We are facing an unprecedented financial challenge , having successfully reduced the cost of service delivery to accommodate the reduction of government grant by 28% over 2 successive years, expecting to be able to manage a further x% grant reduction in 2013/14 and to have to cope with further spending reductions anticipated for at least three years after that. Efficiency alone is not enough. Increasingly Councils are adopting different models of service delivery and employing new methods as they seek to address the difficulties presented by the government’s spending constraints. This presentation aims to give an overview of the trends we are seeing in local government with reference to recent publications and known practice and prompt a discussion about the sort of council we are and the sort of council we need to be/become if we are to be successful in future.
This approach is described in a publication called “Catalyst Councils” and is essentially a policy approach recommended by those on the right wing of the political spectrum . “ Potential service options”: include outsourcing, shared services, joint ventures, strategic partnering. This approach explicitly recognises the importance of economic growth to the success of localities; this is not just about the cost of delivering services or a debate about which services should be cut. The idea of the “John Lewis” model – a greater use of social enterprises in service delivery has attractions for right wing politicians
The APSE publication entitled “The ensuring council” deliberately sets out to be “an alternative vision” for the future of local government. It places much more emphasis on the in house delivery of services, and spells out some of the strategic benefits which that approach allegedly delivers – for example the ability to co-ordinate resources and strategic objectives in a way which the outsourced services model does not deliver. It explicitly presents the commissioning/outsourcing model as a market orientated approach focused on individual outcomes as opposed to a more community focused approach demonstrated by the “ensuring” council. This is an arguable policy position but it usefully highlights a much neglected theme which is that there are indeed some benefits in the “in house delivery” approach. It also acknowledges that within the “ensuring council” model there are differing perspectives ( as illustrated on the next slide)
Mariana Mazzucato in a provocative Demos publication argues for a more interventionist and active role for the state in delivering economic prosperity. She does not believe that the private sector alone can deliver prosperity, with local government simply providing the “right conditions”. Her controversial ideas include reducing direct transfers to SMEs through small business rate relief , and she describes local enterprise zones as “a distraction”. She argues t hat if we are to encourage green technology in particular the state will have to take a more active role in taking action and accepting risks. Also in the area of technological innovation and creating the “knowledge” economy, the state needs to take the lead role.
The core message of this approach comes from both traditional labour and conservative viewpoints. The commission on the future of local government set up under the chairmanship of the leader of Leeds City Council set out 5 key recommendations which are outlined in the above slide. Whilst economic growth is at the core it is local authorities which are at the centre of activity and economic regeneration, and the approach is balanced with attention to social policy objectives. The Rt Hon Lord Hestletine of Thenford CH was the main author of “no stone unturned” which came up with 89 recommendations. He sees local enterprise partnerships at the centre of ensuring the economic prosperity of local areas. Controversially he also recommends all two tier local authority outside London should pursue an approach towards unitary status.. Partnerships and collaborations between local authorities which reinforce economic growth are to be supported. Areas should bid competitively for funds for economic growth in their areas, ( the funds are consolidated from various government departments ) and there should be more devolution to the private sector. He emphasises skills as the foundation for skills and prosperity, and changes to the skill sets of civil servants and the way the civil service operates.
A theme of structural reform is taken up by the NLGN “The localist Manifesto” publication which explicitly advocates combined authorities. These would give powers to councils which formed city-wide or shire wide combined authorities. These would be a new strategic layer of governance designed to drive economic development and facilitate shared services. There is a hint that this idea is already being taken forward through the Chancellor’s Autumn statement, “ In recognition of the importance of partnership working, the Government will also be supporting ( the implication is financially) local authorities that wish to create a combined authority or implement other forms of collaboration (for example, shared management)” . The localist manifesto also advocates compulsory voting, which is not likely to be taken up, and introduces the possibility that local authorities could bid to deliver services currently delivered at a national level ( eg court administration, benefits, and the skills agenda)
The picture of Joe Chamberlain reminds us that Victorian Britain, there was an age of municipal entrepreneurship. It was an age of investment ( sewerage, road and rail infrastructure) which dramatically improved the health of populations like the City of Birmingham Those who advocate a more entrepreneurial approach ( APSE published “Municipal Entrepreneurship” in 2011) stress that this is right for our times. Since 2011 it has become even more essential. Commercial skills are important for contract design, procurement and negotiation. They are essential to increase income, which helps to balance out loss of government grant. Additionally and importantly, new homes bonus and business rates growth and both providing new incentives for local authorities to give much more attention to economic and housing growth in their areas, because success in these areas underpins their own economic success .
