SOLACE | David Clark's Blog

CSR - Lost in the post | 22/10/2010

And so the first big bombs in the CSR war have gone off. Councils will lose 25% to 30% of their funding over the next four years. These cuts will be front loaded so we will definitely be seeing further redundancies in the current year. Whilst the overall picture is grim, and certainly grimmer than the CSR announcement itself would have you believe, the position for many authorities is still not clear. The grant system from which the government intends to cut funding has itself been changed. This adds some obscurity to the actual funding a Council may look forward to. It is said that the Deputy Prime Minister is concerned about the lack of detail and clarity in some of Communities and Local Government’s proposals, and there may yet be changes, which introduces another degree of uncertainty.

All over the UK councils will now be looking at the announcements on grant, modelling the massive cuts to capital spending, trying to work out what the changes to council house rents and housing benefits will mean to their communities and to their own income streams and then looking at what increased demands for services, that are always part of a recession, means for their business planning. And for some they will still only be able to see half the picture. Decisions on grants and formulas will now be made in Government departments that will have a crucial impact on communities across the UK. For many the bombs have only just started to explode, there are more to come.

And of course this level of reduction cannot be ring fenced to the public sector. I have been predicting for some time that this level of both size and speed of reduction will also decimate companies that are in local government’s supply chain. Well now, after the event, both PWC and KPMG have said that this will destroy many private sector jobs. I am grateful for their support, but it may have been stronger if they had issued their warnings prior to the Chancellor’s speech. See the PWC view here and the one from KPMG here.

And finally, a small piece of etiquette was apparently overlooked by Mr Pickles’s team at CLG this week. After announcements such as the CSR the Secretary of State traditionally writes to all Council leaders and to Chief Executives outlining why the government’s announcement are good news (and they are always couched as good news irrespective of the announcement!)

It seems that this week he forgot to post the ones to Chief Executives. Well it is a new set of ministers and mistakes do happen. If you want to see what he would have said, and did say to leaders, click here

Bonfire of the vanities | 08/10/2010

Two sides to the same story. According to yesterday’s Financial Times the busy beavers at Her Majesty’s Treasury are toiling late into the night ‘re-profiling’ a number of budget cuts. Apparently some of them are not as big a cut as they look when you take the cost of breaking contracts, exiting leases and paying staff off, into the equation.

Today’s Guardian, amongst others, goes further. It informs us that the Audit Commission closure alone may take ten years before it delivers any real savings, due to its winding up liabilities. Other bodies that have been abolished by Ministers have similar tales to tell so that, in the short term at least, many so called “quango” abolitions will add to the governments costs, not reduce them.

So what has gone wrong? How is it that with less than two weeks to go to Mr Osborne’s announcement of the Comprehensive Spending Review, so much frenzied activity is going on to look at whether any of the announced big savings are anything of the sort. Is this a case of government incompetence? Is it naivety? I suspect it is neither. You can put this down to inexperience.

Whitehall Civil Servants and new Ministers are simply not used to making wholesale redundancies and closing departments. They made the basic error of allowing the politics to lead the mathematics, and thus announcements were made before the management calculations had been completed. It is all very well to have macho cabinet star chambers and schoolboy-like statements of a ‘bonfire of the quangoes’, but it is better to work out carefully which cut will save what, before you utilise a tabloid newspaper or breakfast television show, to tell the nation how much will be saved.

Perhaps national players should learn from their local counterparts. Council cabinets and management teams do have experience of closing services and losing staff, albeit not on the scale they are now being forced to look at. But it is the fact that they have such experience at all that makes them special. No Council, politically or managerially, would dream of announcing detailed savings plans without substantial work having been undertaken and the real costs of any proposed reduction strategy having been taken into account. Maybe the coalition government should learn more from its local politicians. They already have experience of running public services and experience is a useful thing.

