There have been a lot of simplistic comparisons made between budget management in the private and public sectors but some of it is helpful.
When commercial organisations meet an economic recession or difficult market conditions, they reduce their costs and balance the books but, at a strategic level, they also address the more fundamental question of what business they are in. In times of economic restraint, businesses tend to return to their core function or purpose.
Whether it is realistic or not, in many cases, public expectations about the delivery of council services have increased
The core function of local, democratically elected government is about setting political objectives, based upon community aspirations, and being resolute about their achievement. The key mechanisms are local, democratic and community based. The aspirations and objectives are about public service.
Local authorities are facing unprecedented financial pressures. The government’s spending review has imposed a severe reduction in grant funding, council tax increases are neither affordable nor politically acceptable and pressures from price and contract inflation have seen a marked increase in recent months. Community needs and aspirations have, arguably, not diminished in the same way.
Whether it is realistic or not, in many cases, public expectations about the delivery of council services have increased.
Reacting to the finance settlement
The reaction of all local councils is to reduce costs, and search for greater efficiencies which, to most, is like an old suit of clothes.
The current circumstances are, however, so difficult and the cuts so severe that many councils are, for the first time, having to close down facilities and stop some services altogether. The plain truth is that the efficiency programme is running out of track and all of the obvious options to divest and disinvest have gone.
The opportunities of reducing spending in some service areas, in order to pay for others, or “tuning-up” and “tuning-down” have been replaced by Hobson’s choices: close a library or shut down a household waste recycling facility. In many areas, it is much worse than this and is more a question of how many libraries, recycling facilities, youth services, road schemes, arts venues, day centres, swimming pools and so on will need to close in order to make ends meet.
Voluntary redundancy schemes are commonplace, and most councils are considering large-scale, compulsory redundancies.
There is, understandably, a growing concern about the cuts amongst the general public. We should not portray this as some knee jerk reaction from impecunious, grumpy or self-centred citizens failing to see that “we are all in this together”.
The public’s concern about the cuts and the growing call, from students to pensioners, to influence the process is the greatest possible endorsement of the value of local, democratic decision making and, above all, of the high regard which people have for public service.
There is little comfort in the old adage that a crisis is too good an opportunity to waste; but one would hope that local authorities are giving some thought to the question of their core business. There is a lot of demolition going on, but when all of the rubble is removed we would surely hope to find the cornerstones of local democracy and citizen engagement unshaken and preserved amongst the foundations. The two other cornerstones of Local Government PLC, the principle of welfare provision and the moral purpose of public intervention may have suffered more serious damage.
In talking to chief executives, senior managers and others in the sector and watching from the sidelines, my worry is that amongst the exigencies of the current crisis, the severity of the cuts and the jingoism and rhetoric of central government policy about public spending cuts, local government could lose touch with some of its core purpose.
One of the lessons of outsourcing, strategic partnerships, joint ventures, and new forms of provision, is, rightly, that local government is not just about direct service delivery. One of misguided conclusions drawn from the brutal experience of the cuts maybe that these services are no longer the business of local government at all. Local government is, at its very core, about public service intervention to compensate for market failure. The substitute for a failing market for social and community goods and services is welfare provision. There is no substitute for welfare provision.
I make no apology for the term. These arguments may be currently unfashionable but they are founded on the principles of fairness, accessibility, equality, care and community well-being, which lie at the centre of local government’s moral purpose. All forms public-service intervention, whatever the mechanism of service delivery, have distributional and social consequences.
The best form of organisation so far devised for dealing with distributional issues and social justice are those that embrace local democracy and citizen engagement.
To quote from Michael Fullan’s book, Leading in a Culture of Change, “we are living in chaotic conditions” and in the words of GK Chesterton, “wildness lies in wait”. This seems like a good time to return to the first principles of our commitment to welfare.
Alan Jones, managing director, Future Communities