Since the beginning of austerity, councils have had to deliver more with less. As repeated cuts began to have a cumulative effect, it became clear councils could not simply ‘salami-slice’ existing services to survive; the only way to deal with drastically reduced budgets was to completely transform organisations.
An LGC roundtable, sponsored by Agilisys, has explored how councils have transformed. Meena Kishinani, director of transformation at Barking & Dagenham LBC, outlined her borough’s experience.
“The scale of the demographic change has been dramatic. We have one of the fastest-growing populations not only in London but across the country, and 30% of the population are young people under the age of 18,” said Mrs Kishinani. She added that Barking & Dagenham was “at the bottom of the league table on most key indicators” such as homelessness, unemployment and domestic violence.
“People who live in Barking & Dagenham associated themselves with a job at Ford and having a council property. Life has changed in London and we have had to change along with it,” said Mrs Kishinani.
The onset of austerity in 2010 exacerbated these challenges. “By 2020 we will spend half of what we spent in 2010. This is a council that already has taken out £110m, and now has to find a further £68m. This is the burning platform we have in front of us.”
Mrs Kishinani said the council saw the drastic reduction in funding “as an opportunity to think about redesigning the way the council operates in order to improve outcomes for our residents”.
Part of the borough’s success in transforming was leadership of the process from the top. In 2014, the council elected Darren Rodwell (Lab) as leader who later hired Chris Naylor as chief executive. Mrs Kishinani said both had been inspirational in their leadership of the transformation programme.
Mr Naylor appointed Mrs Kishinani as director of transformation in 2015. She was at the time deputy director of children’s services. “I already had credibility in the council, the organisation knew me and trusted me, and I knew how to manage risk,” she said.
“The discussion about future leadership in local government and the skills needed is the conversation we must have. The skills we are looking for are different. I have had to go on that journey,” she said.
Mrs Kishinani facilitated several roadshows about transforming the council, attended by council staff with Cllr Rodwell and Mr Naylor, which helped to secure buy-in from employees.
“The staff had given Chris a very clear mandate that said traditional incremental salami-slicing would not work, therefore be bold and redefine what the local authority is for and what it can do,” she said. These messages echoed the advice the council was given by the Local Government Association peer review team.
“Only by genuinely revising what it does and how it operates can the council seek to address the financial, social and economic challenges being faced. It is also vital to get the council’s core services and delivery right.”
Cllr Rodwell and Mr Naylor based the plan to transform the council on four tenets. The first was to deliver the savings agreed in the 2015-16 budget.
Second, the council set up an independent growth commission, which recognised the borough as “London’s genuine growth opportunity” and set out how it could realise its potential.
Third, the council developed its transformation programme to meet its budgetary challenges, improve its services and build the capacity necessary to deliver on the growth opportunity.
The fourth area of focus was a new organisational design and supporting staff for new ways of working to deliver a new kind of council. In October 2017 the council launched Be First, a wholly owned, arm’s-length growth and regeneration company, which aims to accelerate investment and drive physical change in the borough.
If the council is to deliver truly inclusive growth, it will have to reconnect with its residents, and help them lead more independent and aspirational lives so they are ready and prepared to seize the opportunities that these changes will bring. In October the council also launched Community Solutions: a bold and radical redesign of council services with the aim of resolving complex needs by tackling root causes.
Mrs Kishinani said the council recognised it could not deliver such an ambitious transformation programme without support from public and private sector partners. This support enabled the council to ensure it continued to deliver vital services while redesigning for the future.
As the borough’s existing transformation partner, Agilisys helped Barking & Dagenham to set up the consortium. Addressing this model, Paul Knight, managing consultant at Agilisys, said: “As a transformation partner to a number of local authorities, it is increasingly clear that no one organisation can meet the increasing breadth and depth of the challenge. To truly meet the needs of local government clients, transformation partners must bring together wider sets of skills and expertise.”
Owen Mapley, director of resources at Hertfordshire CC, doubted whether a single programme could be comprehensive enough, given the scale of the challenges councils faced. He said he preferred an approach whereby his council became “more agile” to keep pace with constant changes to the county’s “operating environment”.
“What I am trying to do is create a programme that has some common themes that will underpin a lot of what we do – the digital changes, the way we use our property, the way we address commercial opportunities, the way we are getting into prevention – and knit those together as an overall series of programmes that will continue to evolve,” said Mr Mapley.
