Chris Leslie, Director, NLGN
Public Finance

What skills will tomorrow’s council chief executives require to face the vast policy operational challenges of running a modern local authority? With some two million council staff now representing the largest sector of the UK’s workforce and with ever greater demands being made on local public services across the country, a failure to forecast local authority workforce requirements would be a fundamental abandonment of sound management.

Local government is facing two critical challenges. The first is an ageing workforce, with a third of local government’s staff due to retire in the next ten years. This demographic trend is particularly acute within the senior management teams of many local authorities with some due to lose over half their top team to retirement over the next five to ten years. At the same time, local authorities do not have the young talent to step up to fill their boots; the proportion of those under 25 is 7% compared to 15% in the wider economy. An increasingly competitive market-place for skills, coupled with restrictions on salaries tightened by the ongoing efficiency agenda, means the strain on the talent pool is growing.

The second challenge centres on how local authorities should respond to the rapidly changing environment within which they function. It is more important than ever for councils to think ahead and secure the type of managerial leaders able to face the new demands of partnership working, of community leadership, of delivering services through networks and of rising citizen expectation.

A new NLGN report this month reveals a catalogue of complex organisational problems which must be tackled before the local government family can significantly address these challenges head on.

We argue that the starting point must be to recognise the types of skills and competencies needed. Our research shows that in the new working environment the premium will not be on traditional professional qualifications but instead on more generic management competencies. Management skills for service delivery include deal-making, negotiating and partnership working. But managers also need underlying competencies, such as political acumen, the ability to manage ambiguity and risk, and to lead through influence. There is a new emphasis on networks, on partnerships, on delivering outcomes and on cross-sector participation, which demand joined-up services across the local area.

Traditional departmental approaches and career routes cannot provide the answers to questions posed in this new context. New organisational competences necessitate a fresh emphasis on cross-sector working and a move away from professional service-led working practices to outward-looking broader management competences.

Defining the talent needed is difficult enough. Securing and recruiting that talent is a hurdle that local government is currently failing to surmount. Our research identifies critical obstacles at each stage of the HR process - recruiting, selecting, development and succession planning - and we recommend several radical reforms.

Currently local government is struggling to bring in talent, not only at the senior level, but also at the graduate level. Comparative to its size as a sector, its position in The Times Top 100 Careers List at number 40 reveals the distance from where it must be to ensure that it has the profile to tap into the best young talent. Sadly, our focus group research of final year university students reveals an overwhelmingly negative impression of what working in local government is expected to be like: staid, comfortable, stagnant, dull, white, middle-class, male and slow. This is not just a historical accident and it is not one that can be dodged or blamed on external factors. To a large degree it is a problem of local government’s making, stemming from the failure to market jobs to the right audience in the right way. While much of the working population would look with envy on the local government pension package, the majority of job adverts fail to mention this draw to potential recruits. Even fewer ads mentioned career development opportunities or training.

The false divisions between civil service and other public sector jobs is hampering talent recruitment. A nationwide ‘Governing Britain Fast Track Scheme’ should be set up to bring the best of all the fresh potential to shape public service across the country, not only from local government, but from the civil service, police and health. This would have myriad benefits including raising the profile of local government employment, and ensuring a rounded skills-set and breadth of experience for future managers.

How to select from this enlarged pool is the next test. Local government ignores some of the best talent. There remains a lingering reluctance to bring in talent from outside local government and the public sector. Yet this is precisely the diverse talent that local authorities need. By their advertising mechanisms such as over-reliance on the trade press and specific publications and other restricting criteria they discriminate against those from the private sector. Instead, there should be a presumption that all adverts are open explicitly to non-local government candidates.

Bringing in talent is only part of the challenge. What happens to it thereafter is of equal significance. Our research has found that young managers are unlikely to remain within local government if culture and organisational structures remain unchanged. Those on council graduate schemes spoke of their organisations as ‘staid’, as ‘a painful machine’ and that career progressions felt like a ‘lottery’. Underlying this are serious flaws in driving performance, with excessive departmental ‘siloism’. Too many councils do not have systems to understand who the most talented are; the majority reward and promote simply on the basis that someone has been in post for a certain number of years. These approaches contribute to stagnation and hinder the progression of the best employees.

There must be a new concept of fairness that rewards those who work excellently and who deliver solutions for citizens. This means fewer and broader pay bands; performance-related pay and promotion based on robust appraisals and competency frameworks; and fixed term contracts for managers.

However, a new overarching approach is needed. The unique structure of local government, which sees over 450 organisations competing for the same talent, means that individuals are always likely to seek opportunities in different authorities. If a council invests in good training and development, the beneficiary may leave to work in another council elsewhere. So in this context, how can we ensure that they remain incentivised to invest? We recommend that a transfer fee system should be considered – perhaps facilitated by the Local Government Association - where the new employer should pay a fee to the old employer. This should be calculated on the basis of the costs of investment in training in the individual, with a cap of 5% of salary. Other parts of the public sector could be encouraged to join the scheme too.

The final piece of the jigsaw is ensuring that councils plan for the future: both within their organisations and across their local public area. Different training and practical experience is needed to provide the next generation with political acumen and innovative leadership skills. Together these recommendations offer a means to bring in and develop the leaders of tomorrow. Ensuring that the most talented individuals are snapped up by the local public sector and then given new skills to meet the needs of residents is a fundamental duty all councils must put at the top of their agenda.