New Local Government Network » Articles

A shake up in the shires: the future of two-tier working

editor — Thu, 19 Jan 2012 12:37:18 +0000

Simon Parker, Director, NLGN

Over the past month or so, the government’s plans to reform the business rate have started to come under close scrutiny. Some have pointed out the danger that a council’s needs might grow faster than its business rates base, others have argued that the incentive will be too small to make much difference. What has been less remarked upon is the government’s proposals for two tier areas – which could have a significant impact on the way English shires are governed.

Counties and districts will have to share the proceeds of business rate growth, and the government says that the split should be something like 80/20 in favour of the lower tier. This is not the first time the government has indicated that it sees the lower tier as the key driver of growth. Community infrastructure levy funding and new homes bonus cash are also going primarily to the district level.

The rate changes mean that counties will become top up authorities – big, stable organisations providing strategic services such as social care. Districts will effectively become free councils, able to raise all of their money from council tax and rate retention. Lower tier authorities will also be free to ask Whitehall for permission to partially ‘opt out’ of their county, for instance by pooling some of their rates within a LEP.

There is a strong logic for empowering districts in this way – they are responsible for planning, and the whole point of the business rate change is to incentivise local people and their councillors to accept more development. The incentive has to be as close to communities as possible so local people can see maximum benefit. With an average of one councillor for every 2,500 residents, there is also a democratic argument for a lead district role.

The problem is that while economic growth might happen in towns and cities, it does not occur in isolation from the strategic work of counties. A chunk of CIL payments, for instance, will have to be spent on roads and school infrastructure, and those are both county responsibilities. Will counties have the incentive to spend time and effort on high speed broadband, for instance, if they only see 20% of the business rate benefit?

The danger is that we will see a reprise of an old argument in the shires, where county councils argue that they need a bigger share of the money to fund their infrastructure responsibilities. Districts tend to respond by suggesting that some of the proceeds of local development often get ‘filtered off’ by the county to support other services.

The answer, of course, is that district and county councils will have to develop more collaborative ways of working, but with the districts in the driving seat. If they want to fund new schools and highways, districts may effectively commission their county partners to deliver them. Most districts want growth and recognise that they need county-level services to deliver it.

So new collaborative forms of working will have to emerge – for instance the joint investment funds being developed in Kent and Cambridgeshire, where districts will pool business rate growth with county support to fund shared priorities. These mechanisms might well be crucial to managing strategic infrastructure and business investments – think of Northamptonshire’s support for motor racing at Silverstone.

County-wide LEPs will become increasingly important fora, as counties and districts negotiate how to invest their pooled resources and who gets the returns. Smart analysis will be critical to understand how an investment in one district might have spill over benefits for others.

In the longer term, the decision to prioritise district councils throws interesting light on how the shires might look in future. The business rate reforms represent both a vote of confidence in the future of districts and a threat to their long-run sustainability. This is hardly the act of a government that is planning to sweep the lower tier away in a tide of unitarisation any time soon – in fact, ministers have created a situation in which districts could become far more significant economic and democratic players.

But the flipside is that districts will take on a lot more risk – with most of them effectively independent of central government funding, which means that if the local economy tanks their budgets could take a hammering.

This will accelerate the process of organic reorganisation that is already taking place on the ground as districts share services and management teams. It probably also increases the chance that a handful of districts will become technically insolvent and need some sort of bail-out. The long term result will be a redrawing of the district map as councils merge and federate.

It is generally a mistake to look to coalition ministers for strategic vision – there is no grand plan in Eland House for the future of two tier working. Instead, ministers like to make disruptive changes to the rules of the game and see what happens. Expect at least a bit of a shake-up in the shires.

Article originally appeared in The MJ

District councils must seize the day

editor — Thu, 15 Dec 2011 16:28:01 +0000

District councils face a historic test. As a group they face harsh cuts second only to those being imposed on MDCs. Top down reorganisation is, thankfully, off the agenda until at least 2015. But as budget pressures continue into the next parliament, a future set of Treasury ministers might well start looking enviously at the savings promised by structural changes in countries like Wales and Finland.

This means that now is the time for districts to make their case – they need to articulate the unique benefits they bring in a time of austerity. A new collection of essays from NLGN and the District Councils Network brings together some of the country’s most prominent district leaders and chief executives to understand how this tier of government is changing.

