Mike Burton's MJ Blog

Councils will not turn down the tax freeze offer

2011-11-24T03:07:00.000-08:00

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.

Councils should get on with their own community budget plans despite the pilots

2011-11-11T04:27:00.000-08:00

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.

More redundancies means less paying members in the pension scheme

2011-10-26T08:54:00.000-07:00

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 impact of quantitative easing

2011-10-07T04:56:00.000-07:00

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?

The Osborne council tax freeze bung

2011-10-03T03:19:00.000-07:00

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?

Clegg plays to the Lib Dem gallery in fast tracking 40 infrastructure projects

2011-09-16T03:32:00.000-07:00

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.

Has the government run out of steam already?

2011-08-31T03:15:00.000-07:00

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.

Opening up public services

2011-08-06T11:44:00.001-07:00

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!

The GDP figures and Osborne's public spending plans

2011-07-26T09:33:00.000-07:00

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.

More adoption could save in the long term

2011-07-05T07:23:00.000-07:00

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!

Conclusions from the LGA conference

2011-07-03T03:39:00.001-07:00

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.

Is global capitalism against the public sector?

2011-06-16T04:48:00.000-07:00

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.

How good are you on your key stats?

2011-06-01T07:30:00.000-07:00

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

Knocking councils is wasting money

2011-05-31T01:17:00.000-07:00

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?

2011-05-24T08:53:00.000-07:00

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

2011-05-18T03:47:00.001-07:00

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

2011-05-12T03:52:00.000-07:00

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?

2011-05-11T03:05:00.001-07:00

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

2011-05-05T04:27:00.001-07:00

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.

Growth versus the NIMBY-ism agenda

2011-04-06T04:54:00.000-07:00

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?’

Think big on shared budgets

2011-03-30T03:20:00.001-07:00

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.

'Opening up' paper remains firmly shut

2011-03-23T05:16:00.000-07:00

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.

The Huttons on pay and pensions

2011-03-16T04:16:00.000-07:00

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.

A gift horse for council tax

2011-03-09T05:15:00.001-08:00

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.

Cuts to the third sector

2011-03-02T04:27:00.000-08:00

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.

A revolution or a mild adjustment?

2011-02-23T04:10:00.000-08:00

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 silo mentality remains an issue

2011-02-16T03:52:00.001-08:00

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.

Pressure mounts from the cuts

2011-02-09T06:29:00.000-08:00

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.

A rethink on pension costs

2011-02-02T05:31:00.001-08:00

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.

Business goes on as the cuts bite

2011-01-26T02:49:00.000-08:00

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.

Business goes on as the cuts bite

2011-01-19T04:05:00.000-08:00

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.

The smear campaign against councils

2011-01-12T02:58:00.000-08:00

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’s been bad news all along

2010-12-15T04:12:00.000-08:00

The Treasury used to soften public opinion leading up to a Budget by leaking, the previous weekend, dire predictions of tax increases and spending cuts which proved to be groundless, thus leaving the public relieved things were not worse.
In the case of the local government settlement, there has been no attempt to soften opinion. In the weeks before the Comprehensive Spending Review (CSR), there were dire predictions that local government was going to get clobbered. Sure enough, in the CSR, local government was clobbered. In the run-up to the settlement, there were more predictions that local government would get a hammering in the settlement. This week it did. You could certainly not accuse ministers of spinning. They have never bothered to disguise the fact that local government is the Aunt Sally of public spending cuts, nor deviated from their insistence from day one in power that town and county halls will bear the brunt to spare education, health and international development.
The public themselves are certainly aware that their councils are being squeezed from above. In some cases, they may even have noticed certain services are being curtailed. But, generally, the impact has yet to be truly felt. Even the national media are starting to get bored with stories about branch libraries under threat and potholes unfilled, partly because they ran the same stories the day after the CSR, when local government got its hammering then and partly because they are yet to occur in any quantity. What the media require is human interest – a tragedy, a catastrophe, blame to be apportioned, either to hapless council officials or heartless ministers who have slashed budgets.
But that is in the future and hopefully, never. For the next few weeks, councils will attempt to absorb their revenue downturns with the minimal impact on frontline services. If they can manage, it will be a super-human achievement. If not, then the library cuts and unfilled potholes will be superseded by far bigger stories of strategic service reductions – and ministers will be asking themselves whether, after all, it was a good idea to deal local government such a bad hand.
On that cheery note – a happy Christmas to you all!

Bill for the long term

2010-12-08T04:19:00.001-08:00

In the revolving door that was the secretary of state’s office responsible for local government under Labour (Prescott, Byers, Prescott again, Miliband, Kelly, Blears, Denham) each new incumbent tended to regard having their own white paper as a badge of office.
The coalition in contrast appears to have decided that one local government Bill is quite enough for one Parliament. Considering that it is both unravelling 13 years of Labour policy (and in the case of scrapping the Audit Commission previous Tory policy as well) along with setting out its own stall for local government until 2015 it is hardly surprising the Localism Bill is due to run to 200 clauses. Indeed the diminutive local government minister Bob Neill joked last week at a conference that although he had a copy of the Bill on his desk he could still see over the top of it.
Actually, most of the Localism Bill’s contents have been fairly straightforward to put together and much has already been well trailed. The stumbling block which has delayed its publication to the point at which civil servants fear they might be sharing the Christmas Day turkey with Eric Pickles has been over creating directly elected mayors in the 12 English cities outside London. Big city councils do not like them. They did not like them when they were Tony Blair’s Big Idea a decade ago either. And you can be sure Eric and his team have not been shoe-horning mayors into the Bill only to see the only take-up come from shire districts.
But despite its breadth, will the Bill live up to its name? Despite their insistence on a localist agenda coalition ministers have been tempted so far to intervene on anything from council newspapers and chief executive salaries to council tax levels and fortnightly bin collections. Is Big Society an opportunity or a threat to councils? And the absence of any serious push towards Total Place or community budgeting outside the 16 pilots is disappointing considering how many savings have been identified from previous studies.
However the biggest challenge by far is implementing these changes in the midst of unprecedented cuts in public spending. That will be the real test both for the Bill and for localism.

A little too much of a hurry..?

2010-12-01T04:39:00.000-08:00

As the row over the front-loading of grant cuts rumbles on to the 11th hour of the postponed financial settlement – any bets on publication, Christmas Eve at 11pm? – is this the time to feel a tad sorry for Eric Pickles?
The self-confessed ‘fat man in a hurry’ may have been perhaps a little too hasty when presenting himself before the Star Chamber, back in the autumn. When dealing with the Treasury, it is always wise to a) read the small print on any deal before signing, and b) check your pockets before leaving. These people are past masters at relieving Cabinet ministers of large amounts of cash without them even noticing.
The fact is, Eric has done a sterling job for his coalition and deserves a warming brandy at Chequers from the boss on Christmas Day for the way he volunteered local government for the lion’s share of the cuts in the Spending Review. His Cabinet colleagues, particularly health, the Department for International Development and education, will doubtless have slapped him on the back, relieved that his sacrifice has spared their own.
And to be fair to Eric, he will have returned from his Star Chamber encounter feeling that, while the local government settlement was tough, it was no more than expected by the sector itself – and, indeed, there was the benefit of an extra £1bn for councils to tackle adult care on top.
The problem is the front-loading element of the cuts which Eric and his colleagues now realise is rapidly becoming a large elephant trap, opening out before them. Unfortunately, unlike shoppers buying their Christmas gifts, there is no cooling-off period with the Treasury. The deal has been made and Eric is stuck with it.
He may thrash about, asking councils to look down the backs of their sofas for cash reserves, but as things stand, the front-loading is set to be a massive headache. And just when the bad press starts about library closures, old folk in unheated homes, streetlights turned off and roads pockmarked with holes, Eric will find his Cabinet colleagues are suddenly nowhere to be seen. It’s a brutal world, politics.

