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Rebuilding before the storm passes

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As authorities get to grips with deep cuts, the work of building new public service models begins. Mark Smulian reports from LGC’s roundtable in association with Serco

Well, that wasn’t so bad, was it? Predictions of financial armageddon in local government were common before the last general election - and that was before the full impact of a 28% cut sank in.

But here we are in 2013, with councils having shed staff, but not in most cases services. Money is tight but some might be tempted to think the worst is over.

Challenges ahead

Participants at the LGC/Serco roundtable on How to Make Sense of the Future: A New Model for Public Services, were agreed that the real challenges are still to come, as the financial climate worsens towards 2020.

Participants

  • Owen Daly-Jones, director, Serco Experience Lab
  • Neil Davies, chief executive, Medway Council
  • Nick Golding, acting editor, LGC (chair)
  • Jim Graham, chief executive, Warwickshire CC
  • Tracey Lee, chief executive, Plymouth City Council
  • Gareth Moss, partnership director, Serco
  • John O’Brien, chief execuive, London Councils
  • John Newton, managing director, New Networks
  • Charlie Parker, chief executive, Oldham MBC
  • Tony Reeves, chief executive, City of Bradford MDC

The old order cannot be restored and new models are yet to emerge; everyone has been so busy making cuts that the hard thinking about what local government should do and look like has barely begun.

Serco’s partnerships director Gareth Moss said: “The last couple of years have demonstrated to me strength and capability in local government, but is everybody coping as well as others? No. Are some struggling? Absolutely. I really feel for elected members at the moment because the decisions they are having to take are really alien to what they want to do.”

Tony Reeves, chief executive of Bradford City MDC, said that whether a council is ‘coping’ depends on its objectives.

“If that’s to balance the books and stay as close to the status quo as you can, maybe you can argue the council is coping,” he said. “But the real challenge is to understand the financial framework you will be operating in and position yourself to get the right outcomes for your communities, and I think the jury is out on that.

“I see some real opportunities to break the cycle of paternalism that has dogged public services since the inception of the welfare state in the late 1940s.

“We have to think differently and the idea that local government has made huge progress in that transition is nonsense, quite frankly.”

Oldham MBC chief executive Charlie Parker said the two big opportunities for local government were public service reform and growth.

He explained: “It’s about how you stimulate growth in an environment where there isn’t a lot of money, and how you develop an infrastructure to ensure you can deliver good public services when you have challenging local government finances.

“There are really quite difficult choices in some places and I’m not sure some colleagues have got there, as they are fixated on dealing with the short-term issues up to 2015. If you plan and work it right you can create a new model for local government out of this.”

Jim Graham, chief executive of Warwickshire CC, agreed: “If you look at imaginative solutions on the ground now, they tend to be a minority.

“Most councils are still trying to grimly hang on to a diminishing version of themselves in perpetuity, not recognising there may not be a future for some organisations.”

This extended to the whole public sector, which Mr Graham felt should, “let some organisation go to the wall - there are simply too many and too much duplication”.

Politicians had been slow, he said, to grasp the need for radical change in which the public sector’s internal divisions were broken down to provide both better and cheaper services.

“I’m really disappointed in ministers’ lack of ambition for the public sector, they haven’t got a clue, and it’s up to us,” he added.

Mr Graham called for an end to the post of secretary of state for communities and local government, and for it to be replaced by a cabinet post for local public services of all kinds.

Joining them up would still be highly problematic. Mr Parker said the NHS “lives in a bubble with quite a lot of investment. It is the sort of player, along with the Department for Work & Pensions and other government departments, that has to move in a very different way to deal with the systemic issues that we face as a public service.”

Plymouth City Council chief executive Tracey Lee said part of the problem was the lack of a “national narrative” on public service reform.

“We’re spending a lot of time trying to fight rearguard actions about why we are changing services, and avoiding the placards outside. We know it [the current model] is outdated, but with no national narrative about how the public sector has to reform, we are all bobbing around, not sure of the best use of resources.”

Barnet LBC was once a beacon of controversial radicalism, with its ‘easyCouncil’ concept of residents paying to buy the services they chose.

John Newton, managing director of consultancy New Networks, helped procure Barnet’s massive outsourcing of services to Capita in a 10-year deal worth £32m a year.

“No one at Barnet talks about ‘easyCouncil’, and in some ways that’s a shame as it has gone back to a more conventional outsourcing,” he said.

Mr Newton said objections had led to the scaling back of the programme, as those in charge at a local authority cannot, unlike private sector counterparts, simply give orders.

“In a local authority there are people wedded to stopping change, whether it is individuals blocking, or interest groups or people just resistant to change in middle management,” he said.

Changes in councils would become more radical and “your organisations will run on entirely new models in future. You need champions to deliver change.”

Mr Parker feared that internal opposition might thwart the emergence of new models of public services.

“Unless you have people who believe in change, you will not turn it around,” he warned. “Innovation comes from organisations that are nimble and local government is like a tanker.”

He predicted problems where staff who are perfectly competent “realise change will create a problem for their position, at which point all the blockers create a very strong ‘anti’ movement for any change programme”.

