• Trust
• Shared goals
• Regular and consistent communication
• No surprises
• Shared responsibilities

When those things are in place, 2+2 definitely equals 5 – and maybe more. Both parties benefit; both help the other out; problems are solved together; and resources are used efficiently – each party contributes what they do best. Most importantly – when something unexpected happens, you cope – and you cope together.

Now consider your relationship with your local authority. It may well be non-existent. But even if you do have regular contact with your local council – maybe you’re looking after a child with special needs, or an elderly parent; maybe you’re a shopkeeper or run a café – ask yourself honestly whether any of the characteristics above are true.

In a desperation to be efficient, local government has forgotten to be productive. It has focused too much on reducing the costs of supply – whilst ignoring the causes of demand. It has made processes much leaner without leaving time to explain to the customer what is expected of them in return. It has, in short, not given itself a fighting chance of building effective and productive relationships with the people with whom it is working.

Money and time gets wasted in huge amounts when the two parties involved – local authorities and citizens – experience distrust, poor and inconsistent communication, and unbalanced responsibilities. People fight over decisions; they fight over services, there are legal appeals and tribunals. There is nervousness about change, and political rigidity as a result.  Better democratic engagement is an essential (but not the only) type of relationship that can produce those positive benefits.

Sustainable (by which I mean cheaper and more productive) local government requires a total turnaround in its relationship with citizens. This starts with a better understanding of the values, goals and objectives of the other person in the relationship. At its best, local government does build these positive relationships. But this tends to be either in one specific service, or in a pilot scheme, and it can be fleeting. Relationships need to be consistent – and need to be worked at. This means taking the best approaches, and spreading them across all services – and doing it all the time.

If this feels like too big a task, or too expensive – think again. We can’t afford not to. And it can be done.

At the SOLACE event we hope to contribute some early examples of how we’ve done this with our clients, and very much look forward to learning from others about their experiences too.

I’ve just arrived back to the office from a roundtable discussion, jointly hosted by SOLACE and BDO, on how local government can harness social investment for social goals. The seminar is part of a joint research project which will lead to the publication of a report, to be launched at the Summit. The conversation was lively and extremely thought provoking with input from representatives across local government, the Cabinet Office and organisations which fund, broker, and deliver social investment.  Here are some of the key points/questions/provocations made during the discussion to fuel your thinking ahead of the Summit, where we will be exploring many of these ideas in more depth.

• Can local authorities be investors themselves without posing a barrier to market investment? Some are moving in this direction, cf. http://westminster.the-hub.net/public/  and Lambeth’s “Cooperative Council”.
• Investors need some political stability; there is a risk of a “systemic failure of politics that ensures social investors stay away”.
• What does social investment mean for the future role of Councillors? Is there a need to rethink and rebrand what being a local politician is all about – i.e. it’s about being a social entrepreneur?!
• Perhaps this time we really do need to fundamentally rethink the role of local government – what is it that councils are really there to do? Councils are not providers or direct deliverers, nor are they necessarily buyers; rather, they are enablers, enabling organisations to access capital. The Council as a platform for innovation.
• There is a dichotomy between the move towards national commissioning in some areas and community based commissioning in others. Procurement is also extremely challenging yet critical to success.
• “Markets that stick around are markets that grow organically” – but organic growth is slow growth – so how can local authorities speed it up?
• Alternative models of Social Impact Bonds (SIBs) could make the community payback aspect some kind of community engagement, such as free membership.
• Could local authorities use their assets to provide some second tier guarantee to underpin the market?  I.e. sweating an asset harder rather than changing its use – but who’s asset is it, the community’s or the council’s?  

What do you think…?

Better management of public sector property and built assets has rightly come under the spotlight during the local government cutbacks. Estimates vary on what the local authority estate could be worth, with recent reports putting a value on it of circa £250 billion. Whether or not agreement can be reached on the exact figure, this is a very big number, and clearly a significant area of opportunity.

A recent report by the Westminster Sustainable Business Forum suggested that local government could reduce the space that it occupies by 20-30%, and the running costs by up to £7 billion.  This level of saving is not going to be achieved by trimming running costs and selling off a few old office blocks alone. Instead, local authorities need to be bold and in some cases ‘spend to save’. And here comes the rub… spending money on ‘new council offices’ or even technology to enhance efficiency is prone to grab the headlines for all the wrong reasons…

However, the fact remains that many local authorities operate from a dispersed property portfolio which does not make the best use of their estate, and does not necessarily meet all their operational needs. A more effective use of these built assets could generate significant efficiency savings whilst unlocking wider benefits for local communities, by catalysing regeneration and growth.

