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.
Wednesday, 24 November 2010
Wednesday, 17 November 2010
Merging members as well as officers
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.
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.
Wednesday, 10 November 2010
Increasing fees is not the answer
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.
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.
Wednesday, 3 November 2010
The huge agenda for care services
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.
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.
Wednesday, 27 October 2010
Watch out for the unintended traps
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.
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.
Thursday, 21 October 2010
The Review
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.
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.
Wednesday, 13 October 2010
Time to change the Green Book
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.
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.
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