The “Future Councils” publication aimed to look at three main scenarios for the future: 1. California : a world where local government becomes weaker and struggles to balance the books, the public become more assertive and active and local government fades into the background but some raise more income and back office shared services are commonplace. 2. United Provinces : Councils band together to promote growth and efficiency – areas like Bristol and G Manchester move to federal governance arrangements 3. Recessions : There is a prolonged failure of growth. Some councils become technically insolvent. Others divest their services to the private sector. The big society does not take off. The publication envisages the emergence of four types of local authority responses: It classifies the councils in the following ways: Residual: most services externalised. Main role is market management Clustered :pooling to manage regional inward growth. Commercial : selling services to other Councils. Pay as you go for residents Lifestyle : promote own brand identity eg green, healthy, cultural
The discussion paper “ A new model for public services ” by the University of Birmingham helpfully puts the different approaches into a “Typology” set out above The document points out that an area that is less frequently discussed is the importance of democratic legitimacy and how that is translated into “agency” turning resources into outcomes through effective political and managerial leadership. The next slide demonstrates how the different models relate to the retention and distribution of internal and external power.
The Future Councils publication , in envisaging the different approaches ,contains this summary table of what it thinks local government will look like by 2015.
There is ( as the “New model for public services?” document highlights perhaps a tendency for local government to look at structures and at tangible service delivery models rather than address the democratic issue - the inter-action of local government with its local community. It is just as important to look at how these interactions are changing. Jocelyn Bourgon described well the shift in emphasis; In this slide government acts on its own, through the exercise of legitimate authority. It concentrates on performance( of services) and compliance ( with regulation). Acting alone: when government can frame the issue on its own When government can achieve the outcome on its own When government has reasonable knowledge of the impact However in acting in this way if fails to unleash the potential of a more “emergent” and unpredictable way, but which, through more dynamic engagement with its local population, produces additional benefits – enabling people to influence action, exercise choice, and enjoy the benefits of transparency and greater accountability ( see next slide)
A dynamic approach holds great potential as it Allows for a broader range of choices in combining govt authority and the collective power of society Enhances the frequency and diversity of interactions within the system thereby enhancing the timeliness reliability and relevance of the information Captures new knowledge not otherwise available to government Stimulates creativity and innovation Allows multiple stakeholders to frame issues together creating the possibility of a stronger commitment to action Allows to aspire to results not available through govt acting alone Government can harness the power of networks to achieve results by connecting actors, solutions and choice opportunities as a means to achieve public goals
The document “Unlocking local capacity” picks up this notion of active citizenship and stresses the importance of the approach in an age where local authorities cannot any longer afford to do all the thinks they have, over time, come to do. It also makes a good case for the benefits to individuals and communities of greater co-production and personalisation of services. It is also good for places, producing greater community cohesion and wellbeing and a shared sense of pride and culture in the local area.