The local elections in May gave the Conservatives a firm hold on local government in many parts of the country. This could be used to their advantage if councils are to push through cuts at the local level to deliver against the national government agenda. But with national policies coming under ever greater scrutiny, decisive action is needed in the early part of councils’ electoral terms if local authority property savings are to be fully realised.

What is clear is that the time to act is now, before the political and social will to make difficult decisions wanes. By the next term of local elections we may see a swing back to a large number of councils having an alternative controlling party, which, coupled with hopefully a more buoyant economy, will make transformational decisions about council property use less common.

Being efficient in the use of property assets should not be a political issue, but in reality there is a shrinking window of opportunity to achieve savings.  Local authorities that make bold decisions now are likely to be in a stronger position when that time comes.

As the seasons change and autumn approaches, most councils begin the annual round of budget setting where options for reducing services are weighed against each other and officers and members have to grapple with achieving what is often the least worst outcome. Having been part of that annual process for many years and knowing the size of the reductions that will be required again this year, I am struck by the different approach that is taken to managing costs in the private sector and how this creates a real tension in operating partnerships.

The key differentiator is the amount of time spent managing costs. For the private sector this is critical to driving profit and shareholder value so there is a relentless focus on looking at this and targeting managers to make the money work for the business without compromising customer satisfaction. For the public sector the focus is much more on setting a budget to deliver a level of service that is not always specified and reviewing spend against that aiming not to go over budget. When you apply these different approaches to partnership arrangements, it can create dissonance between the partners as the consequences of each system play out.

We rightly spend a lot of time focusing on contractual and performance indicators when forming private/public partnerships. I wonder if a little more time spent on understanding and learning from our respective approaches to managing finance might build better outcomes for the taxpayer and shareholder.

I have been covering the local government sector for a quarter of a century and while I have seen immense change I have also encountered much that has not changed, not least at middle management level. As many leaders and chief executives have grumbled to me: ‘The frontline gets it and so does the top tier. It’s the middle which doesn.’t.’

Often local government likes to believe it is unique in having to deal with a fast-changing environment. Try telling that to our printers, some of whom were around in the days of hot metal and are now entirely digitised or to a retail store manager or to a music company executive. Local government, just like all sectors, has undergone change, but it is certainly not alone in this experience. One might even argue that the past decade of above average grant settlements has made it less exposed until last year to the need to make radical changes to survive.

That is not to say it has not undergone culture change in the past 15 years. Customer focus is now generally at the heart of delivery. Across the public sector local government is without question the most pluralist in the way it delivers services. The Prime Minister’s July White Paper on Opening up public services held no surprises for local authorities. Its delay was certainly little to do with any controversy about public v private, which was confined to the NHS. Irrespective of political control, councils are often quite pragmatic in their regard to who delivers – recently the Conservative leader of a major unitary told me proudly how the council had taken back in-house an outsourced back-office contract because it was failing to deliver. It is difficult to see how any government could ‘modernise’ local government much further.

The question now is whether the current dramatic cut in local government funding will propel the sector into a different level of change and if so what this means in practice. We hear much of transformation, burning platforms and gear shifts and there have indeed been some pretty drastic changes, especially to management teams. But in five years time do we believe local government will look vastly different to what we see today? If so, what models should councils be following now or have they yet to be invented? I am sure the SOLACE summit will be grappling with these questions among others.

The Chancellor is all about growth.  Plan A, we are told, will deliver it, without question.  The Business Secretary, likewise, is all about growth.  His new plans for Local Enterprise Partnerships (LEPs) and their associated acronym-laden toolbags of the Regional Growth Fund (RGF), new Business Improvement Districts (BIDs) and Enterprise Zones (EZs), will provide the means to the Chancellor’s ends.  The economic resurgence will be built upon the laudable foundations of the “march of the makers” – reflecting surely the frequently forgotten manufacturing ambitions of the North of England.  And coupled with a smaller state, and a resurgence of New Public Management-inspired shrinkage, we are now back on the right road.

