/12 financial year.
This is almost certainly neither sensible nor strategic but, in the short timeframe between the grant settlement in December and the new year in April, there is little else.
Inevitably, the voluntary sector has been hit, but some of these groups seem to live in another world where the budget deficit passes them by, leaving their funding untouched. They are part of the public sector and the public sector is being cut, irrespective of fairness. As The MJ’s front page story shows, cutting all managers’ salaries and back offices would still not avoid the need to cut frontline services.
However, local authorities operate in a political climate, and cuts to voluntary sector funding are doing them no favours whatsoever in the corridors of Westminster. Such cuts – some of them clumsy – have severely embarrassed the Government by turning Big Society into an apparent sham. Ministers do not like being left with egg on their faces.
In his address to the voluntary sector, Mr Pickles this week reflected this fury at local government by warning he would use unspecified powers to force them to stop making ‘disproportionate’ cuts to voluntary groups.
Much more ominous was his comment that councils would be judged on their relationship with their local voluntary sector, ‘a key test of whether councils are ready for independent, responsible leadership.’ In other words, like many secretaries of state before him, Mr Pickles is discovering that councils have an irritating habit of doing their own thing, irrespective of government policy and that maybe, after all, centralism has its advantages.
The voluntary sector has a key long-term role earmarked in local service delivery, irrespective of the cuts. Mr Pickles’ view that localism means councils passing on powers to the third sector will have been only increased by the recent Big Society cuts row.
Councils have often had little choice in cutting grants to voluntary groups. But in a harsh political climate, the damage has been as much to their own reputation and lobbying power as to the third sector.
This is almost certainly neither sensible nor strategic but, in the short timeframe between the grant settlement in December and the new year in April, there is little else.
Inevitably, the voluntary sector has been hit, but some of these groups seem to live in another world where the budget deficit passes them by, leaving their funding untouched. They are part of the public sector and the public sector is being cut, irrespective of fairness. As The MJ’s front page story shows, cutting all managers’ salaries and back offices would still not avoid the need to cut frontline services.
However, local authorities operate in a political climate, and cuts to voluntary sector funding are doing them no favours whatsoever in the corridors of Westminster. Such cuts – some of them clumsy – have severely embarrassed the Government by turning Big Society into an apparent sham. Ministers do not like being left with egg on their faces.
In his address to the voluntary sector, Mr Pickles this week reflected this fury at local government by warning he would use unspecified powers to force them to stop making ‘disproportionate’ cuts to voluntary groups.
Much more ominous was his comment that councils would be judged on their relationship with their local voluntary sector, ‘a key test of whether councils are ready for independent, responsible leadership.’ In other words, like many secretaries of state before him, Mr Pickles is discovering that councils have an irritating habit of doing their own thing, irrespective of government policy and that maybe, after all, centralism has its advantages.
The voluntary sector has a key long-term role earmarked in local service delivery, irrespective of the cuts. Mr Pickles’ view that localism means councils passing on powers to the third sector will have been only increased by the recent Big Society cuts row.
Councils have often had little choice in cutting grants to voluntary groups. But in a harsh political climate, the damage has been as much to their own reputation and lobbying power as to the third sector.
Wednesday, 23 February 2011
A revolution or a mild adjustment?
The prime minister’s article in the Daily Telegraph on Monday this week, about bringing a bigger private sector role into public services, is a classic example of two-plus-two making whatever anyone wants it to be, six, 12 or 23.
The right of centre immediately welcomed David Cameron’s comments as a code for backing wholesale privatisation, while unions and the left vowed to fight to the death this apparent commitment to returning to the days of Thatcherite compulsory competitive tendering.
The reality is more prosaic. The prime minister did not announce a dramatic new policy outside reforms already announced, other than to suggest a ‘presumption’ in favour of making public services ‘open to a range of providers,’ a comment which, by Tuesday, Number 10 was downplaying. Downing Street also confirmed that earlier plans for quotas of public services to be delivered by the private or voluntary sectors would be dropped in the forthcoming Open public services White Paper, out in the next fortnight, to which Mr Cameron had alluded.
Local government already has a plurality of service providers. If it did not, then it would have escaped the odium of making cuts to voluntary sector contracts. In education, free schools and academies are already up and running. Health is still largely a single provider but is, anyway, haring off in a different direction with the health reforms handing powers to GPs.