Our writers want to see district councils at the heart of deeply interconnected networks of communities, public services and political representatives. In practice, this means districts have to transcend the confines of scale, cultural and organisational boundaries.

In some cases, this means working at the level of towns and villages to build services around their needs. It certainly means sharing leadership and services with other districts and counties. In some cases, it means working with other local service providers to develop a shared public service culture within the district.

Being a networked district definitely means working closely with communities, business and the VCS to champion their needs and represent their interests with the county and other services such as police and health.

Districts are uniquely placed to do this – they represent real places, communities and economies. With an average of one politician for every seven staff and every 2,500 residents, they are able to provide a level of democratic leadership and engagement that few other parts of local government can manage.

It is striking that some high profile issues did not emerge as powerful drivers of change for our contributors. Sharing services was an important theme, but was not seen as transformative. The resulting organisations will still be district councils. There are few thoughts in the collection about future shire governance frameworks, but this probably reflects a sense that new ways of working will emerge naturally as districts transform themselves and their relationships with counties, parishes and communities.

The conclusion of our collection is simple. We recognise the undoubted concerns about the capacity of districts to function effectively. Where the sense of place identity is weak, some districts are open to the charge of being an administrative fiction.

But it is also clear that there is now an opportunity for this group of councils to develop its distinctive role and emerge leaner and stronger. The danger is not that districts are inherently unsustainable, but that they fail to recognise their scope for influence and leadership. This tier of government must own and lead the inevitable process of change, or risk becoming a victim of it.

Simon Parker, Director, NLGN &
Daniel Goodwin, Chief Executive, St Albans City & District Council

NLGN’s new collection Delivering Distinctiveness, is launched on 13th December. Edited by St Albans chief executive Daniel Goodwin and supported by DCN, it includes contributions from Sandra Whiles (CX Blaby), Manjeet Gill (CX West Lindsey), Cllr Robert Gordon (Leader, Hertfordshire) and Cllr Neil Clarke (chair, DCN).

A radical transformation? Not without political leadership

editor — Mon, 21 Nov 2011 15:15:57 +0000

Reading the recent coverage of library closures, it’s tempting to think that the only thing wrong with these Victorian institutions is that philistine councils can no longer afford them. Nothing could be further from the truth. In fact, library visits have been falling for years – numbers dropped by around 7.5m in the last financial year alone.

Across the public sector, transformation is being driven not only by changes in funding but by changes in demand.

One key challenge for councils is to imagine what a new service might look like. The New Local Government Network tried to respond to that challenge earlier in the year, with a report that envisioned radical change for libraries, transport and environmental services.

But the more fundamental challenge is about leading the process of change. At the moment, the public sees the debate over libraries as being entirely about what stays open and what closes. The real debate is about how to create a library system that meets the needs of citizens in the 21st century. The solutions we are designing for waste, including the introduction of “producer pays” technology, requires political leadership to explain to communities this new approach is better for all.

The problem is that too often we separate politicians and public services, and this will only get worse as more councils manage their services by commissioning from arms’ length organisations.

Look at all the literature on public service innovation and you could be forgiven for thinking that all this takes is some bright designers engaging with communities – ask the people what they want, they’ll tell you and you can redesign the service. But this ignores the fact that there are serious clashes of values and principle here. No amount of smart redesign will persuade a reluctant citizen to welcome payment-by-weight systems for refuse collection.

This is a real challenge for many local politicians; some have grown accustomed to seeing their job as being service improvement and distributing a growing budget. That is why we need to do a lot more thinking around how to help politicians have transformational conversations, discussions with the public that can start to change hearts and minds.

Some politicians are already in this business. Look at Rod Bluh, the leader of Swindon, whose explicit goal is to redesign the council to reduce dependency in the city’s poorer areas. Nick Forbes of Newcastle is busy trying to refocus his organisation on creating more “decent neighbourhoods”. We need many more like these.

Local politics becomes more important and more fashionable at times of crisis; these are moments when political visions can make the most difference. The radical changes required of local government do require brilliant managers and creative policy, but without powerful political vision, the kind of reforms we recommend will go nowhere at all.