Publish and be damned | 01/10/2010

In a week that has seen more councils having to issue precautionary redundancy notices and with the comprehensive spending review looming even larger on peoples horizons it may seem a little odd that the Communities and Local Government department has chosen to comment on the rather arcane matter of local government newspapers. According to a press release issued on 29th September, Communities Secretary Eric Pickles intends to set up new rules to stop municipal newspapers being published more often than four times a year. This seems a rather strange priority for a Secretary of State. Various newspaper reports have expressed Mr. Pickles’ apparent concern to curtail “propaganda on the rates” In fact this isn’t necessary. An Act of Parliament in 1988 specifically details what a local authority may or may not publish precisely to avoid any possibility of propaganda. If the Secretary of State believes propaganda is still being pumped out at taxpayers expense then really he must refer this matter to the courts.

The problem is now for local authorities. They have a statutory duty to inform citizens. Ben Page at IPSOS Mori has pointed out that information provided by councils about their services is a key indicator of the satisfaction with the local authority. Furthermore proper information for citizens is a cornerstone of democracy. Professor John Stewart famously pointed out that in order to be held to account a local authority must give an account of that which it is doing. Council papers have a key role in this. With the best will in the world, a local independent media will not report all the goings on of a local authority; the opening times of libraries, swimming pools and so on; it is up to the council to do this. At a time when the government is so keen on transparency, curtailing the opportunities for an authority to spell out precisely what it is doing seems to be a little odd. Nobody would support the idea of propaganda coming from a local authority or indeed party political propaganda coming out of government departments. This curtailment of a citizens’ rights to information seems to me to be a strange thing to be doing at this moment in time.

Good lesson from the private sector | 24/09/2010

It will be the SOLACE Annual Conference in a few weeks’ time. I think the format is pretty much what one might expect, with expert presentations, ministerial announcements and encouragements and opportunities for colleagues to get together to work on the problems of the day.

Most of the sessions are about the strategies and tactics needed to manage large, complex organisations during times of unprecedented financial cutbacks. The sorts of questions that we will be trying to answer are “how do you ensure that the most vulnerable in our society remain protected?” and “how can we maintain staff morale when so many cuts are anticipated?” So it may not be a sexy event, but it is practical and designed to help colleagues in their day-to-day working lives and save everyone from having to re-invent the wheel local authority by local authority. The numbers attending are broadly similar to the last time we held a similar event in Cardiff but I noticed that one or two familiar faces were missing from the list.

I met a Chief Executive who was not on the list to attend and asked him why. He explained that the council had made a decision that no-one should attend any conferences anymore. He accepted that this meant his organisation was no longer up to date on ministerial thinking and was not really learning new skills for new times, but that the constant drip of local media whingeing had worn his politicians down. Now, I will be sorry not to see him at the event, but that is life, or it would be if I had not discovered that this was in fact the tip of a very big and potentially dangerous iceberg.

It seems that, as a response to the financial crisis they face many authorities have cut back on not just conferences, but on all opportunities for training and development. Staff get-togethers of all sorts have been axed. Training events have been closed and staff development budgets have been slashed. “Ho Ho” says the saloon bar sage “a jolly good thing. These public sector whingers should stop having meetings and just get on with it”. Wrong. As both private and public bodies gear up to face unprecedented financial turmoil the need for people to get together to plan the way ahead is more vital than ever. Away days where the options are carefully explained to staff are a crucial management tool. Conferences and visits to other organisations are a very cost effective way of learning new tricks and testing your own ideas. The private sector know this full well, and in recent weeks I have been involved in many such events, where management teams have got away from the office, booked into a hotel, and spent a day planning the future. They see this as an essential process. The public sector is often being encouraged to learn from the private sector. The lesson they should learn from this is that cutting off opportunities for development and quiet reflection would be seen as foolish in private companies, they should see it as foolish too.

On a lighter note this week saw the Daily Mail write a “story” on the SOLACE event. If you want the view of a proper journalist on this then click here.

The cuts - Pay for beans and get nothing in return | 10/09/2010

Last week you went to the local shop. You bought a can of beans and it cost you 25p. This week you go to the same shop. They take 30p from you, but don’t let you have the can of beans. How would you feel about the ‘customer experience’?