Councils will continue to operate as at present, namely, at different speeds. Neither the voluntary nor private sectors will be remotely interested if there is no or little money attached to their provision of services. Small firms and local groups will lack the economies of scale to make the necessary upfront investment required to make structural long-term savings. The private sector itself will always cherry-pick the big contracts. Councils will retain accountability for lack of anyone else to fill the gap and, as a result, the buck will continue to stop with them.
There will be changes, although not as much as the right and left have assumed from Mr Cameron’s comments.
The right of centre immediately welcomed David Cameron’s comments as a code for backing wholesale privatisation, while unions and the left vowed to fight to the death this apparent commitment to returning to the days of Thatcherite compulsory competitive tendering.
The reality is more prosaic. The prime minister did not announce a dramatic new policy outside reforms already announced, other than to suggest a ‘presumption’ in favour of making public services ‘open to a range of providers,’ a comment which, by Tuesday, Number 10 was downplaying. Downing Street also confirmed that earlier plans for quotas of public services to be delivered by the private or voluntary sectors would be dropped in the forthcoming Open public services White Paper, out in the next fortnight, to which Mr Cameron had alluded.
Local government already has a plurality of service providers. If it did not, then it would have escaped the odium of making cuts to voluntary sector contracts. In education, free schools and academies are already up and running. Health is still largely a single provider but is, anyway, haring off in a different direction with the health reforms handing powers to GPs.
Councils will continue to operate as at present, namely, at different speeds. Neither the voluntary nor private sectors will be remotely interested if there is no or little money attached to their provision of services. Small firms and local groups will lack the economies of scale to make the necessary upfront investment required to make structural long-term savings. The private sector itself will always cherry-pick the big contracts. Councils will retain accountability for lack of anyone else to fill the gap and, as a result, the buck will continue to stop with them.
There will be changes, although not as much as the right and left have assumed from Mr Cameron’s comments.
Wednesday, 16 February 2011
The silo mentality remains an issue
In hindsight, the last 10 days’ uproar over council cuts to the voluntary sector and the threat to Big Society may be seen as the time when Number 10 fell out of love with localism.
It will have dawned on the prime minister and his advisers in the past fortnight that once you start ring-fencing specific major services from cuts, such as schools and health, then you must either ring-fence all the remaining services or expect them to disappear as councils struggle to reduce budgets by one-quarter in two years.
One can imagine David Cameron charging about Number 10 wanting to know why Sure Start centres face the chop or community projects are axed, and why their funds were not also ring-fenced and how come no-one warned him?
The frustration was evident in his Big Society comeback speech on Monday. During questions, Mr Cameron, whose knowledge of local government appears to be based on his constituency district of West Oxfordshire – which he praised for not cutting grants to the local Citizens’ Advice Bureau – remarked: ‘Not all local authorities are behaving in the same way.
‘This is a democracy, not a dictatorship. I cannot order every local authority what to do with their budget.’
He could, of course, as other governments have done, but he will not, because the problem is less lack of ring-fencing than lack of funding per se.
Instead, he would be better advised to look at the other end of the telescope, namely Whitehall. As the Total Place pilots found, and as their successors, the 16 community budget pilots will find, there is still too much waste and duplication caused by the silo mentality of Whitehall departments and their reluctance to share budgets locally.
The Government has been curiously reluctant to grasp this nettle, although decentralisation minister, Greg Clark, is certainly rattling cages.
Rather than being frustrated at the impact of council cuts, the prime minister should call Mr Clark in to Number 10, add ‘community budgets minister’ to his brief, and order him to make the pooling of all public sector budgets at local level the coalition’s number one priority.
It will have dawned on the prime minister and his advisers in the past fortnight that once you start ring-fencing specific major services from cuts, such as schools and health, then you must either ring-fence all the remaining services or expect them to disappear as councils struggle to reduce budgets by one-quarter in two years.
One can imagine David Cameron charging about Number 10 wanting to know why Sure Start centres face the chop or community projects are axed, and why their funds were not also ring-fenced and how come no-one warned him?
The frustration was evident in his Big Society comeback speech on Monday. During questions, Mr Cameron, whose knowledge of local government appears to be based on his constituency district of West Oxfordshire – which he praised for not cutting grants to the local Citizens’ Advice Bureau – remarked: ‘Not all local authorities are behaving in the same way.