Simon Parker, Director, NLGN

Article based on the recent NLGN report Transforming Universal Services, Supported by May Gurney

Transport services beyond 2015

editor — Tue, 15 Nov 2011 10:34:11 +0000

When the Transport Minister Phillip Hammond MP described train travel as “a rich man’s toy”, he alluded to the fundamental problem facing transport services today. The costs of different transport choices do not currently reflect the harmful side-effects they produce. In short, there is significant market failure and our current interventions do not produce a combination of incentives and disincentives that can correct this. The simple truth is that a radical re-think across all of the state’s interventions in transport policy is needed to reverse worrying trends and deliver a more sustainable set of transport decisions.

If current trends continue, in 2015 owning a car is likely to be, in real terms, cheaper than it is today. By contrast, travelling by public transport, particularly by train, will be more expensive. With capital funding for roads and public transport reducing over the next four years, it is unlikely there will be compensatory infrastructure improvements to mitigate for the adverse consequences of this. The scenario we are likely to witness, if nothing is done to change our approach, will be increased levels of congestion, higher carbon emissions and a deteriorating road network. The implications for economic growth, for climate change targets, as well as general quality of life, will be profound.

We believe the solution lies in making changes across the full spectrum of transport services that will create a more level playing field of travel choices. This means addressing market failure in a more sophisticated way, so that the price of travel better reflects the external costs it produces. It also means making public and other sustainable transport alternatives a more viable option. Studies by the Department for Transport have shown that accessing key services takes, on average, twice as long by public transport compared with car travel. It is unrealistic to expect a major modal shift away from motoring without making the alternatives a realistic option for the majority of the population.

In our new report Transforming Universal Services, produced in collaboration with May Gurney, we propose a range of changes that could be made which collectively would amount to a total transformation of transport services at a local level. We do not argue that all local authorities should adopt all the suggestions we make. Our aim is to start an ambitious debate about what it would be possible to do, and how far we could realistically go in transforming transport services.

Reconfiguring the costs of transport to better reflect their full economic and environmental impact cannot be done at the local level alone. We therefore suggest the introduction of road pricing, on the most heavily used of roads and with an emissions-linked sliding scale, to replace Vehicle Excise Duty. By altering the marginal costs of driving there would be incentives to find alternatives, particularly for short journeys. At a local level, councils can introduce congestion charging and Working Parking Levies to disincentivise car usage, and bring in new revenue streams to help improve the quality and reach of public transport, as well as to maintain the road networks. Rebalancing the costs of different transport options can only be part of the solution, however.

Councils will also need to redefine their relationships with businesses. There is a need across a number of areas, notably environment and waste, to establish with business the integral role they play in the vibrancy of the economy and environment of ‘place’. Through a range of incentives and ‘nudges’ councils can help businesses adopt and encourage more sustainable approaches. Exempting businesses from congestion charges at specific, non-peak hours could help shift a significant volume of business transport and help free-up the network during rush hours. Similarly, should legislation allow it, councils could offer small business rate discounts to firms which replace car parking spaces with bike sheds, or which have demonstrated they have encouraged their staff to use more sustainable transport options. The key for councils is to create an environment where businesses will feel responsible for their role in the demand for transport, and by extension will feel rewarded for helping to promote more sustainable transport patterns.

Vastly improved public transport that reaches further and offers quicker journeys is essential for a genuine modal shift. Priority lanes for buses would help improve journey times. Full integration of public transport types and payment methods would make usage more convenient. Emerging technologies may also help. Though a few years away from being a reality in the UK, concepts such as the forthcoming Beijing ‘straddle bus’ (which can travel along roads above cars), or hybrid electric bikes which can also be taken on buses, would greatly increase both the convenience and journey times of sustainable transport choices.

Individuals must too play their part. Councils will need to take it upon themselves to nudge citizens in the direction of sustainable transport. Facilitating the creation of car pooling and lift sharing schemes would reduce the number of cars on the road. Provision of bike hire schemes, the introduction of no car days in city centres and designating the least used roads as cycle highways would all tackle some of the difficulties people currently face when considering cycling. And providing more information would help citizens make more efficient decisions about how to travel in a sustainable way. From websites that integrate lift sharing into public transport journey planning, to new smart phone apps that provide real time information about the location of buses and the numbers of passengers using different modes of public transport, there are a range of ways to improve the information available to citizens.

