Neil McInroy
All posts tagged: strengthening local democracy
The local state needs to act big
I recently visited some local authorities in the north-west and midlands. These LA’s have had significant cuts and no longer received regeneration monies. These authorities had significantly reduced staffing numbers and were in the midst of transforming their services, working more effectively with reduced resources.
They are unenthused by central government and were rejecting much of the rhetoric around ‘big society’, or a free market for public services. However, they are not some local big state, refusing to change. They are embracing service pluralism and new ways of working.
These authorities were mindful that a rapid and hasty divestment and outsourcing of services would be folly and a bad use of scarce resources. Folly because they knew there was a lack of delivery capacity within their particular communities and Voluntary and Community sector. And a bad use of resources, because they knew that rapid outsourcing may bring short term savings but longer term costs in terms of hindering service integration, shared outcomes and benefits to be accrued through strategic direction.
They knew that to create outcomes which made inroads into an issue such as child poverty, they needed a transformation in cross departmental and cross agency behaviours, thinking and a new plural approach to the problem. They knew this was never going to happen by just letting out a contract to the lowest bidder.
For all the central government brouhaha around the transition from a big state to big society and the need to encourage more social and private delivery of local public services, some local authorities know what needs to be done and are grasping the nettle brought on by the cuts.
They know, as they always have, that in many instances, they are not always the most efficient or the most cost efficient provider, but they also know private or social delivery is no silver bullet.
They know that the demand on public services will continue to increase, but they also know someone needs to strategically oversee need and demand.
They know they cannot afford to work in the same old way, and are therefore, embarking on radical service change.
They want to and are actively encouraging community growth and building neighbourhood and resident capacity to do more themselves, but they also know this takes time.
They know that cooperatives and mutuals and a plethora of new delivery vehicles have potential, but they are wary of seeing them as cheap options.
They know that they must empower local people, but they also know that markets can disempower.
They are sharing services, but are mindful of democratic accountability and sovereignty issues.
Above all, they are creating a new era in local public service, inspired by an shared outcome focused place leadership, filled with a belief in public values. For them, commissioning of in-house or external activity is not just about balance sheets but about building social justice, addressing inequality, nurturing the environment and protecting the most vulnerable.
These authorities are acting big.
Local government and social sector must be friends not foes
Far too much debate around local government and big society has focussed on crude caricatures. This has distracted us from the fundamental questions around social and economic inclusion and masked the real issues facing local services and the needs of citizens. Its time to create new outcome focussed relationships. The social sector and Local Government need to be friends in this endeavour not foes.
The government inspired debate, reinforced by ministerial speeches have accused local authorities of unnecessary cutting, whereas, the voluntary and community sector (VCS) has been praised and lauded as the future of service delivery. This has created some unease between the public and VCS sector.
Furthermore, nationally driven and at times overblown and chimeric claims for the big society, have also translated into some mistrust between these local bedfellows.
This is worrying, and local government, the VCS and advocates of the big society need to be mindful of this tension and avoid it. Some advocates of the big society will no doubt construe this as constructive disruption, and maybe even some in local government will say bring it on! However, no good will come of this tension, and I fear there will be only losers and these will be local service users, residents and communities.
Far too much debate around local public service reform and talk about big society has focussed on a crude caricatures, which has broadly portrayed local government as inefficient, self serving, lacking in innovation, slow and wasteful, whilst the VCS has been cast as creative, efficient, speedy and responsive.
This is baloney and dangerous, as it masks the real issues facing local service delivery and the needs of citizens in the future as regards ageing, increasing demand on services, how we pay for them and ongoing environmental change.
It also avoids pressing questions around local social and economic inclusion. These are the real issues we should be concerned about, and we need positive and creative relationships to overcome them. The powerful, paternal and at times overly grant dependent based relationship between local government and the VCS is changing.
This is mostly a good thing. However, as the power balance shifts, this is not a time to either criticise the VCS or for the VCS to start undermining the sovereignty and representative role of local government. However, it is the time to create commonalities and rally around new localist values, bespoke to place.
CLES’s work on economic and place resilience, tells us that the stronger places have a good relationship between the public and social sectors. I have argued consistently about the need to maintain and develop a place stewardship role for local government.
Part of this role is about an active and activist local state, working with the wider society of residents, community and voluntary groups. This involves a plural delivery of service, including a range of delivery options, including a greater role for the VCS in this.