A re-appraisal or a U-turn

2010-11-24T04:30:00.001-08:00

Like nature, politics abhors a vacuum. As Ed Miliband is finding, appearing to be doing very little is a sure way of being accused of lacking leadership. The important part of a politician’s job spec is to engage in frenetic activity.
Coalition ministers have certainly been putting this into practice. The last few months have seen a dizzying succession of policy announcements, White Papers and Whitehall restructuring. The Tory conference fringe last month was a hotbed of packed workshops and eager ministerial speakers as the policy pointy-heads feverishly mapped out their plans for the New Age.
So it is perhaps unsurprising that in this bedlam of activity policy has sometimes been made on the hoof or without sufficient thought to the law of unintended consequences (LUC). Last week’s ‘leak’ of plans to fund schools through a new quango caused such an uproar ministers had to backtrack. Over at the CLG, changes to social housing tenancies have quietly contained a get-out clause in case the policy leads to LUC. The abolition of the Audit Commission is going to have huge ramifications for the council audit function.
And ministers are now taking another look at the way council grant cuts have been front-loaded into the first year, hinting that when the settlement appears in a fortnight there could well be flexibilities to spread the pain. Under the Spending Review plans, the gentlest year for cuts is in 2013/14 at 0.8% – nothing to do with county elections of course – compared with a tough 8.4% (and the rest) next year.
There are of course councils who believe it is better to get the pain over and done with rather than drag it out. But it is also clear that swingeing cuts will be on the cards with services slashed, libraries closed, street lights turned off etc and ministers can see themselves on the receiving end of public opprobrium.
Some may call this rethink it a U-turn, others a sensible reappraisal of a complex brief. It is certainly better to make changes before rather than after new policies have been enshrined in law. But hyperactive ministers may also want to ensure that in their eagerness to be pro-active they do not store up problems for themselves in the future when the chickens come home to roost.

Merging members as well as officers

2010-11-17T07:07:00.001-08:00

Local government is not usually a source of rampant controversy in Westminster, except when it comes to reorganisation, which has a brutal history for Conservatives. It scarred MPs and ministers in the early 1990s and it reopened old sores a decade-and-a-half later when Labour planned for the nine new English unitaries, operating from April 2009.
With county Tory leaders keen to see new unitary counties against the policy of Conservative Central Office – which had a protective arm round its district foot soldiers – the scene was set for severe behind-the-scenes arm-twisting. In the end, the Tory front bench could not avoid the creation of unitary counties, but its members were adamantly against any more reorganisation and, indeed, blocked plans in Devon, Norfolk and Suffolk days after forming the coalition last May.
But there are indications that this policy is evolving. First, Conservative ministers are not, in principle, opposed to councils merging and, indeed, they positively encourage it because of the savings generated. Second, mergers are gathering momentum out of sheer economic need and no longer are they confined to cash-strapped districts but spreading to London boroughs. Third, the local government political landscape will start turning red from next spring, and there will be less incentive for the coalition to be quite so bothered about having fewer councils. And fourth, it is difficult to argue that councils should merge managements and services yet retain all the elected members with all their costs.
Some districts are already looking at full member mergers or reducing numbers – as is a unitary such as Telford and Wrekin – so it is unsurprising that the Boundary Commission has now registered this changed scenario and is consulting on how to enable councils to reduce the number of members, if they so wish. Critics will argue this means a diminished democratic capacity, but with some shire districts having the same number of members as London boroughs this is a moot point.
So long as the councils retain their outward-facing identities it is unlikely the public, if consulted during a referendum, will object. It is an inevitable consequence of management mergers.

Increasing fees is not the answer

2010-11-10T04:00:00.001-08:00

It is only half true that the real recession in local government will only bite next year.
For those councils, especially districts, relying for part of their income from fees and charges, the private sector recession which struck in late 2007 saw a sharp downturn in residents’ spending. Westminster City, for example, estimated a drop of £50m in parking charges alone.
The property collapse meant a slump in planning applications and land search income. Cash-strapped residents cut back on swimming or gym use. One district chief executive told me two days after the CSR last month: ‘Two-thirds of my district’s income is in fees and charges, and we were badly hit by the recession.’
The economy remains fragile, the housing market has declined again, disposable income is squeezed by static wages, price rises in petrol, food, energy and clothing, and public spending cuts are giving people the jitters. In short, there is no evidence that residents are any more inclined to shell out more for local services.
So, the survey reported on page one finding that a more than two-thirds of council chiefs expect to see rises in local charges with one-third expecting them to be substantial reveals either naivity about consumer spending or desperation. Unless you are a monopoly, it is difficult to put up prices when there is already price-resistance. Consumers do not have to go swimming, attend adult education classes or park cars in the high street, and nor are they moving house. Jacking-up charges to the point where users simply walk away will only lead councils down the road of withdrawing altogether from such services, leaving pools, gyms and libraries for the private sector to provide or not at all. Maybe then it will dawn on the public that local services they have taken for granted have ceased to exist.
Increasing fees to bring in other income is, like salami-slicing services, only a short-term solution. Councils, aided by new powers of competence, will need to be entrepreneurial, if they are to meet the downturn.

The huge agenda for care services

2010-11-03T05:38:00.000-07:00

This week’s national children and adult services conference in Manchester has been a sell-out, with a message on its website saying no more bookings could be taken – a rare achievement indeed at a time when most public sector association conferences have been struggling with declining delegate numbers.
But, it is not hard to see why such an event should be so popular. Turmoil, upheaval and plain fear stalk the corridors of upper-tier councils when it comes to children and adult care. Most county councils are little more than organisations helping children and vulnerable adults, and to them, as well as unitaries and Mets, both these services represent the budgets most out of control and causing their managements the greatest concern. Ever since the Baby Peter case, the number of children taken back into care has risen, along with the costs. Adult care costs are on an upward curve.
The prospect of more academies and free schools has rattled education authorities, which fear for their very existence as their schools opt out altogether. Against that, the recent and unexpected health White Paper promises huge new opportunities in public health and adult care for councils. And the £2bn for care announced in the CSR was one of the rare items of extra spending, a recognition at least by the coalition that this problem has to be addressed now.
As if this was not enough to fill a conference agenda for a month, mounting concerns over the impact of the housing benefit capping adds another dimension to the care agenda. There is, of course, major politicking going on about this decision, with Tory-controlled central London councils rowing with Labour outer London boroughs about who should pick up the bill for displaced families.
Aside from the politics, the decision poses another headache for councils such as Haringey, already grappling with escalating children’s service budgets and facing an influx of families from more expensive boroughs. One wonders why the Treasury felt that changes to child benefit could wait until 2013 while housing benefit capping, with potentially greater impact, albeit on a smaller number of families, kicks in next April. And as for council tax benefit… but that will have to wait for another conference.

Watch out for the unintended traps

2010-10-27T06:51:00.001-07:00

The law of unintended consequences is a new government’s nightmare, and to mix metaphors, the chickens usually come home to roost a year or two after it has been in power, invariably as a general election looms.
In making its combination of sudden policy shifts, scrapping of quangos and CSR cuts, the coalition has opened itself wide open to the law of unintended consequences (LUC). For example, the abolition of the regional development agencies has raised a sudden question mark over the future of the unallocated EU regional funds, worth a hefty £1.3bn. If the RDAs are going, which organisation is, therefore, placed to assume the regional mantle that EU rules require for the receipt of funding?
The word ‘region’ has been banned from the CLG, to be replaced by ‘localism’, but unfortunately, the news has yet to percolate to Brussels. Watch this space, for negotiations are ongoing between UK officials and their EU counterparts, as you can be sure the coalition will not want to lose £1.3bn of funding when it is busy slashing elsewhere.
Welfare, of course, is the worst area for the LUC. The coalition has already faced flak over the abolition of child benefit for upper taxpayers with one parent at home. But take the ceiling on housing benefit. It is understandable ministers want to impose a cap. But the LUC means that families living in expensive houses in central London will, therefore, move out to cheaper boroughs, thereby placing new burdens on schools and social services there, the tab having to be picked up these councils.
As for giving local authorities control over council tax benefit, while also cutting the amount by 10%, the LUC means many councils will have to pick up this bill as well, on top of the CSR cuts. And the funding of next year’s council tax freeze means those local authorities planning modest rises to maintain their tax base in future years will lose out.
Ministers can only hope that announcements made during weeks of sleepless hyperactivity in their first months in power do not come back to haunt them.

