Apathy from the public sector unions

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?

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

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

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

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

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

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