Earned Autonomy
23 July, 2005

Warren Hatter, Head of Research, NLGN
First magazine

Let’s face facts – two, to be precise. First, local authorities will have to earn their autonomy for the foreseeable future. We will make more progress by recognising this than by arguing for a new constitutional settlement to give local government sovereignty as of right.

Second, ministers and advisors have real concerns about the productivity of the public sector, including – though not solely – local government. That is at the root of the Gershon initiative, and it comes from the administration having a strong feeling that massive investment in the public sector since 1997 has not yielded much “bang for our buck”. The traditional method of calculation shows a decline in public sector productivity by 10%, with cost rising rapidly and output rising very slowly.

To make the most of the situation, we have to stop obsessing over efficiency savings – and mentioning ‘Gershon’ in every alternate sentence – and focus more on each authority’s overall productivity. By concentrating solely on efficiency gains, we are lost in a world of short-termism and creative accounting; and we can see the Efficiency Agenda as a threat to local accountability. I would like to suggest a way of turning this on its head, by embracing a Productivity Agenda that could give local government much more autonomy.

To do so, we need to be able to reliably measure the productivity of each authority, or at least of public services collectively in a locality. In fact, Local Area Agreements might provide a useful vehicle. Measurement is not easy. Until recently, public sector productivity was measured on the assumption that output = input. Currently, an increase in productivity in education can mean a teacher teaching more children – something that probably means less effective teaching and worse overall education outcomes. So, for one thing, we need a methodology that focuses on outcomes. I don’t pretend this is easy, but it is surely worth a concerted effort.

The views of citizens must be factored in. Increasing police patrols may not be more ‘productive’ on many current measures. But if it makes people feel safer (their priority), then it should be seen as improving the productivity of local services. The accountants therefore, might need to take a back seat.

The practical reality of ‘earned autonomy’ is the Audit Commission’s commitment to strategic, light-touch inspection. Let’s take it further. Shouldn’t we argue for a situation where the Commission says to the citizens of Hastings: “The Borough Council has a productivity score of 85 – five above our ‘no intervention’ threshold; and the Area Profile shows that the public, private and voluntary sectors in the area understand local priorities and are dealing with them. So we will not impose targets or inspections for the next three years”? Although I am sure this could be communicated in a more user-friendly way!

Shouldn’t we see whether we can find a methodology that will successfully measure local productivity – and argue for the chance to earn the autonomy that local government deserves?