The Review

2010-10-21T02:50:00.000-07:00

Local government senior managers and councillors knew the Spending Review would be bad news for them – and so it has proved. In that sense, there are few surprises. Most plugged-in chief executives have been working on the assumption of about 30% cuts over the four-year cycle.
The actual figures announced this week by the chancellor envisage cuts of 28% in local government, with 30% in overall capital spending. The Communities and Local Government department’s ‘overall resource’ will drop by 51%.
Curiously, the CLG, announcing the 26% cut, notes that if taking council tax rises into account, the total real-term cut comes down to 14%, which suggests that council tax may not be quite so frozen in the future as ministers have suggested.
There are some chinks of light for local government, such as ending ring-fenced grants, giving them greater powers over benefits and, in particular, providing new funds to boost joint working with the NHS. Indeed, there have been suggestions that the only way the NHS will get through the next four years will be by reducing costs through more joint care and health provision. Equally, some health bodies have already expressed concern that the unring-fenced £1bn given to councils to boost more joint working with the NHS may well disappear to meet their other unm
Local government senior managers and councillors knew the Spending Review would be bad news for them – and so it has proved. In that sense, there are few surprises. Most plugged-in chief executives have been working on the assumption of about 30% cuts over the four-year cycle.
The actual figures announced this week by the chancellor envisage cuts of 28% in local government, with 30% in overall capital spending. The Communities and Local Government department’s ‘overall resource’ will drop by 51%.
Curiously, the CLG, announcing the 26% cut, notes that if taking council tax rises into account, the total real-term cut comes down to 14%, which suggests that council tax may not be quite so frozen in the future as ministers have suggested.
There are some chinks of light for local government, such as ending ring-fenced grants, giving them greater powers over benefits and, in particular, providing new funds to boost joint working with the NHS. Indeed, there have been suggestions that the only way the NHS will get through the next four years will be by reducing costs through more joint care and health provision. Equally, some health bodies have already expressed concern that the unring-fenced £1bn given to councils to boost more joint working with the NHS may well disappear to meet their other unmet needs, such as filling winter potholes.
And it is particularly good news that the offspring of Total Place, community-based budgeting, is back on course, with 16 pilots and a hint these could be rolled out. This initiative was unnecessarily delayed because of a change of government and 12 months – and a heap of efficiency savings – have been wasted.
But the real impact on communities will not be truly felt until the detail of the Spending Review has been applied to each council’s budget. In the meantime, anyone scrutinising the announcement would, as ever, be well advised to apply the three essential safety checks, namely, examine the small print, watch out for the law of unintended consequences, and keep an eye on the mischievous work of those favourite Treasury aides, Smoke and Mirrors.

Time to change the Green Book

2010-10-13T09:31:00.001-07:00

One of the reasons why private sector jobs during this latest recession did not plummet at the rate they had done in the 1980s and early 1990s was because many employers and their staff reduced payroll costs to avoid lay-offs.
Apart from well-known examples of car manufacturers closing plants for three months, there were numerous cases of workforces taking reduced hours and benefits to cut their costs, but save their jobs.
Such initiatives are spreading to local government as the recession moves from the private to the public sector. Increasingly, council employers are unilaterally negotiating changes to terms and conditions such as sickness pay, car allowances and bonuses, to reduce costs, but avoid expensive and unsettling redundancies. Generally, staff understand the logic since, clearly, it is preferable to be in work but without some of the often-generous terms and conditions offered by local government than to be on the dole.
Of course, there is a political imperative, as it helps reduce redundancy and unemployment costs. And, undoubtedly, there is an element of employers not wasting a good crisis to address expensive working practices no longer sustainable in a recession.
So, it is logical for Local Government Employers to try and formalise the ad hoc revision of what is known as part two of the Green Book, by making it part of national pay negotiations. If it can conclude a deal with unions in which pay in some areas goes up, but overall costs reduce, then both sides benefit. Although the unions have regarded the Green Book as sacrosanct, the reality is that on the ground, it is already being torn up by councils acting unilaterally.
As Lord Hutton said about public sector pensions – there is no case for a race to the bottom. Council employers should not create terms and conditions which are worse than the private sector or are likely to make recruitment in the future difficult. But it is reasonable that as they seek to reduce their staff costs, they look at staff overheads and bring on flexible working, rather than reach automatically for the P45s.

Blue sky thinking in Birmingham

2010-10-06T03:22:00.000-07:00

On Monday this week, at the Conservative Party conference in Birmingham, the sky was a deep blue, which is highly unusual for the Midlands in October.
But if the Conservative right wing took this as a sign from the heavens, they were sadly mistaken.
Inside the heavily-fortified conference hall, Tory blue was almost non-existent, right down to the logo. This was a coalition conference, and each minister’s speech, for the first time at a Conservative conference, was aimed not only at their delegates but at another party nowhere to be seen in the hall, namely, the Liberal Democrats. Indeed, health secretary, Andrew Lansley, in his speech, even gave credit to the Liberal Democrats for insisting on a stronger local government role in his health reforms.
But there was certainly plenty of blue-sky thinking, reflected in the huge number of fringe sessions, many of them dealing with pretty heavyweight issues, from welfare reform, family deprivation to criminal justice, schools and the third sector.
The Big Society fringes – indeed, most of the local government fringes – were invariably standing-room only, although no-one, as far as I could ascertain,was any clearer after them about just what Big Society means in practice.
What, however, came over strongly was that for the current period leading up to the end of the year, everything is up for grabs. At the conference itself, there was almost a post-revolutionary zeal, as if the old order had been swept away, like the Bourbons or the Romanovs.
Politics is in a state of flux, ministers are still susceptible to new ideas – indeed, are not even clear of their own. Policy is still being developed. Think-tanks are in an unprecedented position of influence.
There are big opportunities, too, for local government, nervous about its future, although aware that localism is the flavour of the month, and on the fringes there was much talk of new and wider powers for it across welfare reform, health, social policy.
The current post-revolutionary state will not last much beyond next spring. The Comprehensive Spending Revue and budgets will focus minds on grim, practical realities, and the limits to what governments can achieve.
Michael Burton, Editor, The MJ

Apathy from the public sector unions

2010-09-29T03:13:00.001-07:00

Ed Miliband’s election as Labour leader this week has put the public sector unions at the heart of the political battleground.
Examination of the first preference votes cast by union members shows almost twice as many GMB members voting for Ed Miliband against David, Unison members half as much again for Ed over David, and more than twice as many Unite members voting for Ed over his brother.
Does this, therefore, mean that public sector unions are mobilising for a bitter autumn and winter of discontent against spending cuts and that Ed Miliband will be a helpless pawn in union hands as they take to the streets?
It is unlikely judging from the turnout. Despite the importance of the election and the union leaders’ preferences, turnout was low with both GMB and Unison registering single figures at 7.8% and 6.7% respectively. Of the 419,000 ballot papers distributed by Unison, only 28,142 were cast. Of the 554,130 ballot papers from the GMB, 43,106 were cast. This compares to railway union ASLEF, which had the highest union turnout at 25%, dividing its votes evenly between Ed and David.
So, the turnout suggests that public sector union members were generally apathetic about the leadership elections and that those who did bother to vote were the activists who backed Ed for his tougher stance against spending cuts. In their lack of interest, the rest of the membership is either resigned to cuts or not interested in politics, or both. Either way, it does not suggest that union members will be storming the barricades come October.
One reason may be that on the ground, union branches are more flexible about how they deal with the downturn as they recognise that hard-pressed councils are trying to avoid redundancies, if only on cost grounds. There has been a spate of recent notices to staff consulting on changing – ie, making worse – often generous terms and conditions as a means of reducing the pay bill without lay-offs. Faced with the prospect of either keeping their jobs on less favourable terms or accepting redundancies, members are likely to accept the lesser of the two evils.
Michael Burton, Editor, The MJ

What next for regulation?

