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Eight years, two broad phases of change

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It has become a truism to suggest that local government needs to reinvent itself in response to the cuts and localism agendas. But what will that transformation really look like? NLGN’s new Future Councils report provides some answers.

Inspired by ambitious proposals from places like Barnet, Brighton and Lambeth, our research analyses the key forces that will shape the sector over the rest of the decade, sketching out the types of organisation that might emerge as a result. Combining an analysis of current council reform plans, a scenario planning exercise and many conversations with senior officials, we came to the conclusion that the next eight years will see two broad phases of change.

As we approach the 2015 election, the local government debate will be dominated by strategic commissioning, meaning that most councils will have moved at least some way down the path of arm’s length service provision and smarter, smaller corporate cores.

That doesn’t necessarily mean lots more conventional outsourcing - most commissioning councils will keep at least some services in house and almost all will look for a mix of providers that includes mutuals, the VCS and communities themselves. Strategic commissioning is really about a shift in management style, away from direct oversight towards contractual mechanisms.

Individual services will also change as councils launch a wave of reviews. Social care is heading rapidly down the route of personal budgets, environmental services will increasingly be devolved down to neighbourhoods and communities themselves will take on services such as libraries.

The second phase of change after the 2015 election is probably even more ambitious. By that point many councils will be moving away from service delivery as their core responsibility. Delivery chains will include a much wider range of organisations and some communities will be increasingly independent of the state. Having reduced their involvement in service delivery, some councils will need to renew their core purpose, and the key issue will be how to secure economic and social growth.

By 2020 we expect to see a variety of new types of council emerging. The need to boost growth and share services will probably drive large parts of the country towards clustering or federating. Greater Manchester might adopt a Boris-style mayor, while city regions in the north east and Yorkshire might pool sovereignty to manage regional inward investment and growth. The Tees Valley authorities and many districts might share so many services that they become completely interdependent.

Some councils might externalise so many of their functions that they become ‘residual authorities’, lacking the critical mass to do any more than market-manage. Others might take an aggressively commercial approach, selling services to other authorities and the private sector, and perhaps introducing more ‘pay as you go’ charges for residents. The quid pro quo might be a profit sharing scheme, with councils offering a dividend to residents.

Local government faces a decade of change - and there will not be a return to the halcyon days of traditional local democracy. If councils want to avoid the fate of the Californian state government - hamstrung by decades of low funding and direct democracy - then they will have to address some existential challenges: how to reverse the decline of local politics, how to work across geographic boundaries? Ultimately, with less day-to-day control of services and fewer resources, the hardest question might be whether and how local government can retain its place at the heart of the communities it serves.

Simon Parker, chief executive, NLGN,

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