‘This is a democracy, not a dictatorship. I cannot order every local authority what to do with their budget.’
He could, of course, as other governments have done, but he will not, because the problem is less lack of ring-fencing than lack of funding per se.
Instead, he would be better advised to look at the other end of the telescope, namely Whitehall. As the Total Place pilots found, and as their successors, the 16 community budget pilots will find, there is still too much waste and duplication caused by the silo mentality of Whitehall departments and their reluctance to share budgets locally.
The Government has been curiously reluctant to grasp this nettle, although decentralisation minister, Greg Clark, is certainly rattling cages.
Rather than being frustrated at the impact of council cuts, the prime minister should call Mr Clark in to Number 10, add ‘community budgets minister’ to his brief, and order him to make the pooling of all public sector budgets at local level the coalition’s number one priority.
Wednesday, 9 February 2011
Pressure mounts from the cuts
As night follows day, it was inevitable that however prepared chief executives maintained they were for the spending cuts, and however much planning they had put in, the end result would be last-minute slash and burn, dramatic job cuts, and salami-slicing of services. After all, the CSR was only in October, the settlement in December, the front-loading much harsher than anticipated, and the new financial year less than two months away.
So, is it a surprise that councils have opted to cut whatever delivers immediate savings, irrespective of their impact, whether community grants, third sector funding, lollipop ladies, streetlighting or branch libraries?
Depressingly, no. And should the Government be taken aback that its much-vaunted Big Society idea has also been cut off at the knees, along with council funding? Of course not. And should communities secretary, Eric Pickles, as has been suggested in some quarters, take the rap from the PM for not doing more to stop council cuts to the voluntary sector? Again, no. He is supposed to be a localist.
If I may be allowed to name drop, at a magazine editors’ reception at Number 10 last week, I managed to grab a few seconds with the prime minister, and observed that the council cuts were ‘not very strategic’, to which he replied: ‘That’s down to councils.’
The cuts are indeed down to councils, although the reason for making them is very much government macro-economic policy, and the PM can hardly wash his hands of them. (Incidentally, David Cameron’s response to my suggestion that if Whitehall and public sector budgets were more joined up, then big savings could still be made was to say, ‘Eric Pickles is doing a fine job’).
However, the PM is right in that the localist agenda – such as the removal of ring-fencing - means councils taking responsibility for making unpalatable decisions. Having handed them a brutal settlement in one hand, and pledges on localism in the other, the Government has no alternative but to tough it out.
If it truly believes in localism, then it must leave councils to make the decision on cuts, however un-strategic and salami-slicing they may be.
So, is it a surprise that councils have opted to cut whatever delivers immediate savings, irrespective of their impact, whether community grants, third sector funding, lollipop ladies, streetlighting or branch libraries?
Depressingly, no. And should the Government be taken aback that its much-vaunted Big Society idea has also been cut off at the knees, along with council funding? Of course not. And should communities secretary, Eric Pickles, as has been suggested in some quarters, take the rap from the PM for not doing more to stop council cuts to the voluntary sector? Again, no. He is supposed to be a localist.
If I may be allowed to name drop, at a magazine editors’ reception at Number 10 last week, I managed to grab a few seconds with the prime minister, and observed that the council cuts were ‘not very strategic’, to which he replied: ‘That’s down to councils.’
The cuts are indeed down to councils, although the reason for making them is very much government macro-economic policy, and the PM can hardly wash his hands of them. (Incidentally, David Cameron’s response to my suggestion that if Whitehall and public sector budgets were more joined up, then big savings could still be made was to say, ‘Eric Pickles is doing a fine job’).
However, the PM is right in that the localist agenda – such as the removal of ring-fencing - means councils taking responsibility for making unpalatable decisions. Having handed them a brutal settlement in one hand, and pledges on localism in the other, the Government has no alternative but to tough it out.
If it truly believes in localism, then it must leave councils to make the decision on cuts, however un-strategic and salami-slicing they may be.
Wednesday, 2 February 2011
A rethink on pension costs
It is true that public sector pensions are generous because they are based on final salaries at a time when such private sector schemes are disappearing down the plughole.
But it is also true the average payment is about £4,000, reflecting the high number of lower-paid staff in the sector. And it is true that pushing local government employee contribution rates up to 11% on salaries of between £31,501 to £42,000 – just the middle income bracket most squeezed by inflation and tax hikes – is an unnecessary and provocative act by the Government which has now had second thoughts.