Other ideas are increasingly being harnessed to amplify the impact of public policy actions. Two in particular are the ideas of “nudge” and “networks” Behavioural economics is increasingly important in service design. It can help to influence peoples choices ( encourage people towards healthy living) It can help us in marketing services like building control and leisure to increase income It can help us to incentivise people to use less energy and recycle more It is important in influencing the way we communicate with our customers and our citizens The examples in the slide show how different approaches can deliver better results than less targeted and tailored efforts
The effectiveness of a theory will be contingent on the type of network upon which it is enacted When network effects are important, even small changes brought about by incentives can be magnified greatly Network effects are increasingly important as we seek to Manage demand Encourage people to exercise and try to counteract trends towards obesity Influencing behaviours like eating, smoking and recycling Scale free most people have a small number of connections to others. A small number of people are connected to very many others. These “hubs” may spread a powerful influence over the behaviour of other agents. The probability of a cascade effect is small but possible if enough “hubs” adopt the behaviour. Small world these comprise overlapping groups of “friends of friends” A few members of the group have long ranging and more distant connections, raising the possibility of the spread of ideas, choices and opinions across disparate groups if these are targeted. You don’t necessarily know however if a cascade will spread across the network Random networks eg catching a cold by sitting next to a stranger on a bus. There is still a chance of a cascade – you have to have a blitz and try to persuade enough people to change
The diagram above ( from the publication “The Toyota Way”)
Different models and different methods for different times
Times are changing: different models and different methods for different times
Catalyst CouncilsEvaluate potential service optionsEmphasise solutions that promote economic growthMutuals and cooperative modelsParticipate actively in pooling resourcesBecome better commissionersRelearn skills of municipal enterprise
Source: APSE: “The Ensuring Council” The Ensuring CouncilEnsuring Council Enabling CouncilStewardship of place Strategic commissioningcore services in house + public employment Preference for private and voluntary sectors as service providersMaintain core capacity Divestment to alternative providersCollaborative relationships Contractual relationshipsLocal representative + participative Market democracy and individual choicedemocracyCollective community outcomes Individual user outcomesJoined up services meet needs of Fragmented services lacking strategiccommunities and delivering wider strategic coordination to deliver wider policy objectivesobjectives
Ensuring Council: different viewpoints• Public stewards: In house services give best opportunity to control costs and deliver value for money. Strategic advantages of in house provision. LAs need core capacity to help shape social economic and envt wellbeing.• Local Brokers: more open to different models of service delivery where can add real value. Sceptical about ability of voluntary sector to provide public services in long term.• Public Valuers: more focused on LA as community leader and democratic guarantor. Keen on empowering local communities to achieve socially just outcomes for all citizens. Favour more mixed economy.
The entrepreneurial state• Previously a picture has been painted of the state as “bureaucratic,” and “meddling”. Even described as “enemies of enterprise”. All that is required is to provide the conditions for innovation to flourish.• This view is challenged and it is proposed a far more proactive role is required. It is argued there is a need for a targeted, proactive, entrepreneurial state, able to take risks, harnessing the best of the private sector for the national good over a medium to long term time horizon.• The state as lead investor, and a creator of the knowledge economy.• The state defines new radical technologies rather than just reacts to them.• The state even takes on the most risky entrepreneurial risk taking and creates new types of economic dynamism
Civic Enterprise1. Becoming civic entrepreneurs: whole place leadership to replace managerialist hierarchical partnership approach. Roles for Councillors.2. Stimulating jobs, homes and good growth. Local govt creates conditions for enterprise. Invest in infrastructure and skills. Maybe TIF. Share risk and provide loan guarantees, municipal bonds.