But how rocky might that road be?  There is one simple answer to the proposition that local government can drive economic growth, and Obama had it in a nutshell.  Yes we can.  And in many parts of theUK, yes we do.  The rocks on the road almost always come from local context, and it is this, and the capacity, legitimacy and energy of local government to understand and adapt to it, that is critical to securing growth in tough times.  London’s local government could not drive economic growth if the growth model required for Pennine Lancashire was imposed on the South East of England, and nor could Pennine Lancashire grow if the reverse was true.

Local government is currently stuck between competing visions and policy tensions that run to the heart of the deliverability of growth over the medium term.  In the blue corner, the coalition is all Plan A.  In the soft fuzzy reddish corner, Her Majesty’s Opposition is all talk of Plan B – which, to be clear, is not against state contraction but for it on a different timescale – and the referee in the centre of the ring is local government.  The ring itself is the economy, stupid.  National tussles over the structures of LEPs, the competition for EZ status and public remonstrating over Plan A vs Plan B are often viewed with bewilderment by the same private sector that willingly partners with us to drive growth at a local level, as Councils are invited by this policy framework to fight governance battles above local growth objectives.

 The think tank community has joined this scrappy tension in policy.  A recent contribution from KPMG described the “brilliant local authority of the future” https://member.lgiu.org.uk/cpsp/Documents/Policy%20and%20practice/The%20Brilliant%20Local%20Authority%20of%20the%20Future.pdf sketching a managerial vision of NPM-style shrinkage coupled with business management techniques for councils (and limited mention of growth).  A recent contribution from the New Local Government Network, http://www.nlgn.org.uk/public/2011/future-councils-life-after-the-spending-cuts/, forecasts 2020 “ could… leave local authorities in the same kind of position as the Californian state government: struggling to provide services in the face of high demands, low income and increased direct democracy.”  A quick glance at the recent growth record ofCalifornia shows the perilous position this might create.

Much of this stuff obsesses local government types, but we neglect at our peril local government’s future role as the honest arbiter in local growth debates.  Localism must reign mighty in this for the future.  In Pennine Lancashire, my own authority has effected £33M of budget cuts, representing nearly a thousand “new” job losses, against a backdrop of a local labour market with close to 32% of our 88,000 working age population already economically inactive, 24% of whom – or some 21,000 people – do not want to seek work, and display structural and familial characteristics typical of one of the most acutely deprived areas of the UK.  We have created strong cohesion against this unimaginably tough backdrop – and had no riots recently despite many of the characteristics of economic and social fracture in our communities.

Will a holiday from, or cessation of the 50p income tax rate really drive growth against this local backdrop?  In a town centre where the Council willingly underwrote over a third of the capital costs of our new shopping centre in order to secure private sector partners and without which the rebuild would never have happened alone?  And what of the benefits reform package hitting growth prospects in areas of still hardening deprivation? 

Where might localism sit in reforms to infrastructure bidding and planning?  When we bid for infrastructure funds we follow the same rules as they do inBasingstoke- and bizarrely have to pass the same economic and cost benefit criteria.  An investment  process which takes account of local conditions would surely be more “localist”.  Likewise proposed changes to the planning system, which risk becoming a very blunt tool, and might better reflect a loose national framework with a dash of localism in terms of local plan and policy-making to reflect local conditions.   

If local government can drive local economic growth, I offer a few provocations given these challenges, namely:

1. Local government may be able to better drive local growth if we are encouraged more to focus on growth strategies appropriate to the locality, than further governance bun-fights
2. Government therefore needs to display a preparedness to entertain more imaginative governance solutions in the event the LEP model does not deliver the Plan A growth ambition as rapidly as the Chancellor envisages
3. Local growth can be hampered in part by the severity of local structural conditions that mitigate against it – a tough private sector environment, a challenging worklessness baseline, and a contracted public service offer means more than just a rethink in areas where demonstrably the public sector has needed to be more assertive in driving growth in the past
4. Booms and busts do not happen fairly or equitably, and the “south-east centric” view of this should be continually challenged.  Areas like Pennine Lancashire struggled with sustainable job growth to match our local ambition during the period the South East of England would recognise as the “boom”.   Many parts of the country do not experience “booms” in the same way and therefore fall that bit harder in the bust.
5. Partnering is more important than ever, and FE/HE and skills provision must go hand in glove  with our business partnerships.  Many of the most productive partnerships will not happen in the vaunted corridors of LEP discussions but in practical brokerage at the local level – which is precisely what, against the odds, has delivered much of Pennine Lancashire’s economic renewal over the past 10 years.