2010-09-22T04:39:00.000-07:00

Like prisoners released into the open after years of captivity, councils may find the comfort zone of the inspection regime a difficult habit to break.
But with the Audit Commission heading to the history books, councils need to ask themselves what performance monitoring system, if any, they should now pursue. There are some councils which will argue, with justification, that they are perfectly capable of managing their own performance without the need of external help. There are others which will put forward the same argument without any justification at all. And there is the majority which accepts that sector-led regulation and improvement is a sensible alternative both to statutory inspection and to none. The idea that the electorate can decide alone whether its local council is operating on all cylinders is fanciful, as is the belief that voting councillors out every few years is the best method of keeping tabs on poor performance.
The Local Government Group’s draft document to council leaders (see page 3) now puts forward ideas for how such a sector-led regime might operate. At the core needs to be a robust benchmarking system so that the public can measure how their own council compares with others. Transparency in itself is not sufficient, since reams of figures and tables are often gobbleygook to the average voter. What is important is what they mean.
Sector-led regulation can always be open to accusations of stitch-ups. The LGG might consider, therefore, how such information can be analysed and stored by an independent body.
Self-assessment has had mixed results. Too often, over-optimistic self-assessments have been damned by Audit Commission inspections. Peer reviews, however, have been a sector-led success. Those with long memories will recall that when the CPA was being set up, the IDeA was asked whether peer reviews might form part of the new CPA. Wisely, the IDeA turned down the offer. Peer reviews, drawing on experienced officers and members, should now be the backbone of a new sector-led regime.
But what matters above all is that sector self-regulation is seen as robust and objective. If it becomes a damp squib, the pressure will be on for a return to statutory inspection.

Michael Burton, Editor, The MJ

Taking a radical view of services

2010-09-15T03:15:00.000-07:00

The 2020 Commission’s blue-sky thinking report into the future of local services deftly manages to draw on the lessons of the last Government’s Total Place initiative while also picking up the coalition’s Big Society philosophy. This means – in theory – that none of the parties can find it objectionable while for local authorities it is a distillation of all they have been asking.
In essence the report confirms the direction of public sector reform outlined in the Total Place programme, or what is now termed place-based budgeting, namely that early cross-sector intervention saves money long-term. Furthermore, it argues the case for much more devolution to local level, in particular welfare regimes. It also warns that the cost of our ageing population could increase by as much as 6% of annual GDP and that services therefore need to be reconfigured and devolved, with all the postcode lottery implications this entails.
Ministers are certainly moving in the direction. It is likely that place-based pilots will feature in the CSR and in the next local government Bill, though it is uncertain whether other Whitehall departments will pay a blind bit of attention to them in their scramble to protect their own diminishing budget silos. A test will be how staffing cuts are handled since taking costs off a council’s payroll and placing them on the welfare budget might help the council’s finances but does little for place-based budgeting.
The coalition Government has so far shown it is prepared to be radical with public services such as its health White Paper and in the abolition of the RDAs and the Audit Commission. It is also set to review again local government finance. It should also scrutinise the proposals of the 2020 Commission and consider whether they might be piloted in high-performing local authorities.
Increasingly public sector practitioners accept that tackling the public sector deficit requires more than trimming of annual budgets. The 2020 Commission proposals may be unpalatable for some Whitehall fiefdoms and more long-term than short but they deserve serious examination because the alternatives are decidedly thin on the ground.
Michael Burton, Editor, The MJ

LEPs replace the 'r' word

2010-09-08T02:43:00.000-07:00

While the word ‘regions’ may have been banned in the CLG corridors of power it does not necessarily mean policy for the regions has ceased to be. Indeed CLG secretary and erstwhile Bradford leader, Eric Pickles, has pushed through his own agenda for the ‘r’ word with alacrity.
There is a powerful reason for such haste. Economic surveys continue to show regions heavily dependent on public sector jobs and as we know these are diminishing at speed. The BBC/Experian survey out today (Thursday) shows that all top ten most resilient local authority areas are in the south and all top ten least resilient are in the Midlands, North West and North East. These areas are the most likely to be hit hardest by cuts in public spending.
While it was clear the RDAs would not survive in their present form under this government, there was still a view back in May that some, principally those in the Midlands and North, would carry on albeit with different name and focus. Their abolition, while causing few tears in local government, nonetheless creates a vacuum. The new regional growth fund has been set up partly to fill it, but with half the budget of the outgoing RDAs. The main engine for regional growth therefore lies with the new local enterprise partnerships, whose first 56 bids were announced this week.
The LEPs in principle meet the new mantra of localism and must be welcomed for being locally sourced rather than being imposed. In some areas, especially the city regions and strong inter-county partnerships, they will fit easily on already established networks.
Many, however, are based on existing council boundaries which hardly suggests much strategic thought while there are also early fears that there will be so many LEPs they will still require a regional body to coordinate them.
Regional policy is littered with failed attempts to knit business, the public sector and skills more tightly together in order to attract inward private sector investment. What we do not need, as the regions face a downturn in public sector funding, is weak talking shops with neither focus nor funding. In short LEPs must have clout to work.
Michael Burton, Editor, The MJ

Localism does not mean NIMBY-ism

2010-09-02T04:38:00.000-07:00

There are three principal inflationary cost pressures bearing down on all-purpose and county councils, namely, looked-after children, adult care and looming EU landfill taxes.
In an age of austerity, when the public must take a role in prioritising the services they want, it still remains difficult to give them the option of cutting children’s and adult services.
However, the third cost pressure, landfill taxes, is another matter. Quite simply, residents should be asked two questions – do they believe dumping rubbish in the ground at ever-rising cost and then having their council be fined for missing EU targets is a sensible way of spending taxpayers’ money? If not, will they accept the building of energy-from-waste plants in their locality to burn the rubbish instead of landfilling it?
The chief executive of waste company, Sita, believes a ‘time bomb’ is ticking over the current situation in which only 50% of applications for waste-to-energy facilities are approved (see story, page 3). Residents dislike the idea of incinerators in their neighbourhoods, even though countries such as Denmark and Sweden have been using them for years. Councils turn down the applications in response, thereby merely postponing the problem. The scrapping of the Infrastructure Commission removes any strategic approach to waste disposal policy, leaving it exposed to the localised lobbying power of residents.
The issue is not merely about waste or energy, important as they are. It is about the public taking responsibility for the consequences of their own actions. Localism cannot only be about the devolution of power to small groups of residents to exploit for their own advantage. Localism is the very opposite of NIMBY-ism. To use the cliché, with power must come responsibility.
The days of the public passively receiving services from an all-pervasive local authority are over. They are now part of local governance, in some cases, under Big Society, even set to assume services previously operated by the council. And when it comes to strategic decisions, including reducing landfill and avoiding swingeing charges, the public can no longer ostrich-like hide their heads in the sand and avoid participating in the difficult decisions.
Michael Burton, Editor, The MJ

A clever move on pensions

2010-08-11T02:01:00.000-07:00

The trade unions’ apparent willingness to compromise on the emotive issue of public sector pensions could well turn out to be a master stroke as the Government grapples with how to reduce its long-term liabilities on retirement.
Both the GMB and Unison have sent out signals that they may be prepared to accept a local government pension scheme linked to employees’ career earnings rather than the current final salary.
The Local Government Pension Scheme (LGPS), being funded by staff and employers is not such a bottomless pit as unfunded schemes like the civil service and the NHS.
Contrary to some reports, the typical pension is £4,000 a year, reflecting the fact that most of the local government workforce is modestly paid and increasingly part-time.
It is true, however, that a small proportion of senior staff retire on extremely good pensions and that in the recent past, many council executives have been managed out of their authorities on very generous early retirement packages. Being a final salary scheme, the LGPS has potentially huge liabilities, and the workforce, as in the private sector, is living longer.
It is also unfair that while private sector final salary schemes have almost entirely dried up, the public sector continues to enjoy guaranteed final benefits underwritten by the taxpayer.
Furthermore, with the retirement age sensibly, if belatedly, rising to reflect the fact that we are all living longer, the LGPS, too, needs to increase its own retirement age.
Nonetheless, the idea that local government staff should also be impoverished in old age just so they can look the private sector in the eye makes no sense either. It is not their fault that private sector employers have withdrawn from open-ended pension commitments.
The reality is that the current baby-boomer generation has pulled up the drawbridge behind it by declining to fund the next generation’s pensions.
The task of government is to protect pensioners as best it can, public or private. The unions’ offer to accept a career-based scheme should help persuade ministers the LGPS can, and should maintain its commitments to provide a decent pension for staff.
Michael Burton, Editor, The MJ