This is the dilemma facing public services as the spending cuts start to bite. Many people will be experiencing lower incomes and higher taxes, at the same time that the services they have come to rely on, or at least take for granted, are withdrawn. The perception will surely be that they are paying more for less or indeed for nothing at all.

So how should the public services respond? Should they scrap the idea of the customer friendly personalised services model and adopt a NETTO response of only providing one type of everything, but always at low cost? Are we looking at a ‘pile them high and sell ‘em cheap approach’? Given that all of the funds come from the taxpayer does it matter if the services are directly provided or delivered by the private or not for profit sector, after all the money is coming from the same pockets?

In fact individual public entities, Councils for example, may well find ways to square this circle. Customised services are not necessarily more expensive when supported by smart systems and a multiplicity of potential providers. But it is inescapable that many services will be cut back, or withdrawn completely and that some provision that is currently free will become a paid for service. Inevitably there will be some in the higher earner brackets who no longer see that they have an investment in public services, as the provision of these services become even more remote from their experience and are targeted on the very poor alone. How long will people be content to pay 30p for beans that they cannot have, and that they perceive are being given to someone else?

This topic will be further discussed at the SOLACE conference. You can see the full programme here.

No phoney war - the jobs Blitz has been and gone for 30,000 | 03/09/2010

Is Britain’s public sector going through its own version of the “Phoney War”? Historians tell us that the period September 1939 to April 1940 was so called because, despite Britain having declared war on Nazi Germany in that September, few shots were fired in anger until France was invaded in the April of the next year.

Some observers are seeing this as analogous with the wholesale unemployment that they foresee as a result of the Coalition’s plans for reductions in public expenditure. The line goes that the first declaration was immediately after the general election in May, but that the real casualties will not be seen until after the Comprehensive Spending Review reports in October. Unfortunately for many this comparison does not hold up. Whilst it is undoubtedly true that October will see a step change in reductions, there are already casualties. Even the lowest estimate leads us to believe that some 30,000 jobs have already gone in local government in the last six months. Whole organisations have been either closed or told of their imminent demise. In local government the audit commission is, of course, the latest one. But for even the most fervent supporters of this policy of expenditure reduction there is a further worrying statistic.

A report from accountants Wilkins Kennedy stated that 168 firms in the public service supply business had collapsed in the first six months of this year. This was 47% up on the same period last year, despite an overall 5% decrease in all insolvencies over the same period. This, of course, does not cover the failure of hundreds of small businesses, who had supply links to individual public bodies. This is a salutary warning for those who say that the public sector must “take the pain”. The public sector does not exist in isolation and is a key part of the economy. Maybe for many the Blitz is about to begin, but for many, it has already happened.

Left and right hands of place based budgets | 29/07/2010

This week various pronouncements by the Communities Secretary, Mr Pickles, and by the Chancellor, Mr Osborne, could easily lead you to the belief that the Government has become converts to the concept of place based budgeting. This is a system whereby all of the tax pounds spent in a local area, be it by Councils, the NHS, central government departments or quangoes, are pooled to focus on the real local needs of citizens. The advocates of this system argue that it avoids duplication and drives out huge amounts of cost.

The problem is that Messrs Osborne and Pickles do not appear to have told their friends. The Departments of Education and Health seem to be travelling in the opposite direction. “Free” Schools and GP commissioners, are to be incentivised to treat the tax pound they receive as their own money, not to be pooled or shared with anyone else. This week’s consultation document on policing is also completely against the grain of sharing of budgets.

Irrespective of any views as to the merits of directly elected police commissioners the document makes it clear that all responsibility lies with this one individual, who may listen to others but has no duty to co-operate. Indeed the document goes out of its way to set up a new and separate bureaucracy and governance model. The document says that the Police Commissioner will “need to appoint and lead a team to support them in their important responsibilities.” And, “the Government will, for example, require the appointment of an individual with appropriate financial skills, and establish process safeguards to ensure that appointments are made with propriety”.