The introduction of measures such as these would mean that in 2015 the choice of how to make the daily journey to work, to the shops or for leisure will no longer be so heavily weighted towards use of the car. Individuals would have a much wider selection of choices, and much more information with which to make these with. Each policy change we suggest has its own discreet benefit but importantly, cumulatively, would lead to a transport system that is more sustainable and more efficient. Not all suggestions are suitable for all authorities, but we hope this helps to start an important debate about how transport services can be radically transformed.

Tom Symons, a Senior Researcher at the New Local Government Network
&
Alan Dinsdale, Strategic Director, May Gurney Highways

Service pressures will force ‘radical’ rethink

editor — Thu, 13 Oct 2011 10:02:17 +0000

Financial pressures will lead to radical reforms in the organisation and delivery of universal public services over the next decade, according to the New Local Government Network.

Transforming universal services, a new report by the local government think-tank published today, looks at likely changes to libraries, environmental and transport services, and suggests they will continue to be dominated by budget pressures, with changes in consumption patterns driven by new technology.
congestion zone picTransport’must consider’ road charging. (Pic: Mick Baker/Rooster)

Authors, Daria Kuznetsova and Tom Symons, draw a distinction between personalised services, such as social care, and more open access services, including libraries, but say there are real opportunities for all services to be more localised and responsive.

‘We need a radical discussion about how public services need to change over the coming decade, said Ms Kuznetsova.‘Our proposals envisage a world in which citizens and businesses get far more choice about how they use and access key services. Where citizens and businesses can help local authorities make savings, they should get a share back through council tax or business rate discounts.’

On libraries, the report envisages a future service that will continue to be changed by technology and the popularity of eBooks – with only 10% of books on shelves and a majority moved to shared warehouses or downloadable online.

Libraries would continue but would act more as community centres, with open Internet access and touch-screen readers, the authors report.

Local ‘pay as you throw’ schemes could offer households lower council tax bills if they minimise waste, while city-regions such as Manchester or Birmingham could make businesses buy landfill space with tradable waste credits. Councils could also introduce a ‘green micro-bond’, which would allow local businesses to invest in electricity-from-waste plants and enjoy a share in savings.

On highways and transport, NLGN director, Simon Parker, says in his introduction to the report: ‘We found ourselves being forced to reach for national policy levers to drive change. It is hard to imagine how we can create a manageable transport system without some recourse to road-user charging.’

Dermott Calpin, The MJ

A glance into the future: Environmental Services 2015

editor — Thu, 29 Sep 2011 10:17:54 +0000

As Eric Pickles never tires of reminding us, environmental services are one of the most high profile areas of local government spending. The government’s overblown rhetoric about the town hall ‘Talibin’ conceals a basic truth – we all use waste services and the quality of those services is critical for public perceptions of councils.

But despite the importance of these services, waste has been pretty on the list of innovation priorities over the past decade. Services got a lot better, but there have been few big ideas to compare with something like the personal budget revolution in social care. Now the pressure is building up for change.

Environmental services face a cut of about 3% this year and there is almost certainly worse to come in 2012/13. But the real driver for innovation is demand – a rising population, more of them living alone – combined with skyrocketing landfill taxes. As part of our Ripping Up the Rule Book project, researchers at NLGN have been digging into the data and talking to experts to understand how we might be able to do waste radically differently.

Our ideas are not recommendations or prescriptions. We recognise the political, legal and practical barriers to some of these ideas, although we believe they can be overcome. The point of our work is to stimulate an ambitious and creative debate about how to fundamentally reshape services for a world of rising demand and shrinking budgets.

Our key idea for the waste service of 2015 is that we should expect service users to take more responsibility for the costs of disposal and recycling, but in return they should be given more choice and support.

We suggest that councils should create new financial incentives to reduce household waste. This means moving to a ‘pay as you throw’ system where wheelie bins have embedded weighing systems which can easily be scanned by refuse collectors. The weight, volume and type of waste would be automatically registered and processed.

Individuals would receive rewards for reducing waste – perhaps in the shape of council tax discounts – and would have to pay fines for excessive waste output. Households might receive an annual waste statement, displaying annual calculations on the number of football pitches a household’s waste has filled, with comparisons across other households of similar size and composition.

City regions could introduce a localized waste cap and trade scheme that would incentivise businesses to reduce waste or bear the costs. In 2009, 47.9 million tonnes of waste was generated by businesses with a quarter sent to landfill. Under the cap and trade scheme, businesses will have a limit on the amount of waste they can produce based on industry, number of employees and annual turnover which would be transformed into waste credits. Businesses that under spend their waste credits could sell them to companies that use more waste than allocated.