Planning for the long term

2010-08-04T05:23:00.000-07:00

This week’s attack by the right-of-centre think-tank, the Centre for Social Justice on chancellor George Osborne’s spending cuts for taking a ‘blunderbuss’ approach has resonance across local government.
The centre claims the temptation by Whitehall is to cut the easy targets, however effective they are and however many savings they deliver long term, leaving the more difficult but often inefficient programmes in place.
Another often-used phrase is for central and local government, when facing stringent cuts, to ‘go for the low-hanging fruit’. This is a euphemism for cutting area grants to community projects, dropping non-statutory services, squeezing the voluntary sector, postponing road maintenance, or as we have seen this week in Oxfordshire, slashing road safety initiatives, closing branch libraries, indeed, shutting any projects which yield quick savings with minimal upheaval. Most of them have a direct effect on the public, if in varying degrees.
If cuts are carried out in an atmosphere of panic and with no strategic rationale, then the result will be waves of negative local media, disgruntled residents and a council which has trimmed its services but remained largely intact as an organisation.
To complicate the cuts agenda, the public sector is also under pressure not to incur big, upfront redundancy costs. One chief executive recently told me: ‘I need to scale down the department but the redundancy costs mean I wouldn’t get any payback for three years, so there’s no point in doing it.’ The public will take a dim view of councils slashing services on the one hand but maintaining tiers of middle managers because they cannot afford to let them go.
The more far-sighted councils are already looking at the longer-term picture. Short-term cuts become longer-term ‘decommissioning.’ Councillors bury their territorial differences, such as the innovative tie-up between Northamptonshire and Cambridgeshire, to deliver savings, districts share their management teams, and who knows, one day even their councillors.
What councils must not do, as they prepare to take on wider responsibilities across the public sector, is to destroy their credibility among their residents by cutting the low-hanging fruit and avoiding the more difficult – and more long-term – organisational changes necessary to cope with the next four years

The picture is getting clearer

2010-07-28T03:39:00.000-07:00

As MPs break up for the summer after the most febrile political 10-week period in at least a decade, is there a picture emerging of the coalition government’s attitude towards local authorities?
Until a couple of weeks ago, I would have said it was confused. But, just as we were trying to make sense of [communities secretary] Eric Pickles’ provocative comments to the LGA conference – and in The MJ – about chief executive non jobs and [housing minister] Grant Shapps’ broadside against councillors’ expenses, up popped the health White Paper.
To those sceptics who believed the Department of Health would never yield an inch to local government, the White Paper was an eye-opener, promising new responsibilities. This was confirmed when Mr Pickles joined health secretary, Andrew Lansley, in an official launch last week, just to emphasise the joint role.
This week, Mr Pickles followed it with a speech to the LGA which, apart from his inadvertent leak about super-mayors in the forthcoming localism Bill, was stuffed with olive branches.
Referring to place-based budgeting, he said he ‘loved the idea’ but not the name, and criticised Total Place for not going far enough. He ended his address with: ‘I absolutely trust local government to deliver.’
Simultaneously, across Parliament Square, a few hundred metres away, decentralisation minister, Greg Clark, was also saying nice things about local government to a think-tank seminar. Indeed, when he was asked by one sceptic in the audience whether or not local government was ‘a large part of the problem’ in blocking community enterprise, he denied it, saying there was ‘a metropolitan snobbery about the idea that local government was resistant to change.’ Actually, he said, it had performed much better than Whitehall.
Both ministers made it plain that councils don’t need to wait to be told what to do by Whitehall or, as Mr Pickles exhorted; ‘Over the summer, just get on and do it.’ Do what is another question.
Many councils might well say, ‘make cuts’ or ‘batten down the hatches’ or ‘lay off staff.’ But at least the ministers have made their message clearer: The ball is in local government’s court. Use it.
Michael Burton, Editor, The MJ

Planning the ‘Big society’

2010-07-21T04:02:00.000-07:00

In my London borough resides one of the capital’s few remaining outdoor pools.
Some 25 years ago, it was closed by the council, then reopened for a while by a community group and staffed by volunteers during the decade when apparently, there was ‘no such thing as society’. Then it closed again.
But there is a happy ending to this tale. Earlier this year, it reopened, newly refurbished, and funded by the same council which first closed it.
The moral to this story is that running local amenities is difficult, time-consuming and expensive. They are usually driven by small groups of dedicated, even obsessive residents who share a community of interest.
The question is whether there will be sufficient numbers of such determined people to provide the ‘Big society’ that PM David Cameron believes needs to take off, as spending cuts reduce the local state.
It is certainly true that the public need a sea change in their attitude to just what the local public sector can provide. The discussion earlier this year over whether it was legal under ‘elf and safety’ to shovel snow in front of your house was one example. Residents will have to be prepared to take more responsibility for services traditionally seen as the council’s.
Already, some ‘upper-tier’ authorities are looking at handing branch libraries over to community groups. If social enterprises can take them on, then they should be given the opportunity, when the alternative is closure. They also have a role in cross-cutting areas such as youth justice, youth services, mental health, employment, or leisure.
The paradox is that local area grants, which help develop community enterprises, are the easiest for councils to axe, as indeed they have been doing. And contracts with the voluntary sector are the first to be squeezed in a budget downturn, surely a case of extreme short-sightedness.
Let us not be under any illusion that councils will be able to walk away from services simply because social enterprises have filled part of the gap. The ‘Big society’ will continue to need support, often financial, and if fails, then the council will be left holding the baby.
Michael Burton, Editor, The MJ

Tensions under the surface

2010-07-07T02:52:00.001-07:00

The coalition government’s honeymoon stops on 20 October, when the spending review is announced.
Thereafter, the gloves are off and the Government faces its first real test as details of the cuts become clear.
Much depends on the crucial period between now and October, and the extent to which ministers will be able to come to agreement with their political allies currently running most of local government.
The LGA conference in Bournemouth this week is the most important gathering of public sector leaders since the election, and it is not surprising that [communities secretary] Eric Pickles and his team are taking it seriously, with Mr Pickles pointedly regarding it as a party conference.
In turn, the LGA leadership is keen to show that it has the ear of the coalition, and that while there are differences, especially on the schools agenda, these can be ironed out. Both central and local want the relationship to work, not only because they are politically from the same sides, but because the alternative of non-co-operation would be a disaster for them and the public.
But tensions are already clear. The spinning of Mr Pickles’ speech on Tuesday morning with its angle of ‘non jobs’ was hardly conducive to creating positive headlines about local government. LGA chairman Dame Margaret Eaton was obliged in her own speech to ask politicians to ‘stop chasing cheap headlines at our expense.’
In his conference address, Mr Pickles then proceeded to argue that chief executives were superfluous and their jobs could be done by executive leaders, not a necessarily attractive prospect to Tory senior councillors. Many of them will also argue that if the minister is such a localist, he should let them decide their own forms of governance.
The cancellation of Building Schools for the Future projects has also aroused the ire of leaders, and the whole free schools agenda raises questions over the future role of education authorities.
It is inevitable that central/local tensions will exist, as they did when Labour controlled both local and central government. But, with a background of deep spending cuts which could impact disproportionately on councils, these differences – often exacerbated by needlessly provocative comments – need to be removed.
Michael Burton, Editor, The MJ

No time to be talking rubbish

2010-06-30T04:59:00.000-07:00

What is it about Eric Pickles and rubbish? The other week, he was laying into the Audit Commission, claiming it was ordering councils to impose fortnightly bin collections, an allegation strenuously denied by the commission.
This week, he directed his ire at council publications, saying in a Sunday newspaper they were ‘weekly town hall Pravdas’, and councils ought to focus on ‘providing regular rubbish collections’.
The subject of rubbish is very important to the public. In many cases, it is the only service people associate with their council. It is especially important in districts, such as the one covering Mr Pickles’ constituency.
But does it merit quite so much of his attention as secretary of state?
His intervention, however, raises a wider question, which is the extent he needs to be telling councils what to do on an almost parochial basis, when he is apparently an ardent advocate of localism. Most councils make their own minds up about weekly or fortnightly bin collections, depending on their local circumstances, and do not need Mr Pickles to tell them about how to pick up rubbish.
Nor do they need Mr Pickles to tell them in what format to issue information to their public. In some areas, the local media is vibrant. In other areas, not. In my borough, the local media is dire, and its circulation patchy, and the Conservative-run council feels obliged to produce a quarterly magazine to tell residents what it is doing.
In all cases, the council bankrolls its local media through advertising, in particular, statutory notices, a particularly futile hangover from the past. Statutory notices are a waste of taxpayers’ money but a good source of income to local newspapers. Is that good or bad?
But the point is that Mr Pickles has a very big job trying to ensure his department isn’t cut to ribbons and in ensuring that local government, of which he is a great defender, is able to handle the forthcoming cuts without slashing services.
In the scheme of things, fortnightly bin collections and council newspapers, while handy headline-generators when in Opposition, are small potatoes for a secretary of state.
Michael Burton, Editor, The MJ