Brian Roberts, director of resources at Leicestershire CC, said: “A holistic authority approach is right in the long run.” He added that any plan must avoid short-termism. “The first key thing was medium-term planning. A lot of the transformational change we wanted to do takes a long while to deliver. So, you have your in-year problems but you need to be planning for years three, four and beyond all that. You need some quick wins and some slow-burners.”
Like Barking & Dagenham, Leicestershire first set out to deliver the savings to which it had committed already. The second phase was to bring in “enablers” such as digital technology to support the council’s transformation, Mr Roberts added.
“Take your savings early, get to a financial state which is manageable, which then gives you the opportunity to really transform,” he said. “We’ve now got three or four years to do much more holistic transformation because [we] did the hard work early on.”
Eddie Pinkard, director of transformation at States of Guernsey, said his organisation also faced a “burning platform”, although it did not have to deal with the same levels of austerity as mainland local authorities.
“We’ve got the ageing demographic the same as everybody else has, but we also have a population policy that is designed to keep the island’s population at 63,000 people, and that population is ageing, so as people get older the number of people over the age of 70 increases and the number of people of working age decreases. We’re facing a scenario where there will be less revenue and far more people demanding the services,” Mr Pinkard said.
“We provide all of the UK public services – central government and local government – with the exception of defence, but we provide those to a population of 63,000. We have all of the complexity and none of the scale.”
A key facet of Guernsey’s transformation is creating flexibility within the organisation to allow staff to tackle small changes on their own.
“We say, ‘if you see something wrong and it’s within your power to fix it, go ahead and fix it’, because that’s where you get the organisational energy from,” said Mr Pinkard.
Siobhan Coughlan, programme manager for productivity at the LGA, said the sector had a history of transforming when it needed to, which predated austerity. She recalled work she undertook at the Improvement & Development Agency, previously a subsidiary of LGA, which analysed the success of councils setting up shared front-office services.
“The list of success factors were: leadership at the top, both political and managerial; a very clear vision that everybody can understand; the necessary resources; the skills; partnership working; customer engagement; and staff engagement,” she said.
Valerie Pearce, senior consultant at RedQuadrant, said discussions around transformation had focused on councils, but the true prize was reforming the wider public sector, which she said was “talked about” but added: “I haven’t seen it done effectively.”
Martin Ferguson, director of policy and research at Socitm, argued the concept of place-based transformation was taking hold.
“What are the priority outcomes and opportunities in those places? What are the disruptors in those places? What we’re beginning to see is a more broad-minded view about those disruptors and the opportunities they create. But it’s still very fragmented.”
Mr Ferguson, like Mrs Kishinani, believed successful transformation relied in part on having staff with the right qualities: “The word ‘skill’ is used in relation to building capacity and capability, but one of the things we’ve picked up through our Women in IT programme is recruitment based on a mindset that is open to change. You can learn the skills but mindset is something more inherent.”
Mr Ferguson said there were good examples of cross-sector transformation such as Scottish councils’ Digital Office, an organisation into which each council pays to support digital innovation.
However, he said councils were often constrained by central government. “You see things like £4bn being announced two years ago for health and social care integration. What happens? The money gets given to a board at NHS England and about £250,000 of that has found its way to social care. It is criminal and we just sit back and say, ‘this is OK’.”
Mr Mapley said councils must focus on outcomes, rather than which part of the public sector delivers a service: “For me, ambition is about getting rid of some of our preciousness around control and sovereignty.
“We have some good examples of things like One Public Estate. Why stop there? Why not one public fleet, one public data, one public network, one public portal for web access?”
Ms Pearce said there was little capacity for local authorities to share with each other or “incubate” transformational ideas on a national scale, and that taking risks to transform was not “rewarded” by central government.
Mrs Kishinani, however, said the reward for taking risks was seeing the positive impact in the local community. On place-based transformation, Mrs Kishinani said although councils had little control over the other public services on their patch, they were “the only body with a democratic mandate” necessary to achieve the buy-in from the public and other stakeholders to lead the transformation.
Mr Pinkard said one of the main challenges in leading a large-scale transformation was providing a clear enough vision for reform to reassure stakeholders, while still leaving enough flexibility within plans to allow for changes along the way.
