What is the best way forward from here?
Local Government Chronicle – 18 November 2010

The only certainty for local government is change. LGC and PwC's round table set out to weigh up the options, writes Mark Smulian

Local government expected to be denied money by the government's spending review. What it did not expect was to also be denied time.

But the cuts have been front loaded, rather than phased in over the review's four years, which has left councils with little time to prepare for the organisational and cultural change they must undertake to live within their newly reduced means.

Professional services company PwC convened a round table with LGC to debate the way forward.

Participants agreed that while the challenges were tough, the cuts also presented what Coventry City Council chief executive Martin Reeves called a "oncein- a-generation opportunity" to recast local government around residents' priorities.

They felt some services would have to stop - Harrow LBC chief executive Michael Lockwood had counted 700 that his council provides, and noted, "we are not very good at stopping things" - and others would be shared or outsourced to the private, community and voluntary sectors.

Mr Reeves said: "We will see a proliferation of shared management and shared services, which is sensible in efficiency terms, but are we just taking efficiencies out of services that shouldn't be delivered anyway?"

But amid this upheaval they wanted to find a way in which the objectives that communities and local politicians rate the most important could still be achieved, even if councils themselves were no longer delivering them directly.

They wanted, too, to avoid a slash-and-burn approach and make cuts guided by priorities.

Lambeth LBC and Barnet LBC have both hit the headlines with, respectively, their 'John Lewis' and 'easyCouncil' proposals.

Lambeth chief executive Derrick Anderson said it had evolved this 'co-operative council' model as "the one that really got hold of the idea about the local authority as a strong community leader facilitating those partnership conversations about what is in best interest of the borough".

He added: "My stance as a manager is if I were to go through the significant change required I would want it to be values-led and with a clear vision around what it is we are trying to do."

The task for chief executives was to hear politicians' priorities and then say: "If this is what you want to do with this borough in context of the resource envelope I think will be available, then these are the things you will have to do differently."

Barnet's model of offering different service levels at different prices had similar aims, its chief executive Nick Walkley said.

But he warned: "I'm worried that what we try to do is to find a simple way ahead but this has got to be about letting go of some things. The future for some services is for citizens to get together to provide solutions."

Brighton & Hove City Council's move to become a commissioning body is among the more radical responses to the cuts, but Brighton & Hove City Council chief executive John Barradell said this, too, fitted into an approach of discovering community priorities and ''My narrative is not about structure but about what the city expects public services to provide then focusing on their delivery by whatever proved best and most affordable.

"Form follows function, and the really critical point is the change from a departmental system to one focused around outcomes agreed by the city, so my narrative is not around structure but what the city expects public services to provide," he said.

That would need decisions reached on the relative value of, for example, economic development, education and roads, and "gets us away from what services being provided to what priorities will you set based around money you are prepared to spend".

He said officers should "make no value judgment on who is delivering", allowing the community, voluntary and private sectors to proffer options. This would require a council organised around delivery of outcomes, rather than in the traditional way around professional skills.

Mr Reeves warned that when jobs were being lost chief executives needed "to be careful with our language, but the opportunity is there to build a new model".

He explained: "Our skill base has become highly technical and we need to get the right behaviours and qualities to deliver this new model, rather than have a fixation on professional and technical competence.

"We must think about the kind of people we want to drive this, rather than perpetuate models based on technical expertise, and that is a seismic shift."

Councils are "very professionally driven and almost act like a set of subsidiary companies", Mr Lockwood said. "Changing from that silo organisation to one that is outcome-focused is a very big jump but a massive opportunity."

The process of engaging with the public and using the feedback to design services was one where councils lacked experience, Mr Walkley said. "We have to make a transformation to focus on citizens because at the moment, hand on heart, that probably isn't there.

"How do you create a driver that takes citizens' needs, changes them into commissioning priorities and reflects them back out?"

A "deep gap" existed between the best of private sector customer focus and that found in councils, he said. An even deeper one might exist between the capabilities of the voluntary and community sectors and councils' new expectations.

Mr Barradell said councils would have to tell voluntary organisations that they could be advocacy or delivery bodies, but not both.

"You either advocate and give us a hard time, or you deliver something."

He advised against choosing only large third sector providers that appear to be low risk. "That would be utterly the wrong thing to do because the innovation is lacking there," he said.

"They have survived the set-up phase but the problem now is they cannot innovate. We must say to the voluntary sector 'we want you to deliver that outcome, how is up to you'."

PwC partner Ray Mills warned that if councils worked with community organisations and mutuals, "you do have to retain a function that helps you manage that risk or you end up with a situation where you have no control over delivery of services, and the outcome may be better for the short term, but can you manage those risk when things go wrong?"

Gaining that capability was one of the changes needed to the local government skill set, participants agreed.

Mr Walkley said human resources across the sector had been "downgraded and now finds itself in a space that is not helpful and there are real challenges to reinvigorate some bits of the organisation that have been allowed to lie fallow".

Changing working culture was about "dealing with blockages", Mr Lockwood said.

He estimated that 95% of staff worked hard and of the remainder, "we have been good at going round them or ignoring them, but now we cannot carry people now and if there are two people and one works hard and one does not, we distinguish between them".

Bridget Buttinger, Norwich City Council's deputy chief executive, was concerned the costs of trying to change a culture rapidly would worsen the cuts' effects.

"The time and investment needed for transformational and cultural change is huge and will end up cutting into services," she said.

"Some programmes we have started will take a year or 18 months to deliver; they are not short-term fixes so that is a real challenge for us."

PwC partner Chris Buttress said that one of the greater risks local government faced was "being unable to manage the extent of people change that will come in the next three to four years.

"Do you want a resource management provider to be working in partnership with you to manage the big risks, and do you want some frontline staff employed by other organisations? That would help you to manage flexibly, but it is going to be messy and altering relationships will take longer than would just getting some procurement savings."

Ms Buttinger said she found the challenges "really quite energising" but wondered "how do we keep the people we have got now? They have had quite a rough time."

Would political leaders buy into a future of fewer services and multiple providers, which could mean they faced a hard time from voters?

Mr Barradell said: "Clarity, bravery and closeness to place are critical and some decisions are potentially difficult for politicians if they have to stand up and defend things they have said 180 degrees opposite to three months ago."

Strong political and managerial leaderships would need to jointly develop a narrative, Mr Reeves said: "Politicians did not come into local government to close things and make people redundant, they came in to do something very special for their place, and if we can create a story with them I think we will come through this probably once-in-a generation opportunity."

He added: "We could create a once and for all set of services that genuinely meets the needs of the community and is sustainable and collaboratively designed.

"That is not going to be easy and things people have loved for a long time - and we have loved providing - will go. It needs brutal honesty, but these can be really exciting times."

Citizens receiving services based on their priorities, delivered by a variety of bodies, overseen by officers picked for their focus on results rather than professional competencies, led by politicians who admit their councils must do less, and all on fewer resources?

If even part of this comes true, local government will soon look very different.