These schemes would need to be dynamic and flexible to avoid some of the pitfalls associated with, for instance, the EU carbon trading scheme. If there are leftover waste credits in the system, the council should commit to buy them back, and if businesses to need to produce more waste than expected, they should be able to buy extra credits. Councils should commit to ensuring that any waste credit income is ringfenced for environmental services and that the system as a whole is revenue neutral – any profit generated could be returned to businesses through a rate discount.

The market for recyclables would expand in local areas, and a smaller volume of plastics would be sent abroad for processing. The benefits of expanding mixed plastics recycling in terms of resource efficiency, diversion from landfill and emission savings, are very high. Most products purchased by households will contain a high proportion of recycled material by 2015. By increasing the demand for recycled materials, local government will boost investments into the sorting technology needed to improve mixed recycling efficiency. Similarly, local areas would approach a closed loop system around bulky waste ensuring that less is sent to landfill and more is reused by neighbours or resold at discounted rates.

Green bonds, with a mechanism similar to that of Municipal bonds in the states, would be used to finance investments into Energy from Waste (EfW) Projects. Municipal bonds are securities issued by local government for the purpose of financing infrastructure needs. With increasing landfill taxes and energy prices, there is a strong drive for local governments to promote the development of Energy from Waste facilities. Expansion of such projects would allow Local Authorities to not only reduce waste send to landfill but sustainably power their communities with the energy produced.

To bring environment services closer to individuals and communities, powers over environmental services will be devolved to neighbourhoods. A number of councils are already planning to integrate waste, street scene and other services at neighbourhood level, giving ward councillors and citizens the power to influence service provision. In some cases, budgets will be devolved to neighbourhoods who would be able to choose a customized package of services. By reducing waste expenditure, neighbourhoods would free up money which they could choose to reinvest in additional service benefits from the council, such as subsidised access to leisure facilities or reduced council tax rates.

Through community pressure and greater transparency of individual actions, citizens will be encouraged to take greater responsibility for improving livability. The use of apps would further empower communities to improve their neighbourhoods, for example bins and skips could be marked and included on a google maps app. Furthermore, extensive use of iPhone apps such as My Council Services, will allow individuals to instantaneously report incidents to the council and more efficiently keep their streets clean.

As service users are brought closer to their services, they have a greater stake in service improvement and the potential for innovation increases. Our vision of 2015 environmental services would see cleaner streets, more sustainable waste disposal and more responsible service users. Through a full scale involvement from individuals and local businesses, local authorities will be able to step back and make way for true local sustainability.

Simon Parker, NLGN Director
The MJ, September 2011

Bring more technology to libraries

editor — Fri, 23 Sep 2011 09:55:07 +0000

Faced with a spate of closures which often attract strong public opposition, the future of libraries has become a focus of attention and heated debate for many local authorities.

There is now a real opportunity to go back to the drawing board and reassess how library service should be organised and what they should do.

Together with May Gurney, we undertook a research project to gauge just what the future may have in store for libraries. Imagine it is 2015. On the way to work, at your local bus, metro or train station there are several book vending machines. Books can be selected and checked out with an easy swipe of your travelcard card. Upon exiting the station at the end of the journey the book can be returned to avoid an automatic charge being added to your card after 24 hours. Library A real opportunity exists to go back to the drawing board and reassess how library service should be.

Book-vending machines have already been around for some time. Parisian readers have been able to purchase books on the go since 2005 and the ‘Book-o-Mats’ vending machine was on the market for American commuters way back in the 1940s. In California vending machines in transport hubs have proved highly popular with travellers, some 25-30 % out of 400 books are out on loan at any one time.

The physical space within libraries has already undergone significant changes. Walking into the library, there are a myriad of desks and seating spaces with fixed Kindles surrounded by virtual bookshelves. Walking through the library, touchscreen technology allows the user to browse through the collection available electronically and in print.

Most of the physical books have been relocated to warehouses shared between different local authorities. Print copies are available to order from local centres and can be delivered within 24 hours, while, local libraries are able to stock the top 10% most popular checked out books in print along with the latest in new releases by making more efficient use of visitor data

Some of the very first eBook initiatives in public libraries have proved a tremendous success. For example, Derbyshire county library attracted 200 new registered users to its website within 48 hours of the service being introduced.

