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.

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.

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.

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.

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.

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.