However plurality is not an end in itself. For CLES, plural service delivery and the associated contracts and service relationships need to forged on the basis of delivering high levels of social, economic inclusion and environmental justice. Many advocates of the big society, and some in local government have lost sight of this.Local government must work with the VCS in ways which are not solely based on service competition, price and efficiencies.
They need to be forged on the basis of creative partnerships, networks and relationships, which have effective and progressive outcomes for service employees and citizens at their core. Mistrust and acrimony are the enemies of this.
Local Government must ensure they retain a place stewardship role
‘You know what, I am not sure I got into local politics to just manage contracts’. This statement, uttered to me a few weeks ago by an experienced local (Conservative) councillor, goes to the nub of fears around the future of local government
Should local government and elected members just outsource all service contracts to the ‘big society’ and commercial deliverers of services and/or should it play a democratically accountable place stewardship and coordinating role? I would argue that too much of the former, fetters the latter. Some areas may be fast approaching this tipping point and we need a much deeper debate about the consequences.
The cuts have created a dynamic and head of steam which make outsourcing a strong option. Firstly, the big society and commercial delivery are perceived as more efficient. Secondly, it gets the costs isolated as part of a contract and reduces the liabilities. These factors have created a dynamic where direct service delivery responsibility is moving away from Local government.
I am not suggesting that the use of the private and social sectors in service delivery is a bad thing. Quite the reverse, some services have always been delivered by a blend of public, private and social sectors. A plurality of service delivery is a good thing. However, there is a key place stewardship role, which too much willy nilly and short term outsourcing will kill.
This place stewardship role is about the qualities and values of public service. It is the ability to ensure a sense of fairness, and equality of access to services. It is also about governance and connecting up different services in creative ways. And fundamentally, its about sovereignty and maintaining direct democratic accountability over a service.
As a resident, in inner city Manchester, I quite like the fact that I can speak to my local councillor about a range of local services, knowing that she and local cabinet colleagues are accountable for them. Even if I don’t like how the service is run, I can even make a vote for an alternative candidate and party. I have a connection, I understand the connection, as does the councillor and all my fellow residents. In contrast, how would I influence a service, if all the local council does is manage a contract, I can’t vote against the CEO or the board of a large commercial company?
Also, are we weakening the power of local government to act as key lynchpins and actors in times of stress? All places are at the vagaries of unpredictable events and ongoing environmental, economic or social shocks. When these shocks occur, the strategic place steward role of local government is to mobilise quickly, harness resources, relationships and reshape services and activity accordingly.
Furthermore, what about opportunities? A major investment opportunity or securing a major sporting or cultural event, is achieved through strategic capacity across a range of partners, drawn together by local government.
Can these fundamental stewardship roles be achieved if all or the majority of our services are outsourced and part of legally binding contractual arrangements? It could well be that outsourcing on a grand scale, weakens the stewardship and strategic role of local government. In doing this we are making our places vulnerable to adverse change, and leaving our places weakened in attempts to realise fleeting moments of opportunity.
All of this is absent from present debate, and the localism bill is silent on them. The future has to be about a strong local government which creates the conditions and ensures the health and wealth of local places, communities, businesses and residents. It can’t do this alone, but it must retain the capacity to lead and steward place.
Goodbye, but should we be saying hello to Local Strategic Partnerships?
Local Strategic partnerships (LSPs)? Remember them? They are now increasingly irrelevant giving the demise of the Comprehensive Area Assessment and the National Indicator set and are withering under the cuts. Many will disappear by April. Good riddance some of you may say. At worst, they were unwieldy, bureaucratic, talking shops, plagued by a ‘tyranny of inclusion’, where bums on seats mattered more than actually doing anything.
However, at best, they were transformative strategic service delivery think tanks, joining up services, breaking down departmental silos and institutional cultures and giving representation to the ‘big society’ of the voluntary and community groups. Thus, lets not be too hasty in making LSPs the next entrant into the growing institutional waste basket of quangos and partnerships. Maybe a reshaped LSP, perhaps as ‘Public innovation Partnerships’ focused on innovation, is the transformative vehicle for public services we need?
We have had a load of talk about cuts, but not a lot about the post cut future. Cuts in themselves will not be able to transform services. At best the cuts will act as a trigger, but the timescale means they are being undertaken too swiftly for any serious transformative dialogue and action to be taking place at this stage.
Furthermore, whilst cuts may herald change, unless we retain some cross sector partnership perspective, the cuts may trigger a whole set of potentially damaging set of unintended consequences. Without something akin to an LSP, where is the forum for discussions about all public sector budgets (health, local government, police, housing etc), and how they need to connect up and effectively respond to the people’s needs? How do we get discussion and a work programme for the transformation to a big society in which communities and voluntary groups work to deliver public sector services? Top down strategic plans won’t work. Where are we discussing public sector spend and the development of a range of delivery options via cooperatives, joint trading companies and mutuals?