Flexible staff

Local government needed an environment that was “more flexible, with transferable skills and people who do not necessarily see a career in one part of the business only, but who can move around, which is a big ask”, he added.

Owen Daly-Jones, director of the Serco Experience Lab, said his experience of private sector innovation had convinced him of “the importance of the right people and teams and openmindedness, and I can see how that would be a challenge with staff who are entrenched”.

Councils might experiment with ‘skunk works’, he suggested, as pioneered by aircraft manufacturer Lockheed Martin; this involves multi-disciplinary teams being told to tackle insoluble problems and reporting only to the chief executive.

Mr Daly-Jones also urged councils not to rely on conventional market research to hear what residents wanted.

“The more interesting stuff that will really generate new insights is studying behaviour, unconscious needs and desires among citizens, things they cannot articulate,” he said.

“We look at products and services and one key message is to look at what they say less and more at behaviour.”

Mr Graham said professions in local government, in particular in education and social services, should rethink their attitudes to ownership of data, which could be used to help people to help themselves.

“If you turn around the relationship so data becomes the tool of the citizen, is there a way we can deflect a whole raft of activity that takes a lot of staff time?” he asked.

“One problem is a lot of IT favours internalisation of control of data, and how do you make that useful and deployable to citizens? If we can turn that around, we can release a hell of a lot of capacity.”

John O’Brien, chief executive of London Councils, highlighted the costs of the sector’s preoccupation with rigid rules.

“In children’s services and adult social care, there is an amount of regulation and report writing that is quite culturally difficult to change because of the dangers that go with it.

“It would be interesting if people have radical ideas in these areas, as it’s a significant part of what we spend.”

Mr Moss said some professional attitudes were barriers to progress and “some are intransigent but it’s a lot worse in health”.

“Getting consultants and GPs to change their ways is difficult and you need to apply pressure to build flexibility into their professional training,” he added.

There has been much talk of councils working in close partnership with the voluntary sector but the panel had decidedly mixed experiences of this.

Neil Davies, chief executive of Medway Council, said: “We delivered a few things with them but nothing fundamental, and we’ve not found anything innovative.

“There is a confidence deficit among our members about voluntary organisations’ resilience.”

Issues of the sector’s capacity challenges were “insurmountable at the moment”, he added.

Ms Lee said some voluntary organisations acted as both advocates and contractors delivering a service, and this “can come into conflict”.

Mr Parker said he had found “real maturity, particularly around social care”, in the voluntary sector. But capability issues arose elsewhere and “the third sector has a lumpy offer”.

Councils should try to marshal the voluntary sector better, Mr Newton suggested. “Maybe strike the bargain that if they use your front end, they must be part of a community ecosystem that helps you,” he said.

He called for greater accountability for the voluntary sector through contractual-style arrangements and urged: “People are not brutal enough. If a charity is not doing the right thing and is sucking oxygen from someone who could, you need to say so.”

Mr Moss said he struggled with the idea that the voluntary sector represented a huge untapped resource. “Some of the voluntary sector does stunning things, but I wonder if in others there is capacity to do more,” he said.

What of the private sector?

Mr Reeves gave two examples from Bradford of innovation in partnerships.”Big businesses recognise getting young people into work is important but they don’t know how to do it. When told, they will respond positively,” he said.

Bradford has a large school meals service and has taken on young food production trainees. Food retailer Morrisons will, in turn, employ suitably qualified people from this scheme.

The council was also able to secure a major city centre redevelopment by Provident Financial after the company’s developer found it impossible to secure bank finance.

Bradford faced the loss of 750 jobs, so the council met 25% of the project’s cost.

“Our auditors and lawyers went nuts and the Audit Commission said we couldn’t do it, but nobody could find rules that said we couldn’t. So we did it and got payback within 11 months,” Mr Reeves said. “Our credibility with the private sector went through the roof.”

Bradford also employs apprentices who were hired on weekly contracts to small businesses that would not otherwise afford to commit to train young people. Participants agreed that councils were hamstrung by real or imagined rules, notably in procurement, which hampered innovation.

Mr O’Brien noted that when 24 London boroughs started energy switching, the savings were substantial but that “you just have to get on with it because the rules about getting there are very painful”.

Securing big savings in Medway meant tackling social services, Mr Davies noted, and radical change meant, “we have to break down some regulations, as we must address these large spending services”.

There was agreement around the table that the sector should be less risk averse, less obsessed with rules and more open to looking at public services as a whole.

Just as well, as it may face problems that have as yet barely been contemplated.

As Mr Parker predicted: “Some [authorities] are going to fall over soon, probably including large, medium and small local authorities. “When that happens, the sector is not ready for it, even though it knows it will happen, and we will have to intervene even when the pressures on our own arrangements will be severe,” he said.

Even if no-one knows the future, participants agreed the past will be a pretty poor guide to the challenges they will be facing.

This roundtable discussion was sponsored by Serco. The topic was agreed by LGC and Serco. The report was commissioned and edited by LGC. For more information, see LGCplus.com/Guidelines

 

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Rebuilding before the storm passes

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