To everyone’s surprise the initial Derbyshire experience with eBooks did not just appeal to young people but attracted expressions of interest from users of all ages. Initially the variety of titles on offer was very limited, because of publishers’ hesitations over the provision of eBooks in libraries. However, by 2015, we expect that publishers will have agreed on a business model which allows libraries to buy and redistribute eBooks to a limited number of users for a restricted period of time.

Self-service machines will transform the librarians’ roles, away from stamping and issuing books to helping users access the wide range of information services available through libraries. At the same time the expected reduction in the number of print books on library shelves will allow them to refocus their energies to promote and support reading and literacy for adults and children.

Browsing virtual bookshelves by touchscreen will helps users make their decision on which eBook they wish to read . Book reviews will be freely available online and user ratings will be automatically updated. Once a choice is made, readers can expect to enjoy a coffee from the library café while they relax on a comfortable sofa and read, with either their own Kindle or an eReader provided by the library.

All these services will also be accessed remotely through library websites which more than tripled between 2004 – 2009 demonstrating a strong preference among users’ for online services. An MLA (Museums and Libraries and Archives) poll has shown that non-users often state a lack of time and the need for easier access to books as main reasons for not using local libraries.

As the space available for library users is an important element in people’s attachment to the service, many communities are involved in redesigning their local libraries. Some have gone even further and community groups or organisations own their own libraries. Each model is tailored to the individual community and responds to local needs as appropriate.

Some libraries already have sections for children’s services which have been designed and decorated with the help of local children, with spaces for young people to come after school and complete their homework or just find help and advice from assistants.

Younger children have a range of interactive games and exercises to encourage kinaesthetic, visual and auditory learning. Children are also taught how to use computers, eReaders and navigate the touchscreen technology. The expansion of digital media alongside the more traditional definitions of literacy, has enabled libraries to promote readership though more innovative ways.

Along local high streets, there are a number of mobile reading rooms set up in previously vacant spaces. Mobile reading rooms do not simply provide books, but are also involved in the provision of other library services such as local reference information, music, film and IT resources.

An earlier project in the USA introduced a portable, purpose-built structure that combines book storage and a reading room. The building can be reconfigured for other uses (such as showing films) and parts of the overall structure also convert into seating and tables. The flexibility of these mobile reading rooms means they make it easy – and highly affordable – to replicate many of the key functions of a library .

Users will be able sign up to have book box deliveries. Similar to vegetable box schemes, the items are not ordered in advance but are instead randomly selected based on a family’s reading preferences and previous borrowing history. A stamped package is also provided to send the books back to the local library warehouse to avoid late penalty charges.

Our vision of the future suggests that by 2015 users will have much greater opportunity to engage with library services than they can today. Libraries will continue to be provided through traditional community hubs, but access should increase greatly with the introduction of new and more personally tailored services and an expansion of online services.

Though the library service of 2015 may look quite different, its role and importance is unlikely to change dramatically. Libraries will as remain crucial community spaces, a local resource for information and a vital catalyst for literacy.

Daria Kuznetsova

General Public Finance? Developing a market for community investment in local infrastructure

editor — Wed, 14 Sep 2011 13:51:18 +0000

With councils making plans to return to the bond markets as a source of finance, what are the prospects for community investment in local infrastructure projects? This project explores the potential for ‘general public’ or ‘retail’ bonds to be used by local authorities as a means of financing schools, housing, roads and other vital public works. The project will analyse the barriers to the creation of a retail market for local government debt, and articulate a series of policy recommendations to facilitate this.

Capital Finance: localism vs deficit reduction

editor — Mon, 12 Sep 2011 10:36:12 +0000

Promises of TIF, the introduction of Enterprise Zones and the de-ringfencing of capital grants are positive signs that the Government’s localism agenda is going to carry over into capital finance policy. However, when it comes to PFI, we are also seeing that old habits die hard, and this is not always good news for councils and the cause of localism.

The now undeniably urgent need for economic growth has seen the government throwing the proverbial kitchen sink at strategies to help the growth of the private sector. For councils, this has meant a selection of new tools to help their local economies. Tax Increment Financing, on the wish-list for councils for a number of years, has been joined by Enterprise Zones, New Homes Bonus, Community Infrastructure Levy and the Regional Growth Fund as new sources of badly needed capital investment. These measures represent a new onus on councils to fulfil a primary role in the development of their local economies. They also give councils new powers, and the ability to create infrastructure based on their own knowledge of their area’s investment needs.

