SOLACE | David Clark's Blog

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.

Potholes before profligate transparency | 18/06/2010

Transparency is a good thing. We should all know what politicians and officials are spending on our behalf; after all it is our money. At the moment these seem to be truths so unchallengeable that anything done in the name of transparency must automatically be the right thing to do.

But I am not so sure. If we are not very careful we will see the overblown regulatory industry, that inspects all aspects of the public service, morph into a new transparency bureaucracy. The signs are already there. We now know that IPSA, who regulate MPs’ expenses, had set up costs of £6.6 million, or approximately £100,000 per MP. As a tax payer, is this really value for money? In local government Mr Pickles, the secretary of state, is urging all councils to publish every invoice it pays over £500 in the name of “transparency”. For large authorities this would mean hundreds of thousands of invoices being published, and to what end and at what cost?

Central agencies have to publish invoices over £25,000. Why there is this anomaly, when some larger councils are bigger that some smaller government agencies, no-one seems to know.

Already the private sector is gearing up to service this new “industry” with software suppliers marketing products that allow invoices to be published in this way. We have already seen, with the rising torrent of Freedom of Information requests, councils having to dedicate scarce resources, not least of which is staff time, to the answering of questions when those resources would be better spent on services. I now see even more cash being dedicated to providing details that even the most determined taxpayer would deem irrelevant.

One of the prime duties of a public body in any democracy is to be accountable. It has a duty to give an account of itself, and then needs to have mechanisms in place that allow it to be held to account. All public bodies should be answerable to the taxpayer but local government publishing literally millions of invoices a year cannot be the best way. As a taxpayer, the next time a politician tells me that an initiative is being undertaken in the name of transparency I will just check to see if it is really of use to me. If not I shall ask them to use the staff time involved to fix the potholes outside my house instead.

Has anyone done the maths on jobs | 04/06/2010

You could say that this week saw a leak of what is to be in the budget. An article in the Yorkshire Post quotes Nick Clegg as saying that he is preparing special measures for those parts of England that will be especially hit by redundancies in the public sector. Citing South Yorkshire, the North East, North West and parts of London, the article clearly implies that Mr Clegg is envisaging mass job loss and sees some parts of the country, which have higher proportions of public sector workers, as being particularly vulnerable.

This is a quite interesting story in itself, but the piece goes further. It appears that Mr Clegg envisages that the support packages to these areas should go mainly to the private sector, to encourage them to employ the redundant public sector workers. On the face of it this sounds OK, but it does beg one or two questions. To begin with the argument of public/private has often hinged on the cutting edged competitiveness of the private sector as opposed to the supposed cushioned existence of the subsidised public sector. Healthy and competitive businesses should not need an effective wage subsidy and surely those that accept it are moving into being tax payer supported and thus presumably guilty of the faults that are said to be the province of the public sector.

The second area of concern must be the overall impact on the taxpayer. Picture this scenario. A low paid public sector employee is made redundant. The taxpayer pays the redundancy costs and picks up the new costs of benefits and the costs of the public sector workers administering the benefits. The worker is now on a lower income and thus not contributing to the overall tax pool. This is a further burden to the taxpayer. The former employee takes a job with a private sector company. The company claims a state subsidy. This subsidy is administered by some further public sector employees. These are two additional costs to the tax payer. My only point is .......has anyone done the maths?

If a lower paid worker on, to be generous, £18k goes through the process above, is the taxpayer any better off? I am afraid I do not know the exact answer, but it looks a close run thing to me. It would be a shame if hard working public sector employees are put through all this pain, and the exchequer is no better off. If anyone has done the maths, please let me know.

Six billion was just a curtain raiser | 27/05/2010

There was something not quite right about this week’s political announcements. Ordinarily a £6 billion package of in-year cuts followed by a Queen’s Speech packed full of bills would be enough to set political pulses racing. Well, in some places it has. Local government services stand to lose about a third of the announced cuts and it seems that the impact will be felt differentially around the country. There is certainly enough in the legislative programme to keep us all going, but as always with Bills it is the detail that is the tricky part. And yet...and yet...something is wrong.

The Queen’s Speech and other announcements feel like the overture for a dramatic piece that is yet to come. We now know the cast, we have a vague knowledge of the script, and in this overture we can vaguely discern themes that are to come. But the curtain is not yet up, and we have yet to see the hero, or villain of the piece. For waiting in the wings is the Budget, a piece of drama which, whatever is in it, will define the direction of this nation for at least a generation.

The Institute of Fiscal Studies have once more shown us the scale of the task by recasting their figures slightly after this week’s announcements. The key question of course is the mix between taxation increases and spending cuts. But we still need to find a combination of both that delivers savings of £69 billion a year. Even increasing VAT to 21% would only raise less than a quarter of that (£15.75 billion), so there is still much cutting to be done. Of course this government is a coalition. In their individual manifestos, the Conservatives suggested that the cuts should be deep, but that the pain should be over (for the survivors!) by 2015–16. The Liberal Democrat manifesto suggested a finishing date of 2016–17, but with slightly fewer savings to be made. In this new world a compromise will need to be reached, but no one is thinking that the pain will be over any time soon.

Seize your bailiwick and change the way we vote | 14/05/2010

I returned from my holiday to discover that all had not gone well in the general election. No I am not talking about hung Parliaments and coalitions, but about the process of the election itself. Cutting through the howls of outrage, it seems that in some places the polling stations could not handle a late surge of voters, and in others the need for enhanced verification of an inordinate number of postal votes meant that counting was a slower process than usual. Thankfully these issues were hardly endemic.

Now it may be that some mistakes were made, and we will know more when the Electoral Commission reports in a week’s time. In the meantime it is worth reflecting on the underlying problems of the system. All voting systems need to aim for a fraud free, 100% accurate, system. They need to be simple and accessible to encourage voter turnout and involvement, and they need to deliver a quick result. In truth the last point is more important to the candidates and the media than to the population at large but it is still a worthwhile goal.

I and other commentators have been arguing for the best part of two decades that these goals are not incompatible in themselves, but become increasingly so unless we reform the voting process. Possible changes to the system that could be thought about include:

Altering the days and times for people to vote. I have always thought that allowing voting over a whole weekend makes more sense than a time limited session on a Thursday.
The introduction of an electronic register, e-voting and who knows, e-counting?
The opportunity for people to vote at any polling station in their constituency, or maybe even further afield.
A radical rethink of postal voting and voter registration.

With a change to the system of voting being muted by the new coalition, this is a golden opportunity to overhaul the creaky process of voting as well. Let us hope that the new team at the Ministry of Justice, whose bailiwick this is, seize the moment.

What we would like from the Election | 07/04/2010

Local public servants will have their own individual views on the outcome of the general election, but collectively there is a common wish list of what we would like to see from an incoming government. First, a consistent medium term strategy. If expenditure needs to be cut then let’s plan a reduction over a decent time period, rather than indulge in a macho slash and burn exercise from day one. Second, see local government as a partner in both the planning and delivery of expenditure reductions. Local authorities are best placed to know how to deliver savings without destroying communities or decimating frontline services. Third, reduce the overseer class. There are too many expensive regulators examining local government. Some should remain, many should not. Fourth, keep pushing for joined up services between central government departments and local government. Call it total place if you like, but crucially there is still too much overlap and too many meetings, and both need to be reduced. Fifth and finally, stop knocking public employees at every level. In recessionary times public workers are part of the solution, not the problem. As the Institute for Leadership and Management put it this week “Policymakers need to recognise that public sector managers can be allies in this campaign and must not see them as a barrier to achieving their goals.” If I could place one thought into an incoming Cabinets mind, I think that would be it.