At the outset I described the capacity, legitimacy and energy of local government to address these challenges.  It is these factors that in Pennine Lancashire have orchestrated some of the most productive partnerships in the country, delivering town centre regeneration, job creation and tailored support for chronic worklessness across the sub region, frequently against the odds, and frequently out of synch with national boom and bust cycles.  This capacity, legitimacy and energy of local government must be nurtured, and increasingly Government must recognise it as a productive contributor to local growth.  Without local government at the forefront of this orchestration, the march of the makers risks becoming a slow plod, and might yet stop.

It is very rare that Government reforms are universally welcomed by the local government sector, so when they are I think we know that they are onto something worthwhile. The proposed transfer of local public health leadership and responsibility to local government is one such instance. Whilst there continues to be a debate on the benefits of the Government’s wider approach to health reform, councils of all political persuasions have warmly endorsed the plans, articulated in the recently published Healthy Lives, Healthy People White Paper.

So why have these proposed reforms been so enthusiastically received? I believe it is a reflection of the long and proud tradition local government has of working to improve the health and wellbeing of its local population. Local government’s great municipal heyday was very much built upon the need to improve the health and living conditions of their communities. Councils provided areas with sanitation and clean drinking water, transferred slum dwellers to municipally built housing and created green spaces for sport and recreation.

Despite losing their formal responsibilities for public health in 1974, councils have continued to feel a keen responsibility to promote public health and tackle health inequalities in their local area. As the Government recognises, a key reason for this is the fact that the underlying causes of many of the health issues facing our communities are strongly influenced by the physical, social and economic characteristics of the place in which they live. Councils’ role as the leader and place shaper for their local areas puts them in an ideal position to deliver the Government’s vision for a wellness, rather than illness, service – something successive Governments have struggled to achieve.

Taking my own authority, Hertfordshire County Council, as an example there is an incredible amount of the work being done to improve public health in the county. For example, our schools play a key role in helping to tackle childhood obesity. Through the Healthy Schools programme, children are made aware of the nutritional value and benefit of different foods, with many schools also involving pupils in the growing vegetables to be later used in school meals.

Schools also play a strong role in ensuring that pupils participate in physical exercise not just through Physical Education lessons but also through other curricula or extra curricula activities. As part of the Essentially Dance project, for instance, some schools have held tea dances and invited older members of the community to attend.

Services are also targeted to help improve and maintain the health of our adult population especially those who are more vulnerable. Our Countryside Management Service runs a countywide programme of Health Walks, which not only provide physical health benefits and but also help improve participants’ overall wellbeing.

Our adult social care team has initiated a project with the East of England Ambulance where social care practitioners travel with an emergency care practitioner to attend to older people who have fallen at home. Enabling clinical treatment and social care assessments to take place at the same time, to date this scheme has successfully prevented the unnecessary conveyance to hospital of 87% of patients seen. Having won regional and national health and social care awards, the scheme is being replicated across the East of England.

Moreover, Hertfordshire County Council employs Community Learning Disability Nurses whose role involves raising awareness about the health needs of people with learning disabilities. Work includes supporting individuals to access main stream health services and delivering health promotion initiatives. They have also developed ‘Purple Folders’, which draw together all of an individual’s relevant health information, to help healthcare professionals ensure they receive the appropriate medical attention when they need it.

Similar activities are being undertaken by councils all across the country. In doing so, councils have worked closely and effectively with local health partners, most recently through mechanisms such as local strategic partnerships and local area agreements, to address health outcomes.  However, despite this, the challenges we face remain significant and the health inequalities gap in the country has widened.  Even in what is seen to be a relatively prosperous county like Hertfordshire, these inequalities are marked.  For example, men living in the least deprived areas of Hertfordshire can expect to live more than 5 years longer than those in the most deprived areas of the county. The difference for women is nearly 4 years. Furthermore, levels of smoking, childhood and adult obesity, alcohol misuse and teenage pregnancies in certain parts of county remain too high. It is clear that a different approach to tackling these issues is needed.