The decision to raise contributions by 3.2% over three years from 2012 – to raise £900m from the local government scheme alone from 6.6% average contributions to 9.6% – was made in the Spending Review last October, and was clearly driven by the deficit-reduction agenda and by media headlines over ‘fat cat pensions’, rather than by any long-term strategy to reduce the cost of such pensions to the taxpayer.
It is unnecessary because Lord Hutton’s inquiry, due to report in March, will almost certainly recommend sweeping changes to public sector pensions. This will include pensions based on career average rather than final salary, which will hit high-earners but make little difference to low and middle earners. It may well include proposals for increases in contributions.
The decision to raise contributions is provocative because the increases fail to take into account how much public sector staff are bearing the brunt of deficit reduction.
Apart from inflation and tax rises, public sector employees are also on pay freezes set to last at least another year. Furthermore, the planned rises will take contributions to the point where many younger employees – however unwisely – will choose to drop out of the scheme rather than pay 10% of their salaries, thereby worsening the funding situation.
The low-key decision to postpone an announcement from March to June about just how the details of the rises would be worked out suggests a sensible rethink at the Cabinet Office.
Don’t be surprised if the rises are quietly shelved altogether, allowing the Hutton review to make the running in future.
But it is also true the average payment is about £4,000, reflecting the high number of lower-paid staff in the sector. And it is true that pushing local government employee contribution rates up to 11% on salaries of between £31,501 to £42,000 – just the middle income bracket most squeezed by inflation and tax hikes – is an unnecessary and provocative act by the Government which has now had second thoughts.
The decision to raise contributions by 3.2% over three years from 2012 – to raise £900m from the local government scheme alone from 6.6% average contributions to 9.6% – was made in the Spending Review last October, and was clearly driven by the deficit-reduction agenda and by media headlines over ‘fat cat pensions’, rather than by any long-term strategy to reduce the cost of such pensions to the taxpayer.
It is unnecessary because Lord Hutton’s inquiry, due to report in March, will almost certainly recommend sweeping changes to public sector pensions. This will include pensions based on career average rather than final salary, which will hit high-earners but make little difference to low and middle earners. It may well include proposals for increases in contributions.
The decision to raise contributions is provocative because the increases fail to take into account how much public sector staff are bearing the brunt of deficit reduction.
Apart from inflation and tax rises, public sector employees are also on pay freezes set to last at least another year. Furthermore, the planned rises will take contributions to the point where many younger employees – however unwisely – will choose to drop out of the scheme rather than pay 10% of their salaries, thereby worsening the funding situation.
The low-key decision to postpone an announcement from March to June about just how the details of the rises would be worked out suggests a sensible rethink at the Cabinet Office.
Don’t be surprised if the rises are quietly shelved altogether, allowing the Hutton review to make the running in future.
Wednesday, 26 January 2011
Business goes on as the cuts bite
The tragic story of Riven Vincent, the mother of a severely-disabled child who told the website Mumsnet last week that she could no longer cope, drew attention to at least two fundamental issues other than her own personal circumstances.
The first was that the media onslaught was aimed squarely at the prime minister rather than the mother’s local authority, even though, technically, it was the latter’s responsibility. Indeed, the media rather buried the local authority angle since it muddied their line that it was David Cameron’s fault for promising to protect disability care services – when he met the mother during the election – and then not delivering.
This sets an uncomfortable precedent for the coalition which has striven, so far, to devolve the decision-making and the odium about cuts to councils. For while there will be many more tragic individual cases blame for their predicament looks set to be laid at the door of Number 10, not the civic centre.
Second, the case of Ms Vincent reminded the public of the huge and rising bill for children’s services, and the difficulty of containing costs, let alone reducing them, despite swingeing budget cuts.
It is appalling that families with severely-disabled children – already victims – find themselves further victimised through spending cuts. Nor will Ofsted allow any reduction in safeguarding services after the Baby Peter case.
So, what does it imply? As one county chief executive said to me: ‘When it comes to closing a branch library or protecting child safeguarding services, of course, I’ll do the latter.’ Another said to me: ‘As a county, we will become little more than an agency for safeguarding vulnerable children and adults.’ Recent council budgets announced for 2011 show them making strenuous efforts to maintain children’s services budgets or, in some cases, increase them.