Without something like an LSP, we may well just get back door deals. We may end up with public services which through various contractual arrangements don’t meet or add up. Or we get a dangerous willy nilly outsourcing of services, a hollowing out of local government’s strategic capacity and a reduction not an increase, in opportunities for creativity and innovation.
Too many people are talking the talk about innovation and creativity in public services. However to walk the walk, we need dedicated public sector staff and elected members, openness and a forum or space in which discussion and ideas can be explored. Where best to do this, but in a transformed existing partnership body, which already has some buy in?
For example, I was recently conducting a workshop with Cornwall Strategic partnership (CSP). This is to be disbanded, but we looked at some ideas in terms of legacy. Some of their plans for the future did point to a partnership body as a way of maintaining dialogue and looking strategically at shared, combined and innovative ways of delivering services.
As I write, I can already hear the critics saying, ‘Are you out of your mind?’ LSPs were policy at its worst, all bureaucracy, structures and process and no delivery. However, in many countries, strategic partnerships are an institutional fix to the problems of silos and straight line service thinking, which are such a block to creativity and innovation in governance and transforming service delivery.
This would not need to cost any money. Many partners are willing. Thus, before we slump off back to our silos and protect ourselves and our own institutions from the cuts, we desperately need to start talking and connect up the strategic spaces between local organisations. This is where innovation and the future for public services lies.
Cooperatives cannot be the bargain basement for local services
TheRochdale Pioneerswould be turning the grave if they thought cooperatives were about ‘more for less’! It is laudable of theCabinet Officeminister Francis Maude to set out his vision across public services of a ‘rights to provide’in which mutuals and cooperatives would herald in ‘radical shifts in ownership, accountability and financing’ in public services. I am all for experimentation, innovation and creativity in the delivery of public services. However, there are valid questions of creeping privatisation or whether the delivery of a public service such as a Sure Start centre can be likened to the retail offer of John Lewis. Furthermore, we cannot assume, that cooperatives and their rich heritage will be some elixir for public sector cuts.
I am not the best placed to speak up for the cooperative movement, but my raw enthusiasm for the movement is grounded in the core values of theRochdale Society of Equitable Pioneers, who first set out the principles on which co-operatives around the world operate to this day. These are now reflected in the International Cooperative Alliance, who state that:
‘Co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, co-operative members believe in the ethical values of honesty, openness, social responsibility and caring for others’
These values, to my understanding, must be reflected in operational terms to indubitable standards of effectiveness. Standards of employment, cooperation and of service. Efficiency is not the main driver here. We must ensure the proposed flourishing of cooperatives in the deliver of public services, reflect these values and standards. For example, they cannot be a Trojan horse for inferior employment terms and conditions.
Place leadership is something which you do not hear a lot about at the moment. We should be mindful, that local government performs vital overarching stewardship and coordination of activities and services within the places we live. However, the deployment of cooperatives, could lead to the atomisation of service delivery within any given locality, through splintered ownership. This will be recipe for a local government losing more strategic capacity. This indeed would be ironic give the cooperative movement is all about collaboration.
As Francis Maude says lets ‘challenge traditional public service structures and unleash pent-up ideas and innovation’. However, we must not unleash an abuse of cooperative traditions, which fragment and denude the standard of public service delivery, and create a hollowed out local government who can no longer effectively steward the destiny of local places.
Cuts could jeopardise the big society
I believe the big society could be a bold and brave idea. In essence it is about rethinking the social contract between the state and the individual, allowing space and time for the community and voluntary sector to get involved more and break down the traditional duopoly.
However, I am already worrying that cuts and the changes they are bringing to public service delivery are in danger of making this idea stillborn before it even has a chance to breathe. We may not be getting a ‘control shift’ and a ‘big society, small state’, we may just get ‘small society’, and with this any attempts to reform the social contract will be a busted flush.
Of course, on the one hand, the cuts do represent an end of the big state era. It is now clear that we are now entering a new type of public economic culture, with cuts dominating, and the state shrinking.
However, on the other hand, within this context of cuts, the immediate issue for local government is not the big society or re-shaping the social contract. Instead there is worry over change management, lean and system thinking, more for less, making do and generally more bang for the buck.
However, for some commercial outsourcing companies, who supply the public sector, this period of contraction is not a period of trepidation. Quite the reverse, it is being seen as a business opportunity.