LGC editor Nick Golding, chairing the roundtable, moved the discussion on to what shape panellists thought transformation would take in the next five years.
Mr Roberts said: “The game-changer in transformation is still the relationship between local government and the NHS and the integration of services. It’s hugely challenging. But what we’re going to achieve in that area with older people and vulnerable children has got to be worthwhile.”
Ms Pearce said the major issue in transformation would be leadership: “We’re going to need more role-modelling within leadership and less command-and-control; more conversations across the organisations, across a place.”
For Mr Ferguson, “mobility and connectivity” would radically change “our whole approach to transportation and the way that people interact”.
He added that prevention “across public health, housing, education and policing” would become a major feature, and that to make all this possible, “the reinvigoration of local democracy” would be necessary.
Mr Pinkard said a key facet of future transformation would be to focus on need and why it arises in order to reduce demand. “Every service we’re providing exists only because somebody has a need to be fulfilled; a lot of the time we’re actually creating that need in the first place,” he said.
Mr Mapley said artificial intelligence and big data was the future of transformation. He said: “You see examples in health, where consultants own the decisions they make around patient cases, but they are now guided by the AI that scans the scan, and compares it to every scan that’s ever been taken of that liver, and says, ‘you may want to focus on this area’. Imagine what that would do for a frontline social worker, who is guided or informed by every case that’s ever been undertaken in that area.”
Ms Coughlan said in future councils would continue to be “the core facilitators of place”, regardless of reorganisation or devolution: “I see that even more post-Grenfell, because if you look at the transformation of Kensington & Chelsea RBC since, they have completely changed their attitude – and they needed to.”
For Mr Knight, there would be two themes to transformation in the future: earlier intervention reducing demand, and bringing in revenue to support core services.
“There is the piece about early intervention, or preventing the escalation of our citizens’ needs, which is a better result for them and requires less intervention from us. That enables us to focus our resources on those who really need it.
“It is important to ensure a diversified funding model and revenue streams. How do we create a suitable portfolio, which balances risk and reward to generate the income needed to provide those core services?”
Partner insight: Visionary leadership must drive collaborative strategy
Paul knight small
The fiscal and societal challenges local government faces are widely known and are set to continue for the foreseeable future. Between 2010 and 2015 we saw local government rise to the challenge.
Councils offered up millions upon millions of pounds of savings in a bid to weather the storm of austerity whilst protecting the vital services they provide. With the realisation of further and sustained austerity in 2015, we have witnessed a shift in organisational transformation strategy. Local authorities we work with are increasingly focused on adapting for a long-term change in climate.
One of the biggest challenges is balancing the short term with the long term, or rather the immediate need for savings whilst designing, building and transitioning to a new organisation fit for the future. Local authorities have already made great strides in transforming the way services are delivered, from automation of back-office processes, to shifting channels of communication and greater integration with other public-sector partners.
But more of the same will not meet the continued and increasing challenge. Transformation needs to be more fundamental. Reconfiguring relationships with residents and redefining what a council does are the next big challenges that local authorities are grappling with and that requires a different approach. To meet these challenges, and the associated complexity and breadth, requires visionary leadership, innovative service design, and a diverse range of support.
As a transformation partner to a number of local authorities, it is increasingly clear that no one organisation can meet the increasing breadth and depth of the challenge. To truly meet the needs of local government clients, transformation partners must bring together wider sets of skills and expertise.
One example of this is the establishment of transformation consortiums, bringing together a broad range of thought leaders, insight gatherers, subject matter experts, service designers, interim managers, and the full spectrum of transformation deliverers including vital portfolio and programme resources. The benefits of access to an increased range of distinct skills are obvious, but there are further benefits to be had.
For example, we have found consortiums that adopt a genuine partnership approach and collaborate across suppliers and with local authorities tend to develop more innovative and robust solutions for their residents. The virtues of collaboration are long established but now is the time to increase our network and maximise our engagement with each other. There are no out of the box solutions to the big challenges we face.
As well the strong ethos of collaboration offered through consortiums, we talked about the need to continue to look beyond our own organisations and local boundaries. We heard about the continued appetite for change across the country and the many successes and lessons learned. If we are to develop the innovative solutions required to meet our challenges, we need to expand our conversations and take every opportunity to share, combine and collaborate.
Paul Knight, managing consultant, Agilisys
Column sponsored and supplied by Agilisys