Civic Enterprise contd.3. Establish 21st century infrastructure: eg ultrafast broadband, low carbon energy, cheaper fuel bills, housing for first time buyers and older people and transport systems. Multi use public service hubs.4. A new social contract. Collective action led by local government to support needs of older people families and children. Includes troubled families initiative.5. Solve the English Question. The Barnet Leader of Leeds formula should be reviewed. English City Council: Keith Wakefield devolution. City deals
Municipal Entrepreneurship• Increasing importance of commercial skills• New ideas and practices brought into implementation• “Catalysts” identify opportunities for innovation and transformation ( a key skill is listening to and engaging the workforce); “stewards” establish the collaborative arena and the interactions between stakeholders which enable creative thinking and innovation ( a key ability is to overcome silo thinking) ; “Mediators” manage and diffuse any potential conflicts in the process, arbitrating between different stakeholders
Ensuring Commissioning Political Perspectives Managerial Perspectives Civic entrepreneu Enabling Text EasyCo-operative Local Co- Perspectivesordinating Catalyst Source: University of Birmingham: A new Model for public services
The shape of local government by 2015.Ideal type council Core purpose Approach to Attitude to Councils that might services communities pursue this routeNeo traditional Community Mostly in house but Community N Mets + counties, leadership + reviewed for cost + engagement through districts not facing economic growth effectiveness democratic structures deep cutsPragmatic Varies- generally to Review on case by Varies on service by Bulk of local protect vulnerable in case basis with service basis government face of cuts varying degree of radicalismCommissioning Customer service Move to arms length Communities Southern Countiescouncils delivery, emphasis supported to rapidly on markets and take over divested choice servicesCo-operative Community Co-produced with Blurred line between Next generationcouncils development citizens taking on service provision and labour councils in more responsibility community activism London N West and parts of north EastSource: Future Councils, S Parker
Source: J Bourgon (2009) PUBLIC RESULTS Performance Emergence Societal System wide Networks Agency GOVERNMENT GOVERNANCE (AUTHORITY) (COLLECTIVE POWER) AND Provide services Empower Transparency/ Partner Enable Protect Tax/Spend Legislate Accountability Access Voice Choice Compliance Action Resilience DEMOCRATIC RESULTS Unpredictable Predictable
Source: J Bourgon (2009) PUBLIC RESULTS Performance Emergence Societal System wide Networks Agency GOVERNMENT GOVERNANCE (AUTHORITY) (COLLECTIVE POWER) AND Provide services Empower Transparency/ Partner Enable Protect Tax/Spend Legislate Accountability Access Voice Choice Compliance Action Resilience Predictable DEMOCRATIC RESULTS Unpredictable
Active Citizens• Councils shift public expectations. Instead of asking “what do you want?” and “what should the Council do?” ask “ what assets do all of us already have?” and “what can we all do to make things better?”• Provide citizens with advice, skills and confidence to be active• Role for Councillors• Build strong relationships with third sector
Behavioural economics How to influence individual decisions• Incentives: lower pricing structures/rewards• Framing; frames are powerful nudges• Spotlight effect: people think others are looking at them more than they are ( odd one out)• Priming: asking people in advance ( voting)• Defaults: pad the path of least resistance ( organ donation, continuous subscriptions)• Give feedback ( eg energy monitor)• Structure complex choices• Collaborative filtering ( eg Amazon)• Social influences and peer pressure
Network theory• Scale free networks• Small world networks• Random networks
Transformation Problem-solving (continuous improvement throughRuthless reflection ( hansei); and continuous improvement ( kaizen)) People and partners (respect, challenge and grow them) Process (eliminate waste) Philosophy Base mgt decisions on a long term philosophy Even at the expense of short term financial goals
Sources• Catalyst Councils: (Sept 2012) A new future for local public service delivery: Daniel Crowe, edited by Steven Howell. Foreword by Rt Hon Oliver Letwin MP Localis, Capita Symonds• The Entrepreneurial state: ( 2011) Mariana Mazzucato: Demos.• Unlocking Local Capacity: ( 2012) Why active citizens need active Councils . Rob Francis OPM• Future Councils: Life after the spending cuts ( Sept 2011) Simon Parker: NLGN• “Nudge: Improving decisions about health, wealth and Happiness” (2008) R Thaler and C Sunstein Yale University Press• No Stone unturned; In pursuit of growth (Oct 2012) Rt Hon Lord Hestletine of Thenford CH
Sources cont• Commission on the future of local government ( July 2012) Leeds, Glasgow and Cardiff Councils.• New Governance and Public Administration: Towards a Dynamic synthesis: (Feb 2009) Hon J Bourgon• The Ensuring Council : An alternative vision for the future of local government ( May 2012) APSE• A new model for public services? ( Oct 2012) discussion paper .University of Birmingham• Connected: the amazing power of social networks and how they shape our lives (2010) Nicholas Christakis and James Fowler. Harper Press• Positive Linking: How networks can revolutionise the world ( 2012) P. Ormerod Faber and Faber
Sources contd.• The Localist Manifesto (2012) Principal author Simon Parker. The final output of NLGN commission comprising R Behr ( Chair) I. Johar, P. John, S. Parker, Dr. A Povey and C Staite