The public, however, remain generally ignorant of how much of their council’s budget is swallowed up by children’s – and adult care – services. All they see are their favourite local amenities being cut from parks to libraries to community centre grants. The tragic case of Ms Vincent should focus the minds of national politicians on how children’s services can be adequately funded without laying waste to all other council services.
The first was that the media onslaught was aimed squarely at the prime minister rather than the mother’s local authority, even though, technically, it was the latter’s responsibility. Indeed, the media rather buried the local authority angle since it muddied their line that it was David Cameron’s fault for promising to protect disability care services – when he met the mother during the election – and then not delivering.
This sets an uncomfortable precedent for the coalition which has striven, so far, to devolve the decision-making and the odium about cuts to councils. For while there will be many more tragic individual cases blame for their predicament looks set to be laid at the door of Number 10, not the civic centre.
Second, the case of Ms Vincent reminded the public of the huge and rising bill for children’s services, and the difficulty of containing costs, let alone reducing them, despite swingeing budget cuts.
It is appalling that families with severely-disabled children – already victims – find themselves further victimised through spending cuts. Nor will Ofsted allow any reduction in safeguarding services after the Baby Peter case.
So, what does it imply? As one county chief executive said to me: ‘When it comes to closing a branch library or protecting child safeguarding services, of course, I’ll do the latter.’ Another said to me: ‘As a county, we will become little more than an agency for safeguarding vulnerable children and adults.’ Recent council budgets announced for 2011 show them making strenuous efforts to maintain children’s services budgets or, in some cases, increase them.
The public, however, remain generally ignorant of how much of their council’s budget is swallowed up by children’s – and adult care – services. All they see are their favourite local amenities being cut from parks to libraries to community centre grants. The tragic case of Ms Vincent should focus the minds of national politicians on how children’s services can be adequately funded without laying waste to all other council services.
Wednesday, 19 January 2011
Business goes on as the cuts bite
It is right that the LGA should be bolshy about the financial settlement for local government. The sector has been stuffed, and as the full impact of the settlement percolates through departmental budgets, the reality is worse than it first appeared.
Even in the past few days on the circuit, all the chief executives can talk about is how many redundancies they are conducting and whether the first year cuts are 10%, 20% – or, as two district chiefs told me this week, 40%.
PM David Cameron’s speech to the RSA this week maintaining that public spending would be the same as 2006 earned a riposte from one district chief to me that in his council’s case, the 2011 budget took it back to 1997.
Meanwhile, because councils always do what they are told, business has to go on. So, for example, this week, SOLACE’s annual election conference was packed with anxious chiefs, because on 5 May, there is the perfect storm of not only elections in 280 English councils, but polls for the parliament in Scotland, assemblies in Wales and Northern Ireland, four mayoral elections and last, but definitely not least, the UK-wide referendum for a new voting system (subject to legislation passing).
All of this is the responsibility of council chief executives and electoral administrators, none of whom can afford any more repeats of queues at polling booths, as happened last May.
Even although turnout for the referendum is expected to be 30%, there is still the risk of students deliberately causing chaos by turning up en masse to polling stations 10 minutes before they close as part of their tuition fees protests.
Admittedly, the Government, conscious of budget cuts, is ensuring the elections are fully funded and, despite slashing public spending, is managing to find some £54m in the otherwise-empty Treasury cupboard to cover council referendum costs.
Even assuming the costs are met, councils are still grappling with severe budget cuts and reduced staffing levels, and need the headache of the referendum like a hole in the head.
But then, getting on with whatever they are asked to do in whatever circumstances and with whatever financial constrains is what councils do and what, it appears, governments expect them to do. For how long is another question.
Even in the past few days on the circuit, all the chief executives can talk about is how many redundancies they are conducting and whether the first year cuts are 10%, 20% – or, as two district chiefs told me this week, 40%.
PM David Cameron’s speech to the RSA this week maintaining that public spending would be the same as 2006 earned a riposte from one district chief to me that in his council’s case, the 2011 budget took it back to 1997.
Meanwhile, because councils always do what they are told, business has to go on. So, for example, this week, SOLACE’s annual election conference was packed with anxious chiefs, because on 5 May, there is the perfect storm of not only elections in 280 English councils, but polls for the parliament in Scotland, assemblies in Wales and Northern Ireland, four mayoral elections and last, but definitely not least, the UK-wide referendum for a new voting system (subject to legislation passing).