It goes on to say, “We will create Police and Crime Panels in each force area drawn from locally elected councillors from constituent wards and independent and lay members who will bring additional skills, experience and diversity to the discussions.” And, “they will be responsible for requiring that their forces’ neighbourhood policing teams are having regular beat meetings at times and in places that are widely advertised”. The document goes on to detail a bureaucratic infrastructure to ensure transparency (or the government’s version of this concept) and Freedom of Information compliance.

In local government speak what is being suggested is that the Commissioner hires a Finance Officer and appoints a Monitoring Officer, and establishes a devolved committee system. Why?

If the Government is serious about sharing services and place based budgets this looks very odd. Could the commissioner be obliged to contract with a local authority to provide all of these functions, since it already has exactly the same duties and has staff to deliver them? This would cut costs at a stroke and more likely lead to greater cooperation, budgetary and otherwise. As to committee structures, my local authority has been holding ward events, with the local police constable there as well as others, for nearly two decades, and they are far from unique. It is as though the Home office has no idea as to what is already there on the ground, and is recklessly re-inventing a system that merely duplicates an existing one.

If the Chancellor wants all of the savings that place based budgets can deliver, he needs to nip round to some of his Cabinet colleagues and explain it to them, before they set off in totally the opposite direction.

Baby P - Is another opportunity going to be lost? | 16/07/2010

I have often thought that the Director of Children’s Services job is one of the toughest jobs imaginable. Not only does it cover a vast and complex set of services, but it carries significant responsibility for many staff and services over which it has no control, and sometimes little influence.

The case of Baby Peter illustrates the problem. Long after the Director of Children’s Service in this case has been hung out to dry, sacked and hounded by the media, the wheels of medical justice have finally taken a turn. Last week Baby Peter's GP, Dr Jerome Ikwueke, was found guilty of a serious breach of professional duty by the General Medical Council. This is the second clinician to be charged by the GMC over the case. The first was Consultant paediatrician Sabah Al-Zayyat, accused of failing to spot that he was suffering abuse (he had a broken back) two days before his death. She was due to face a GMC disciplinary panel in February but did not turn up.

The role of the police in the case has also been investigated by the Met, and again, whilst failings were admitted, the police faced very little of the trial by media in the way that Sharon Shoesmith did as the Council’s director. Ms Shoesmith did not manage the majority of professionals involved in this case, it did not stop her carrying the can. The difficulty facing Directors of Children’s Services is that they are highly reliant on a complex network of professionals, many of whom they have to take on trust. They have managerial responsibility for some, in education and social care. But a police or healthcare professional can only be assumed competent and cooperative until proven otherwise. In other words, DCSs are expected to carry the risk of a variety of professionals’ competence without having the authority to do anything about it.

With a very young child this is even more important. As a father of a one-year-old I know I have had interactions with a wide range of health care professionals, but until my son approaches school age I shall not meet anyone who has even the remotest managerial link to my local authority’s DCS even though, allegedly, they have some form of responsibility for my son’s welfare.

In my wilder moments I have thought that, under the banner of the Government’s transparency agenda, the job should be retitled: “Director of the Council’s Children’s Services and of those other children’s services that bother to turn up and tell me what is going on”.

But the point of this piece is not to be backward looking. The Coalition Government has announced two major planks to its legislative programme; free schools in education and a massively enhanced managerial role for GPs in health. There is some ideological coherence to these moves, since they both imply that a system with a large number of smaller independent suppliers or commissioners will drive up health outcomes and educational attainment. Now, some people believe this whilst others think it laughable, but whether you are a believer or not, no one is denying that it will drive up complexity.

For Baby Peter and many others it is already too late to help, but the government must realise that GPs and schools are in the front line of child protection and any changes should reflect this. With so much change being thrown into the system there is a real danger that complex inter-agency issues will be seen as an afterthought that can be “sorted out later”. Wrong. Child protection is too important to be a secondary issue. Changes to schools and health need to be undertaken in ways that will enhance coordination and drive out risk, otherwise another opportunity to protect children will have been lost.