The Budget

2010-06-23T03:50:00.001-07:00

In the end, having been softened up with a bombardment of carefully-spun scare stories, most council managers and members will have found this week’s Budget not a million miles adrift from what they expected.
A public sector pay freeze to save £3.3bn by 2014/15 was always on the cards, although the cut-off figure of £21,000 was more generous than the much-trailed £18,000. A review of public sector pensions was also expected, although once again, some commentators predicted that the final salary aspect might be stopped forthwith. Efforts to address the disproportionate impact of public sector jobs in certain regions will be modestly addressed by a regional growth fund for capital projects. A proposal to freeze council tax, while hardly squaring with the localist agenda of leaving councils to decide their priorities, has also been predicted, although whether it is wise is another matter.
Even the stiff headline figure of a 25% cut across non-protected departments over the next four years is not hugely at variance with what finance directors have already been factoring in from next year. It represents an extra 5% of real cuts ‘implied’ by the March Budget.
One chief executive said to me last week: ‘What really matters is just knowing what we have to deal with, so we can plan.’
But the real challenge comes in the autumn when the Spending Review is announced, supposedly on 20 October, and councils then get an idea of their own individual budgets. The question is: How will they react? Will they protect frontline services and cull back offices and share overheads? Or will they cut out all discretionary services and fall back on their core businesses? The challenge will not only be for them but for the coalition government. For if services bear the brunt, you can be sure the blame will be shifted upwards to ministers.
There is also a real prospect that the services councils jettison will be those earmarked for a greater role in Cameron’s ‘Big society’ idea. Already many of the area grants that were axed for this year were for community projects.
One voluntary sector chief recently told me councils were beginning to squeeze the contracts his society held with him. Ministers’claims that localism means devolving down to communities will ring hollow if they have no money to run anything.
The easy target for saving money will be for the ‘soft’ projects, those aimed at the poor, disabled, unemployed, and problem families, leaving budgets for ‘core’ services such as potholes, refuse, adult care, schools or children’s services as protected as possible.
The public must also be involved, not as passive recipients of services but as active participants in deciding priorities and understanding the true costs councils face, from electricity bills to cleaning up after litter-louts or pursuing anti-social neighbours.
Dealing with the next spending round will most likely be a mix of all these responses, salami-slicing costs, cutting back offices, getting the public to demand less and help more, sharing overheads, rethinking roles, culling middle management.
But we are not there yet. This week’s Budget is only the start of a long journey into a radically-different landscape

The impact of the Budget…

2010-06-16T03:42:00.001-07:00

Finance directors will be advised to make the most of the weekend, judging by the artillery bombardment coming out of the coalition government’s spin machine.
A combination of dire warnings about how the state of the public finances is even worse than predicted, coupled with rubbishing of public sector pay, pensions and ‘waste’, suggests next week’s Budget will not be exactly sparing of local government.
But the pre-Budget propaganda barrage has been entirely predictable. Any new government will want to push as much blame on to its predecessor. And headline-grabbing assaults on public sector ‘fat cats’ are guaranteed headlines, a bit like warming up the audience before a Roman gladiators’ circus. Nor are there any surprises that local government may get a tough deal. If the coalition intends ring-fencing the NHS, education and defence, then it must turn to local services.
Councils will get through the next difficult months as they have done on numerous occasions previously. The tide of fat cat coverage will turn as householders suddenly rediscover their liking for well-maintained streets, decent residential care for their aged parents, well-stocked libraries and manicured parks. In the short term, councils will manage the downturn in revenue spend.
But of equal importance is the long-term scenario. So-called salami-slicing may deal with the 2011/12 budget, but what of the following years? In his article this week on page 16, the ex-chairman of London Councils, Sir Merrick Cockell, gives his view that having 33 London boroughs all producing their own services is no longer sustainable. Even apart from the procurement benefit of economies of scale, the costs alone will dictate more mergers.
So far, the new administration at the CLG has dealt with the ‘low hanging fruit’ of change – scrapping quangos, getting rid of the Standards Board, dropping spatial strategies and housing targets. It has yet to apply itself to the more complex and medium-term strategy of how to deliver the same public services on less against the rising costs of demographic change. Next week’s Budget will provide that stimulus, one, as Sir Merrick has displayed, is already being seriously examined within local government itself.

Don’t blame the workforce

2010-06-09T03:57:00.000-07:00

As far as I recall Henry V, about to lead his troops over the top before Agincourt against impossible odds, did not tell them first: ‘You’re a useless, indolent shower, overpaid and underworked and a drain on the taxpayer.’
Henry V understood the power of staff motivation, something which so far has eluded this month-old Government. Public sector staff did not cause the recession. They certainly did well from the good years but then so did the private sector.
But now after the feast comes the reckoning, as David Cameron reminded us this week. And in the scale of its challenge, managing huge spending cuts will be an Agincourt for public sector staff. Many of them will not survive the process. They will be required to deal with impossible odds of reduced budgets and high public expectations. Yet without their motivation the task of transformation, of doing much more on less, of sharing services and breaking down silos will be infinitely harder. Having ministers slag them off for daring to be public sector employees is hardly helpful. Indeed it makes sound business sense to ensure staff are motivated when the going gets tough – they are the very people who will help the organisation get through.
CIPFA’s chief executive Steve Freer, hardly a union mouthpiece, has voiced similar concerns. In The MJ this week (p14) he expresses dismay that ‘unhelpful rhetoric’ will demoralise ‘precisely the people who need to be at the top of their game to manage the delivery of cuts as sensitively as possible.’ He asks: ‘Far from beating up public servants, would it not be much smarter for the Government to be pitching for their co-operation?’
Local government and public sector staff and managers are part of the solution, not the problem. Downgrading their value in order to persuade the public that they are merely a drain on the taxpayer is a cynical and ultimately short-sighted tactic. Ministers should re-read up on Henry V and learn that motivating workforces just when the challenges are greatest is much more constructive than demoralising them.

Commission in the firing line

2010-06-02T03:51:00.000-07:00

Last weekend’s Audit Commission-bashing by Messrs Pickles and Maude provided much entertainment for those who have been on the receiving end of caustic inspection verdicts. But did it provide much light?
The commission came in for a lashing on two grounds. The first was criticism of spending highlighted in its accounts on staff training and various away-days. The second was over the salary of £240,000 – including pension costs – offered to the successor to Steve Bundred, the recently-departed chief executive. The latter issue was always going to be problematic. Trying to stick to a salary package for the next chief lower than several of the commission’s managers would tax the most ingenious HR departments or head-hunter. As for the former, well, this is good knockabout stuff in an age of austerity.
But what does it all mean? There are several interpretations. One is that Messrs Pickles and Maude have taken so many pops at the commission while in Opposition they have forgotten they are now the Government. The second is that they genuinely believe the commission’s days are numbered and it should be wound up, even though the Tory Green Paper a year ago envisaged a new role for it in evaluating the grant-funding regime. Indeed, many insiders have long-believed the commission and the National Audit Office should be merged including the Tory politician who founded it, Lord (Michael) Heseltine.
The third view is that this is a case of new ministers showing they are on the side of local government and against inspectors.
But it is unclear any of these policies have been thought out at this stage. If anything, the weekend bashing was a populist assault on perceived over-endowed public sector pay generally. The block on the commission’s offer to its next chief followed publication of civil service top salaries and a promise to publicise those of council chiefs the end of the year.
In this case, the commission has simply been lumped in with the rest of the so-called ‘fatcats’. It is old-fashioned populism, and there will be a lot more of it, while under the surface, the business of dealing with the real issues will carry on.
Michael Burton, Editor, The MJ