The proposed new public health arrangements are an opportunity to do just that. With local Directors of Public Health embedded within the heart of the organisation, councils will be able to more effectively align public health budgets with the work that they are already doing to influence health and wellbeing in their local areas. As such, it should be possible take a more integrated, holistic approach to addressing the public health challenges our communities face.

A more integrated approach will also enable us to make better use of the evidence that both areas currently collect and hold. This will help to strengthen joint strategic needs assessments and develop a greater understanding of how to target services most effectively so that those who are at most need of attention and support receive it as quickly as possible. At the same time, a stronger grip on the evidence available will give us the best possible chance of developing innovative solutions to tackling some of the thorny issues currently hampering our ability to effectively address health inequalities. Almost certainly there are opportunities that we are currently failing to harness and we need to make sure these are identified and exploited.

The new arrangements also provide councils with an opportunity to make healthcare services more responsive to the specific needs of a local area. The transfer of public health staff into local government, along with the creation of Health and Wellbeing Boards, should provide councils with greater influence over local healthcare planning and provision. The greater exposure to the councils’ democratic processes and accountabilities that these new arrangements will bring to these issues will also help to ensure that decisions become more reflective of local community needs, concerns and priorities.

Of course, that is not to say that the new proposed arrangements will be without their challenges. Despite the advantages of what is proposed, there still needs to be a recognition that resource constraints, at a time of budget reductions in local government and of challenging productivity requirements in the NHS, will impact on the capacity to deliver improvements in public health outcomes.

Secondly, the roles and relationships between Public HealthEngland, local councils and local Directors of Public Health still need to be clarified. It is not yet clear, for instance, to what extent spending decisions in relation to the ring-fenced public health budget will be able to be made through normal council decision making processes with elected members ultimately responsible for the decisions taken. In the interests of local democratic accountability, it will be important that elected council members are able to take the lead on these issues in the same way they do with other areas of council responsibility.

Moreover, the transition to the new system is unlikely to be without its issues. The success and failure of this new approach will still largely be determined by how effectively councils work with their local health partners – not least the newly formed GP consortia and the local acute trusts.  Councils are already starting to forge stronger links with their relevant health colleagues in preparation for what is to come. Naturally, there will be cultural and political differences to negotiate but the stronger the understanding that can be developed the smoother this process will be.

No doubt these and other issues will need to be ironed out if the potential benefits of the new arrangements are to be fully realised. However, the reasoning behind the transfer of public health responsibilities are strong and the potential benefits high. The health challenges we face as a nation are significant and the approach we are currently employing to tackle these issues is not working.  As such, I believe that this return to local government’s historic role in health improvement presents us with a key opportunity to develop a more targeted and effective way of addressing these problems. I’m looking forward to the challenge!

Lord Crisp’s call for more hospitals to close is a useful and important contribution to the debate. As the former NHS Chief Executive he knows only too well that there is overcapacity in the hospital sector and that closing some would free up funds for community services.

The Bournemouth,Dorsetand Poole Total Place Pilot (which looked at services for older people and for which I was project director) proved this beyond doubt. The data we collected showed that about a third of older people in hospital need not be there and that their needs could be met far more cheaply at or near their homes. The challenge was a leadership one – to make the positive case for closing hospitals.

An important question for local councils and their partners is whether Health and Wellbeing Boards will have the leadership capacity and bravery to make this case.

Community ownership is heralded as one of the big ideas for the future. Public services owned and delivered by the community can be more responsive, provide greater choice and offer more responsibility to local people.

‘Giving people a stake in society’ has been a common response to the recent disturbances on England’s streets. Community delivered services could play a small but significant part, but how can local authorities help make this happen?

The Government has just announced its £30 million Transforming Local Infrastructure Programme to help frontline civil society organisations to grasp new opportunities to run public services. This dovetails with the Open Public Service White Paper that proposes to transfer services directly to communities and give neighbourhood groups democratic control.

While we should recognise this isn’t a brand new solution, it is one being taken forward with renewed zeal and purpose.

In the same month that the White Paper and the programme were announced, evaluation reports were published by the MLA and the Asset Transfer Unit that point to some inspiring examples of how organisations have made a real success of community ownership.

