Neil McInroy
All posts tagged: Conservatives
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 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.
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