Looking for answers when you do not know the questions | 02/07/2010

Whatever you may think of the economic strategy being pursued by the Coalition Government, it would be churlish not to acknowledge that in some areas they are pursuing very sensible reforms. Over in the department for Communities and Local Government Eric Pickles has already abolished the Comprehensive Area Assessment system of inspecting councils which has to be a good thing. Over recent years inspection has grown out of all proportion into an industry costing the taxpayer billions of pounds, and reining it back is long overdue.

He also appears to be a fan of David Milliband, who Whitehall watchers may remember had a short stint as Secretary of State in the same department. David came up with a policy of “double devolution”. Whilst he had moved on before anything could actually be done under this banner, the memory obviously lingers. Essentially his view was that power should be devolved from the centre to local government, so long as local government then instantly devolved it again, to citizens and communities. This appears to be a thread in the current localism thinking. It seems that in cases where cuts have to made, citizens are to be consulted, and may even be able to vote not to close a particular facility. Power indeed is to be devolved to the people.

In a recent speech in London Mr Pickles also promised that he would abolish one of the biggest blocks to local democracy- council tax capping. What he said was he would like to see it replaced by local referenda on tax levels, rather than a centrally imposed cap. One must agree that this is more democratic, but I suspect that the net effect will be the same since I cannot remember a case in history where people voted for increasing tax burdens. Let us hope though that initiatives surrounding referenda on service reductions combined with other referenda on tax levels are part of a thought through strategy or there could be trouble brewing.

There exists a good working model as to what happens when voters can vote on service levels and on tax levels; it is called the State of California, where the proposition system allows citizens to do just that. Essentially this system allows citizens to put questions concerning a range of issues, including tax rises and service levels, on a ballot paper where electors can then vote on these propositions. Unsurprisingly citizens have consistently supported low tax levels and high service standards. This practical example has been very democratic, but it is democracy at a high price. California now has debts of $63 billion (£41 billion) as a direct consequence of this process. I suspect Mr Osborne would be unimpressed if that were the consequence here!

Nevertheless the idea of consulting citizens and council employees at a time of cuts is a good one. No politician or professional manager should baulk at this idea. Over the years I have had a fair amount of involvement in local government consultations. If you are interested in some of the things I think I have learned, click here.

Final act in budget play still to come | 25/06/2010

We now have Act Two of the coalition’s three-act play. First came the Queen’s Speech and its attendant manifesto. Now we have the Budget, with some of the details of the tax rises and spending cuts fleshed out. But we must wait until October 20^th for the third and final act of this particular drama. That is the date set for reporting the Comprehensive Spending Review (CSR) that will set departmental budgets for the life of this Parliament. For those who receive or deliver public services, this final act will be the most important piece.

Whilst the Budget contains many items, for a large part of the population the main focus will have been on personal income and expenditure. Increases in VAT and changes to other taxes and benefits are complex, but most people can have a rough guess as to what the cumulative effect will be on their purses. The CSR is a more difficult thing to read. It will focus not on cash, but on service reductions. These can have as much or more effect on individual and households as income changes, but the effects aren’t always immediately obvious or transparent.

What we do know is that the Treasury is seeking a further £30bn of spending cuts by 2014-15. This will mean on average a 25% real terms cut by 2015 for all areas of government spend other than the NHS and overseas aid. Some commentators are seeing this as needing nearer 33% savings in many areas.

For those in local government the choices are very stark, and the risks very high. Many Whitehall departments still view local authorities as merely the local delivery agencies of centrally driven programmes. The danger for local authorities is that central departments overprune in those areas that directly filter down to local councils, and leave authorities with even bigger financial holes to fill.

Most competent authorities have already started planning for the radical reductions that they are forced to make. But it is already clear, these are not old fashioned salami slicing budgets, where a bit of fat can be trimmed off everywhere and the books can be made to balance. The choices facing authorities are as to which activities disappear completely and which can be afforded and must remain.

As the public sector goes through its toughest period in living memory, the Third Act on October 20^th will give us a greater insight as to what services will still be around in four years' time.