However, the reports also demonstrate the importance of investment when starting down the road of community ownership, and that there is no guarantee of success. While such a programme can test an authority’s community engagement skills, it is the on-going support and training in areas such as finance and legal, which help ensure the approach is sustainable. Communities are not able, and nor should we expect them, to simply pick up where local government left off.

So the big questions facing each community group is do we have the capacity to take this on? Or conversely, can we afford not too?

In Ealing I worked with just the sort of local charity you would expect to be chomping at the bit to maximise this opportunity. They provide modern office accommodation to a wide range of voluntary and community organisations across West London.  But they offer much more than a few desks, a meeting room and access to a colour printer. The centre brings a wide range of organisations together that would otherwise be hidden away in a passionate volunteer’s front room. The centre enables them to support each other, share knowledge and hold a stake in their local community.

As with much of the third sector, finances are tight. Income is down and grant funding opportunities are more restricted. One way to ensure its future is to grow. By expanding and running other community assets, be that more office accommodation, community centres or even libraries, their own fixed costs can be spread more widely. But what about their own capacity to expand? Is growth really sustainable, and would it negatively impact their existing successes?

In the past, local authorities have done much to support local community and voluntary groups to build the capacity and skills they require to take on the activities a council may have otherwise delivered. They have invested in potential and often reaped the rewards in the passion, agility and responsiveness the third sector can bring. We all have an opportunity to learn from past successes.

The question for local authorities is what help can we now afford to give? Can we afford to invest in capacity when we know not all will succeed or where success is intangible? Unfortunately some may not prove to have the long-term capacity to succeed, and if one of our stated outcomes is to give the public choice, inevitably not every one will be chosen.

The mainstreaming of this approach will need investment, and as the stock market shows us, every investment comes with a risk. Not every community organisation will want to take on this challenge and some will find that despite their best efforts they are just not able.

Local government might invest in some failures before they find the gems. But in the current environment, can we afford not to take the risk?

As I have been reading around the issue of economic renewal I keep coming back to something I read on the (excellent) Greater Cambridgeshire Greater Peterborough Enterprise Partnership website.  Their ambition is to have 160,000 new jobs by 2025 – not surprising given the scale of their ambition for the whole area.

That means that the 18 year olds who will take some of those jobs are 4 years old right now and I keep wondering what work is being done within the education system in order to ensure that those 4 year olds are going to have the skills they will need to apply for and get those jobs?  Does the LEP know what skills they will need?

To some extent yes they do.  The LEP has stated that their vision is for a low carbon knowledge-based economy and these sectors need a high level of educational attainment and a lot more focus on the sciences than we might get usually.  Given that green tech is a relatively new industry, and that the knowledge economy tends to be built of lots of smaller businesses, it’s also reasonable to say that the area needs to be growing its own entrepreneurs as well as attracting them from elsewhere.

I don’t know what levers the LEP has with respect to shaping the local educational experience towards local economic need – and I think there are some longer term questions that would have to be asked if the educational experiences of 4 year olds are being guided by these kinds of long term goals. On one hand, if we don’t intervene in early year’s education then we also know there is a considerably reduced chance that we will produce the kinds of highly skilled workers that this economic vision will need in the future.  On the other hand, those 4 year olds will have ridden out 3 General Elections and the subsequent policy changes by the time they get into the workforce and we need to educate them to be ready for all that will ensue.

So I think I want to ask two questions:

1. Are we sure that politically led organisations can produce the stability of vision that is needed to take today’s 4 years olds into the workplace in 2025?
2. Do we have the right tools at hand to be able to help educate those 4 year olds to be able to fully participate in the economic vision that is being created for their future?

It’s the small things….

The question of education is huge – which is really why I have focused on one small group.  In contrast I just wanted to make one other, completely unrelated, observation.  My local council has given permission for the gas company to do some works which are basically backing up the traffic for miles around (it’s a small village – this is big news).  Can’t be avoided.  However, all the traders that I have chatted to on the High Street have noticed a drop off in trade and they are worried about it. These are small businesses – some of them would have closed for a week over the summer anyway – and though they know the work needs to be done some kind of warning that it was happening would have helped them plan for and deal with the slowdown far more easily and with less loss of trade.  They could have warned customers, planned their summer breaks and generally made the best of it.

It’s this kind of detailed thinking that is needed to help businesses in your area – not just the big stuff.