Don’t stick with the old models

2010-05-26T03:17:00.000-07:00

Total Place appears to be the phrase which dare not speak its name, judging by its absence in the coalition government ‘manifesto’ last week, and by its similar non-appearance in the Osborne/Laws first round of cuts and the Queen’s Speech this week.
But its presence is undoubtedly there, under the surface, and it remains as relevant now as it was 12 months ago. If, as we are constantly reminded, we are to make the biggest public sector cuts in living memory, then transformation rather than salami-slicing has to be the reponse, and Total Place is at its core.
The local government sector certainly regards it as relevant. A week after the new CLG ministerial team was confirmed, the first event looking at the next steps for Total Place occurred.
A second was organised earlier this week, under the auspices of the Leadership Centre. Feedback from the events was that as a ‘brand’, Total Place is likely to be renamed, but as a concept, will continue, assuming a) local government pursues it energetically, and b) it matches the new coalition priorities.
There are, however, some early concerns that Total Place – or its successor – still appears in Whitehall to be seen as a CLG matter, when its real impact has to be cross-sector. Ring-fencing health and school budgets is hardly likely to encourage them to adopt a Total Place philosophy either.
For example, the CLG has a minister, Greg Clark (see interview on page 6), responsible for decentralisation. This is the only minister with such a title across Whitehall, even though any discussion of cross-sector working invariably involves criticism of the centralised NHS or Work and Pensions, or the Home Office. It was Lord Bichard at last week’s Total Place event who remarked that we would end up with the worst of both worlds if we merely ‘decentralised in silos.’
The pooling of resources around outcomes has to be an objective, however long-term, of all public sector managers, despite the obstacles, such as culture, funding regimes and lack of standardised terms and conditions. But the new government must not make it even harder by persisting with the old models.
Michael Burton, Editor, The MJ

The new team gets to work

2010-05-19T03:03:00.001-07:00

So the state of the public deficit is worse than expected, according to the incoming Treasury ministerial team.
Well, what a surprise. As sure as night follows day, it was inevitable that accusations of Labour ‘extravagance’ would emerge once the new government had its feet under the desk. And it all makes sensible politics – blame the predecessors for the bad news you are about to announce. A new government only gets this one chance, and it wants to milk it.
And there is nothing unusual about Liam Byrne’s outgoing joke to his successor that the Treasury cupboard is bare. The same message was left by outgoing Tory chancellor, Reginald Maudling, to his successor, Jim Callaghan, when Labour ended 13 years of Conservative rule in 1964.
More importantly, is how local government will fare in the inevitable slashing of departmental spending over the next few weeks, up to and including the June emergency Budget. The fact that Labour did well in the local elections paradoxically makes it easier for the coalition government to wield the axe. It was always going to be problematic for Mr Cameron to reward his foot soldiers in the shires, until 6 May, overwhelmingly dominating local government, by cutting their budgets. Now that Labour has made inroads back into its traditional heartlands in London and the mets, his government may be less concerned about the impact of its spending reductions.
Much also depends on the new ministerial team at the CLG. First, they are all experienced in local government as well as holding the shadow brief. Bob Neill, in particular, like Nick Raynsford in 1997, is a knowledgeable advocate of the sector. Unlike Mr Raynsford, who was banished initially to being construction minister, Mr Neill has been given his brief from day one, which is promising.
However, the new government may also be less keen about its devolution pledges. The scale of Labour’s fightback on 6 May, while predicted because of high turnout, nonetheless came as a surprise. The prospect of the coalition government now eagerly devolving powers to its political opponents becomes less believable.

Michael Burton, Editor, The MJ

Time to fasten the safety belts

2010-05-05T01:01:00.001-07:00

Industrial-strength seat belts need to be ordered for all local government managers from next week, ready to face the biggest roller-coaster ride of their careers.
Their challenges are not only in tackling the long-awaited spending cuts but also its consequences, such as maintaining morale when staff are being reduced, dealing with a public angry at the loss of some of their cherished services, and protecting the good brand name of their council under fire from local media and opposition councillors.
The question is, how prepared council managers and staff are for the downturn, and whether the public are ready for the impact on their services. Certainly, the election campaign has cast little light on the issue.
As the recent Institute of Fiscal Studies (IFS)’ study showed, all politicians have been telling porkies about what they intend to do with the public finances, promising on the one hand, to slash billions off spending, while on the other, maintain frontline services. While cynics have long ago dismissed ‘efficiency’ savings as a smokescreen to confuse the voter, politicians continue to infer that cuts will come from the back office rather than the front, and that, therefore, the imminent fiscal ‘adjustment’ will be tough but bearable. The voters, however, have certainly had ample warning from studies such as the IFS and in the media that this is anything but the case – assuming they choose to give them attention.
Either way, local government managers will find themselves squeezed between a rock and a hard place. An incoming chancellor is almost certain to claim the finances are worse than envisaged, blame his or her predecessor, and impose swingeing spending cuts and tax rises in an emergency Budget. Council managers will be dealing with internal budgetary challenges along with external hostility to ‘de-commissioning.’ Unions, striking over pay and redundancies, will add to the picture of disintegrating services.
But local government has grown used to dealing with declining budgets – tackling ever-rising demand has always been its remit, and it has beaten all other parts of the public sector over efficiency savings. It will rise to the challenge.

Are peer reviews by area the future

2010-04-28T04:26:00.000-07:00

The peer review system, set up by the IDeA, has been one of its great success stories. Indeed, when peer reviews were first launched a decade ago, the Audit Commission approached the IDeA to ascertain whether they might form part of the inspection regime.
The IDeA wisely declined on the basis that the peer review system’s strength was that of ‘a critical friend’, and the commission subsequently set up the CPA.
But now, with a strong likelihood that a new government will scrap the CAA, peer reviews are back in the spotlight, not least because the IDeA recently held its first Total Place peer review.
A group of leaders/chairs and chief executives from councils, PCTs and the police were invited last month by Warwickshire’s public service board to examine partnership working across the county, rather than in just the council itself. Some of the results are described in our feature on pages14-15.
Such whole area reviews are the shape of things to come because the thrust of public policy, as outlined in the Budget Total Place report, is about streamlining public services away from silos. It is also clear that partnerships are a mixed picture. Indeed, Warwickshire called in a review precisely because it was concerned its partnership networks were inhibiting good delivery.
The question is whether such reviews may fill the space evacuated by the CAA, should the latter be scrapped. It would be unwise to replace one regulatory regime with another.
The peer reviews still need to be a voluntary process, with councils and their partners inviting them. Their value is that they have no statutory backing and allow the reviewees to be transparent about their weaknesses, rather than tick the inspectors’ boxes.
But if the commission’s statutory remit to monitor performance is reduced or scrapped, greater onus will be placed on the local government ‘family’ itself to ensure standards are maintained consistently across the sector, not easy at a time of budget cuts and increased cross-sector working. The peer review process could, therefore, well be the answer.
Michael Burton, Editor, The MJ

Eruptions liven the election

2010-04-21T02:13:00.000-07:00

It was the late PM Harold Macmillan who famously remarked that the best-laid schemes of politicians could be easily overturned by ‘events, dear boy.’
The bizarre spectacle of an Icelandic volcano erupting during an election campaign, managing to ground every single plane in the UK and scuppering candidates’ plans to tour election battlegrounds would certainly come under the definition of ‘events.’
So, too, does the saga of Doncaster MBC – which has also managed to erupt at an inconvenient time – come under events. The only difference is that this particular volcano has been squirting lava for many years without any noticeable reaction either from the local government ‘family’ or inspectors... until this week.
The Audit Commission, in its corporate governance report, noted there was ‘repeated evidence’ that it had ‘not been well run for 15 years.’ Indeed, readers of The MJ will be familiar with the long-running political soap opera that is Doncaster. The commission’s report, which recommends intervention, is blistering in its criticism of the political culture at the council.
A few years ago, such a report during an election campaign would have fuelled not only a torrent of party politicking but also brought down scorn on local government.
The fact that generally, it has not is largely due to the absence of ‘basket cases’, the recognition by MPs that they are the last people to be criticising local politicians, and the acceptance that councils will be part of the solution in helping the next government deliver its agenda in tough economic times.
Nonetheless, while the LGA has shown commendable leadership in sending into Doncaster its own corporate heavyweights, the saga has already gone on far too long.
Observers will note that the commission’s report has done it no harm in proving there is still a case for having external inspectors at a time when many council leaders are campaigning for the commission to be scrapped.
It would have been better if the local government family had intervened earlier, and sorted out its bad apples before they went truly rotten.