For some companies the direct Local Government job losses, represents the need for interim ‘job solutions’. The reduction in a local authorities core corporate policy capacity is a ‘developing market’ and increases in demand for ‘cost cutting strategies’, means new ‘lean thinking public management products’.
These companies are ‘offering solutions’, their share prices are already increasing as they anticipate a boom in new contracts. All of this is taking place whilst Local Authorities reduce their direct staff costs from their balance sheet.
This trend, glaringly highlights a problem for the big society project and this desire to reshape the social contract between the individual and the state, allowing civil society to flourish. Lets face it, in many instances, the community and voluntary sector is just not ready. We have cuts now and immediate capacity issues will be addressed predominantly by the private sector and ‘big business’, not the community and voluntary sector.
I am suggesting that the cuts and this increase in commercial delivery (often national) of local public services, represents a significant threat to any notion of big society and a new social contract. Cuts will not necessarily herald a big society, small state. It will merely herald a small society, small state, and we will be all the worse for it.
THe big society project is doomed to failure if this is just about the power of the state. This is being denuded through cuts already. No. A big society project clearly needs to consider the power of commercial delivery.
So what does the government need to think about, and more importantly, does the government have the stomach to take this on?
For the big society project to gain traction, government will need to allow the space and time for civil society to grow and develop local delivery options. To do this, the government will have to intervene in the market. For example, this will mean it will have to be more interventionist and reform procurement practice away from raw market ‘efficiencies’ toward effectiveness, the local and less traditional commercial public service providers.
Some used to say that the public sector crowds out the commercial sector. How times change, the commercial sector is in danger of crowding out civil society and fettering the new social contract and the big society. The government if it truly believes in radical reform, will need to act.
Local Government needs flexible geographies
Recently CLES have been working with Localis and RegenWM on localism in the West Midlands. We have had some stirring debate about local government, power and the regions. When I discuss economic governance with CLES members and local government, the abiding message, is that we need flexibility. In this, I believe we need to be very wary of placing too much of a focus on new forms and institutions, and avoid assumptions that there is an easy made spatial fix.
The recent report and commentary by Paul Carter, Leader,Kent County Council,is a welcome addition to this debate. Though the idea contained within an LGC article that there should be formal sub regions is problematic. In economic terms we need flexibility which allows local authority areas to work together and do different things at various geographic scales. We need collaboration which is labile, majors on effectiveness not just raw efficiency and is capable of economic and environmental change and dealing swiftly with this change. We need arrangements which major on local function (thepurpose) not form (institutions). For this to happen, we cannot get so hung up about fixed institutions at specific scales.
Take the tortuous opposition party political policy proposals on RDA’s. Firstly the Conservatives and the Liberal Democrats said they would scrap the RDAs, then when they start thinking about function - which should have been their starting point in the first place - they now see the need for some regional function and rush to suggest a new form. John Thurso, the Liberal Democrat spokesperson has now said they would introduce ‘Regional Enterprise Boards’, whilst Caroline Spelman, the Shadow Local Government Secretary now says that the RDAS will ‘therefore evolve into ‘local enterprise partnerships’.
From a starting position of getting rid of the form, they now have jumped into another form without really appreciating that we need flexibility and variation depending on location and functional need. In short, as Paul Carter rightly states ‘building blocks’ of groupings are required. However, these need to be linked to specific function.
In economic terms, the need for flexible institutions and a greater focus on purpose is vital for 3 key reasons.
We have polycentric sub regions and counties.
We do not have fixed geographies or single coherent entities. Our Urban Mets of Dudley and Bury and our towns of Bury St Edmunds, Tonbridge or Burnley have strong economic identities forged through centuries and need nurturing not squashing under overly clunky singular sub regional economic visions. Our counties, sub regions and cities are not ordered neatly. They do not always have a central county town or a comparatively even growth and economic identity based around the CBD (see previous blog).
Societal and environmental trends are moving us to localisation.
Societal trends, environmental concerns and cultural moods are telling us that we should we thinking about localising, reducing economic footprints andmaking economic decisions which are closer to people and communities, not just aggregating them up. As its stands we are in danger of hollowing out our appreciation of district shopping areas and local economic activity - delocalising our economy.
Economic themes have a variable spatial fit.
The correct scale for delivering on skills is not the same for transport, or for the benefit system. The best and most efficient scale at which to deliver onpolicy and services is not the same scale for all topic areas or the same by geographical location.