All of this is the responsibility of council chief executives and electoral administrators, none of whom can afford any more repeats of queues at polling booths, as happened last May.
Even although turnout for the referendum is expected to be 30%, there is still the risk of students deliberately causing chaos by turning up en masse to polling stations 10 minutes before they close as part of their tuition fees protests.
Admittedly, the Government, conscious of budget cuts, is ensuring the elections are fully funded and, despite slashing public spending, is managing to find some £54m in the otherwise-empty Treasury cupboard to cover council referendum costs.
Even assuming the costs are met, councils are still grappling with severe budget cuts and reduced staffing levels, and need the headache of the referendum like a hole in the head.
But then, getting on with whatever they are asked to do in whatever circumstances and with whatever financial constrains is what councils do and what, it appears, governments expect them to do. For how long is another question.
Wednesday, 12 January 2011
The smear campaign against councils
It was inevitable that a row about whose responsibility it is for service cuts – local or central government – would surface, once the full implication of last month’s settlement on individual budgets was clear.
It was also obvious the dark arts of media spinning would come into play.
The coalition’s approach is to pass the buck to local government under the guise of localism. So all cuts are, therefore, a local issue, and ministers are mere bystanders who have devolved powers and can, therefore, not be blamed for what ensues. Fair enough. Councils back localism, accept they are having to shoulder a large burden of deficit-reduction, and agree it is up to them how they make difficult decisions about priorities.
However, it is not unreasonable to ask that ministers, in turn, practice what they preach on localism. It would even be nice to hear some praise from time to time, considering the reductions councils are being expected to bear.
In fact, what we have been seeing in the past few weeks is a drip-drip trashing of the sector through selected sympathetic media. The latest example was in a Sunday newspaper last weekend, suggesting that councils were hiking fees and charges – or what it called ‘stealth taxes’ – to pay for managers’ salaries and pensions. This followed ministerial claims that rubbish was not being collected for as much as a month over Christmas, which was hotly denied by the LGA. Then there was the usual assault on senior salaries, with ministerial complaints that only a handful of chiefs had taken pay cuts.
Personally, I believe raising fees and charges well above inflation is a bad idea for councils, poisoning relations with residents and yielding diminishing returns as it meets consumer resistance. But that is their choice. It certainly hasn’t stopped the train operators, Transport for London, energy utilities, credit card issuers, oil companies, and the chancellor from whacking above-inflation rises on the public.
Ministers should make a New Year’s resolution to let local authorities decide their own priorities – rightly or wrongly – and accept councils are grappling with the biggest funding cuts in decades, and could do with the occasional word of encouragement.
It was also obvious the dark arts of media spinning would come into play.
The coalition’s approach is to pass the buck to local government under the guise of localism. So all cuts are, therefore, a local issue, and ministers are mere bystanders who have devolved powers and can, therefore, not be blamed for what ensues. Fair enough. Councils back localism, accept they are having to shoulder a large burden of deficit-reduction, and agree it is up to them how they make difficult decisions about priorities.
However, it is not unreasonable to ask that ministers, in turn, practice what they preach on localism. It would even be nice to hear some praise from time to time, considering the reductions councils are being expected to bear.
In fact, what we have been seeing in the past few weeks is a drip-drip trashing of the sector through selected sympathetic media. The latest example was in a Sunday newspaper last weekend, suggesting that councils were hiking fees and charges – or what it called ‘stealth taxes’ – to pay for managers’ salaries and pensions. This followed ministerial claims that rubbish was not being collected for as much as a month over Christmas, which was hotly denied by the LGA. Then there was the usual assault on senior salaries, with ministerial complaints that only a handful of chiefs had taken pay cuts.
Personally, I believe raising fees and charges well above inflation is a bad idea for councils, poisoning relations with residents and yielding diminishing returns as it meets consumer resistance. But that is their choice. It certainly hasn’t stopped the train operators, Transport for London, energy utilities, credit card issuers, oil companies, and the chancellor from whacking above-inflation rises on the public.
Ministers should make a New Year’s resolution to let local authorities decide their own priorities – rightly or wrongly – and accept councils are grappling with the biggest funding cuts in decades, and could do with the occasional word of encouragement.
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