So far, so localist. But new announcements about capital finance haven’t all followed this devolutionary trend. At the other end of the deficit reduction spectrum is the need to keep the national balance sheet in check, and this has seen the quiet continuation of some of government’s centralised decisions about the delivery of new capital investment programmes.

Despite two damning parliamentary reports, from the Treasury Select Committee in and the Public Accounts Committee, the Government’s new £2bn Priority School Building Programme will be privately financed. The Programme will deliver 100-300 new primary schools, needed to cope with the expansion in number of children in need of state school education. While there are some concessions to the criticisms levelled at the Building Schools for the Future programme, local authorities will still have little to no say on the design of the schools, nor the procurement process and source of finance used to build them. That will all be decided by Ministers and Civil Servants in SW1.

So while local authorities may support or disagree with the findings of the two parliamentary reports into PFI, it appears they will still have very little say in whether they use it or not: a timely reminder that localism is not an agenda shared equally across Whitehall, and that deficit reduction is a priority above all others.

Tom Symons, Senior Researcher NLGN
PorgLoc, September 2011

Councils after the cuts

editor — Thu, 08 Sep 2011 11:45:37 +0000

Local government is facing a period of significant change driven by budget cuts and rising demand for public services. By 2020, councils are likely to look very different than they do today.

The first wave of change is already happening in local government, and in some areas it will probably continue into 2012. In this stage, local government as a whole will focus on traditional cost cutting as councils deal with two years of very steep cuts. This means redundancies, reductions in service levels and conventional outsourcing where it can deliver rapid savings.

The second phase of change probably kicks in at some point in 2012. This phase will be defined by most local authorities moving some way down the road towards a slimmer strategic core, with more services delivered at arm’s length through a wide variety of delivery bodies.

But within this shift there will be some important variations. Some councils will try to maintain their current organisational form, reviewing and modernising their in-house provision, often with a renewed focus on democratic structures and citizen voice. A second group – probably the largest – will be pragmatists. These councils do not have a grand vision, but will review services piece by and piece and see what emerges.

A third group, composed primarily of large unitaries and counties, will move to a much slimmer core and will deliver almost all their services through some form of outsourcing, whether a trading body, a regulated market or a traditional outsource. A final group of Labour councils will aspire to become co-operative councils, although it remains to be seen what this means in practice outside of the London Borough of Lambeth.

But the commissioning council model is probably not the end-state of reform. Instead, it seems likely that for many councils it will be an important milestone on a longer journey. Beyond 2015 most councils will have established a new mode of operating and be seeking new directions for development. Some councils will find that their role has not fundamentally changed a great deal – areas like Barnsley and Blackpool will still have a pressing need to try to improve the quality of life for parts of the country that have been left behind economically.

Others will be testing the traditional spatial, financial and service delivery boundaries of local government. The new frontier for innovation will be less about redesigning individual services and more about questioning the fundamentals of what a local authority is. As many local government services – particularly in areas like adult social care – become personalised and managed through regulated markets, councils will also start seeking new roles to secure well-being for their areas. We expect to see new models of federated, residual, lifestyle and commercial councils emerging.

Considering this, we present three distinct scenarios for the kind of world local government may find itself in.

1. California: this is a world in which coalition policy more or less works – the public has become more assertive and active and local government has faded into the background of people’s lives. Weakened councils may find themselves struggling to balance the books, fund infrastructure and protect the vulnerable in a world where everything is subject to a referendum.

2. United Provinces: councils respond to lacklustre growth and a lack of significant devolution from Whitehall by banding together to promote growth and efficiency. Areas like the Tees Valley, Greater Manchester and Bristol move to federal governance arrangements, perhaps including metro-mayors.

3. Recessions: a failure to return to growth means that local and central government are left struggling to find ways to secure economic and social progress.

What unites these scenarios is a sense of mild pessimism about the future for local government, rooted in concerns about whether the UK can find a sustainable new economic model, and whether that model will do anything to address inequality. That said, councils are not just victims of socioeconomic trends, and we do envisage positive responses that local actors can make in tough times.

Simon Parker, NLGN Director
Public Finance, September 2011