We therefore need forms, which are more able to be temporal, differentiated and nuanced by place. Assumed blanket solutions such as sub regions or Statutory City Regions will not be the way we need to progress in all locations, and I suspect many urban local authorities who are part of emergent cityregions have significant doubts.
To progress to a greater flexibility, we need to build on the existing power shift toward local government, allowing local government to drive county,regional and sub regional agendas, moving power over economic decisions away from Whitehall. This required variable and flexible geometry cannotcome with fixed institutional strings attached. A flexible form must follow function and power must be transferred to collaborating local authorities in this.
So can we now please start having more of a debate which at its core majors on flexibility and appreciates that form must follow function – creatinginstitutions if need be, but as an end point of a process which local government gets the power to shape.
Neil McInroy is chief executive of the Centre for Local Economic Strategies
Doing ‘more for less’? We are going to need more!
As recent figures from the Office for National Statistics reveal we are still in recession. Furthermore, as the reports from the Joseph Rowntree Foundation and the Industrial Communities Alliance reveal, unemployment and inequality is rising. A Local Government Association report in March also pointed out that 41% of Local Authorities were experiencing an increase in demand for services for the unemployed or those at risk of unemployment and 57% were experiencing an increase in demand for social housing.
We are now and in the future, going to have more social need and demands on public services, just as the proposed cuts start to bite. We are in a horrible absurdity – in a time when demand on public services is going up and likely to rocket - there is going to be less capacity and a reduction in supply of funding for projects and programmes to help soften the effects.
With no signs of a focussed Keynesian stimulus on frontline services fuelled by tax rises, there is now a growing consensus around a recognition that we just need to get by on ‘more for less’. However, let’s be frank, this is not going to work on its own.
‘More for less’ whilst helpful as regards to driving greater levels of innovation, and cutting down bureaucracy, is likely to be hopelessly inadequate to a significant increase in social need. It will not be enough to avert a new wave of social and urban decline, and all its consequences.
We cannot trust ‘more for less’ to squeeze out more from a reducing purse. In all likelihood, we are going to need to start averting the problems and getting ‘more’ to frontline services and activity in the short term.
I am not arguing agin the whole concept of ‘more for less’. Initiatives such as ‘total place’ are important as a means of assessing the total contribution of the public economy and assessing how more can be done, with a declining overall public sector spending purse. There is also the need for progressive procurement processes and a greater understanding of the beneficial multiplier effects of public spend, as indicated in work undertaken by CLES and APSE.
However, there is a real need to lift our heads up and frame this era around a broader discussion and prioritised debate around paying for much needed local services. In the absence of short-term political will to achieve more through taxation - what is open to local government and localities faced by rising demand for its services and less money to provide them -how can it get more?
It’s not going to be easy, but here are two things we need to look at.
More of a local state: More local power and resources
At present, we have an inadequately ‘tooled up’ local government to deal with the issues on the front line. We need more powers and resources to local government so they can tailor local economic, skills and welfare policy which are bespoke to local circumstances and allows them to shape their own economic destiny and avert decline.
I agree with the New local Government Network in their recent publication –Capital Contingencies, in which they argue for a need to increase the amount of money available to Local Authorities through new funding mechanisms to aid infrastructure.
However, alongside infrastructure, we also need more powers and resources deployed locally to allow local government to harness wealth creation so it can invest more in welfare, skills and education.
More commercial investment
This is not just about the public sector, it is time to see the commercial financial markets doing more. They, like us in the public sector are interested in averting decline. This week, I was at the launch of the New Economy Working Papers, published by the Commission for the New Economy and heard a presentation of a paper on the equity market in Manchester and the North west, co written by my one of my CLES colleagues- Adrian Nolan.
In this paper, it is clear that in thinking about the local economy, Local authorities need to improve their approach to capital markets, but more importantly commercial investment needs to change its attitude.
We need more ‘patient capital’ which sticks around and is more responsive to localities and does a lot more than be spatially footloose and hone in on fast returns. For example, the research found that the average financial deal size in the North West is the lowest across all the regions at £290k, compared to a £790k national average and £2m in London.
Furthermore the introduction of a Community Reinvestment Act as advocated by Urban Forum, and others supported by CLES research, is a practical change which can assist in addressing financial deserts and financial exclusion in communities.
Overall, new behaviours and culture from investors and the capital markets are required as well as new legislation to support this change.
Lets not sleepwalk into a belief we will be OK through a narrow strategy of ‘more for less’. The scale of need is going to be too large.
Local government needs an empowered context for public services with financial levers coupled to investment markets which deliver more!
