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'Are boardroom skills transferable to local government?'

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Should we be looking to business to fill the next chief executive vacancy?

If management skills are transferable and local authorities are going to be more like businesses, it might benefit local government to bring in dynamic, entrepreneurial skills.

Somewhere like Birmingham or Lancashire, with their billion pound budgets, would surely be attractive to an ambitious chief executive who wanted to put something back in to the community. The salary could doubtless be review for the right candidate.

But there are a few things candidates should consider. Local authorities are complex organisations delivering a more diverse range of services than the average private sector company, from road repairs, refuse collection, child protection and domiciliary care to protection for vulnerable adults, libraries, museums, housing and even swimming pools.

Some services are contracted out, while others are managed in-house. Some are strategic like regeneration, economic development, community cohesion. They involve collaboration, cooperation and coordination without a lot of leverage.

Schools are a good example of the dynamic, where staff influence depends on whether the school in question is an academy and how the newly empowered governors take advice. Despite this array of factors, authorities will still be judged for educational standards.

The big difference between how private firms and local authorities work is thus not the focus on the money or the performance culture, but the governance arrangements.

You will be told that the cabinet operates much the same way as a company board, with the leader of the council as the chair with the chief executive to their side. Other board members are the officers or directors and the councillors, with portfolio responsibility for each directorate.

You could argue that voters are the equivalent of the investors who can hold a board accountable. But the cabinet is under much more media scrutiny and much more sensitive to how it’s decisions are perceived by the public than any board.

The key relationship is between leader of the council or chair of the board and the chief executive. How this works in practice varies, but in recent times the roles have become increasingly blurred.

Leaders have been encouraged by central government to be more assertive, and policy and strategy has become more ideologically driven. An example is the extent to which an authority has embraced outsourcing, not always for the best business reasons and sometimes going well beyond what officers thought justifiable.

Decisions in local government are not made solely on the business case. They can be ideologically driven but they can also be in response to public opinion.

Since councillors must seek regular re-election and a small number of seats changing hands can result in a party losing control, decisions are sometimes referred to as “politically sensitive” – meaning deeply unpopular and likely to lose the party votes.

A further complication is the dual role of councillors as party members and as advocates for the interest of their electoral wards. The result can be cabinet making a strategic decision to close libraries to save money while party colleagues lead the opposition to the implementation of the decision in their ward.

In some cases chief executives also answer to directly elected mayors but also to the leader of the majority party. The result can be a chief executive answerable to two bosses with different agendas and different priorities, both claiming to an electoral mandate.

For the above reasons, past thinking is that it would be difficult for someone outside local government to adjust to a political environment without previous experience of the public sector. Hence the posts are rarely opened up to such applicants.

But in view of the public sector’s adoption of so much of the business sector’s ways of doing things, maybe the head hunters should broaden the search. Perhaps those boardroom skills are transferable.

Blair McPherson, former director, Lancashire CC

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