The calm before the storm

2010-04-09T08:55:00.001-07:00

Like a sepia picture at the end of an Edwardian summer before the Great War, the next four weeks will, for all public sector managers and councillors, soon take on the nostalgic hue of a vanished age of innocence.
Four weeks remain of the ancien regime – not, that is, the Government, but the sustained period of public sector investment which is about to come to a shuddering halt.
Everyone in the business knows this will happen. To paraphrase Sir Edward Grey: ‘The lights are going out all over the public sector. We shall not see them lit again in our lifetime.’
But the detail of how this spending reduction is to be achieved has yet to be defined, and for that, we must wait in blissful innocence until after the general election when the real truth can emerge.
At one end, speculation so far includes swingeing cuts of five to 10% a year, and an entire rethink of key services.
As an ex-chief executive said to me the other day: ‘Why do councils run swimming pools when there are so many private leisure centres?’ That promises some lively local debate, considering that the public, so far, cannot even adjust to the idea of fortnightly bin collections.
At the other end is the hypothesis that governments can never really cut spending, that they dare not risk the ‘double dip’ recession, that the economy will pick up, therefore, negating the need for major cutbacks, and that a freeze in spending may be the worst to happen.
Sensible managers would be wise not to bank on this as an outcome.
There is, of course, another scenario, upheld by optimists, managerial and political, within local government. This takes the view that while the financial climate will be tough, the opportunities for local government to become primus inter pares across the public sector have never been greater.
The next Government will need local government’s delivery expertise to help it through the public sector recession. It is up to councils, by being the solution, not the problem, to enhance their long-term role.

Proceed until apprehended

2010-04-09T08:54:00.004-07:00

One message is clear from last week’s joint CLG/Treasury report into the lessons from the Total Place pilots and the next stages – that ministers and mandarins have taken it on board, and the concept is here to stay.

Indeed, Lord Bichard told an LGA conference this week that more had been achieved on the subject in the last 11 months than the last 11 years.

But that was the easy bit. The pilots and others were helpful in identifying clear weaknesses in the structure of provision, but none of these came as a huge surprise. Anyone with a cursory knowledge of public sector bureaucracies already knows they overlap, are often inefficient, and are poor at dealing with problems involving multi-agency responses.

The real challenge is actually doing something about it. The CLG/Treasury response, while laying out a ‘road map’ for Total Place, also contains the usual Whitehall tendencies.

Apart from imposing on us yet more meaningless catch-phrases, such as ‘the single offer,’ ‘the innovative policy offer’, and ‘total capital and asset pathfinders’, it is unable to resist laying down more hoops for councils to jump through.

The single offer smacks of the so-called freedoms offered to top CPA performers years back – haven’t we moved on since then? Offers of slightly reduced indicators and less ring-fencing are doubtless designed to elicit more forelock-touching from grateful councils. And Total Place will not work if it depends on sweeteners from Whitehall and will merely perpetuate local government’s tendency to wait and be told what to do by the centre.

And there’s the rub. It really is up to councils to pick up the baton and run. The Leadership Centre’s MD, John Atkinson, told the LGA’s event this week that they should ‘proceed until apprehended’, a version of ‘do whatever you want unless it is expressly forbidden.’

But will councils respond in similar vein? Or will cultural barriers, timidity, lack of ambition and lack of confidence mean the opportunity to reconfigure services more efficiently around the need of users just passes them by?

How they react during the crucial next eight months, as preparations are made for the 2011 spending review, will be the test.

Public spending balancing act

2010-04-09T08:54:00.003-07:00

There used to be a phrase in my school Maths book which noted that ‘statistics can be used much like a drunk uses a lamp post – for support rather than illumination.’

I was reminded of the advice this week when studying the Audit Commission’s report into so-called ‘boomerang bosses’ the ex-chief executives who exit councils with bags of cash after a fall-out with their leaders, only to walk immediately into another job. The report was ordered by John Denham last summer as a smokescreen to head off Opposition attacks on public sector ‘fatcats’ and judging by the publicity at the time the public could be forgiven for believing most of local government was involved. It was no accident that the report was commissioned at the height of the Commons expenses scandal and provided a convenient hare for the media to chase.

In fact the Audit Commission report this week notes that of the 122 chiefs who left their jobs in 2007/09 just 37 left with severance packages, or 30% of the total. Of them only six took up other council jobs within a year and over 80% have yet to return to local government. This does not suggest a major problem though this did not prevent the CLG heading a press release ‘boomerang bosses in councils must return pay-offs’. The national media dutifully covered the ‘boomerang racket’ angle.

The real problem is the tendency among a minority of councils to dismiss chief executives on spurious grounds and grant them severance payments and/or enhanced pensions in return for foregoing the employment rights any other employee expects. Too often employers in these cases know they have no legal case which could stack up in an employment tribunal and effectively have to make it worth their chiefs’ while to leave. Nor is it exactly helpful for a chief executive’s reputation and future career to depart in such circumstances. It suggests they are unable to get on with members and severance is often therefore compensation for damage to reputation.

But the subject of severance is a matter for employers and their professional associations to address, not ministers and MPs whose own stables have required a monumental clean-out after the fiddled expenses scandal.

When parting is such sweet sorrow

2010-04-09T08:54:00.001-07:00

Long term aims for Total Place

2010-04-09T08:53:00.001-07:00

Now the dust has settled on the Total Place pilots, until conclusions are aired in the Budget, the next question is, inevitably, ‘what next?’

There are various answers. One is that nothing happens next unless the Government coughs up a few bob for another round of pilots, and councils come rushing to the trough in the time-honoured tradition of only responding to initiatives with cash attached.

An alternative response will come from those councils and their partners which maintain they are already involved in Total Place because they say so, even though their projects were around long before the words ever existed.

Yet a third response comes from those councils and partner agencies who not only grasp the philosophy behind Total Place but are evangelical about it, and are already deep into implementing its principles on the ground, and certainly do not need the Government.

A fourth group, of mainly Conservative councils, will regard Total Place as an interfering New Labour plot, even though they agree wholeheartedly with its aims.

In short, there is no single answer to ‘what happens next’, because while most authorities will claim they are signed up to the principles, in practice, the roll out is extremely mixed. It is also true that there is no one-size-fits-all solution, and that while a thousand flowers need not bloom, there will certainly be various paths.

But the real nub of the issue is just how ambitious the public sector should be with Total Place. If the concept is to be a repeat of the shared services debate, trundling along at a snail’s pace and easily prone to be knocked off course because managers and members find it too difficult, then it will be a failure.

If it is just to be a selection of projects, then its potential will be squandered.

If, as Sir Michael Bichard has stated on many occasions, the current system is inefficient and expensive, then Total Place needs to be ambitious, bedded into the corporate psyche and here to stay not for a year or two but for 10 years.

The answer, therefore, is not ‘what next?’ but ‘where do we wish to be in 2020?’

Blank cheques, but not for councils

2010-04-09T08:52:00.000-07:00

As the election campaign gets under way, politicians begin writing out blank cheques. Despite the knowledge that public spending is about to hit the buffers, our illustrious leaders continue to make pledges on the assumption that the voters cannot be trusted to be told the truth. The trouble is that most of the blank cheques seem to involve departments other than local government.

Incredibly, the Conservatives, at last weekend’s spring conference in Brighton, were running up huge tabs on future pledges, even as they were promising to get to grips with the deficit ‘from day one’.

During their weekend by the seaside, shadow ministers promised to increase NHS spending in real terms every year through the next parliament, link pensions to earnings, introduce marriage into the tax system, create 4,200 more health visitors for Sure Start, build more prisons to prevent early releases, fund council tax rises of 2.5% for two years, and match the council tax on new housing for six years.

Since it is unlikely the Conservatives will cut defence or law and order, that leaves precious little room for spending cuts – unless local government is to end up picking up the bill for all the excess elsewhere.

When we then add in Gordon Brown’s demand that policing must be protected from cuts, together with the ongoing Personal Care at Home Bill’s fanciful idea that its huge new demands can all be funded by efficiency savings in councils and the NHS, then we have not economics, but freakonomics.

The fact is the maths just doesn’t add up. Either politicians know that and are telling porkies to the voters, or they genuinely believe they can both spend more and spend less at the same time, or they intend to slash the only budget they haven’t identified for growth, namely, local government.

But the BBC’s timely and helpful survey earlier this week into council staffing cuts has reminded voters that the public values its local services. I was interviewed by 15 different BBC radio stations across England about the survey on Monday, and there was clear support and sympathy for councils from normally-sceptical presenters. Politicians will need to think very carefully about singling out local government for an unfair share of cuts.