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Transcript of Ahaconsultancy.co.uk Radical responses to municipal budget cuts of 28% in the UK Andy Holder public...
ahaconsultancy.co.uk
Radical responses to municipal budget cuts
of 28% in the UK
Andy Holder
public sector consultant
A Christmas card response
Dramatic cuts made by the Comprehensive Spending Review 2010
Reducing the public sector generally and local government specifically by 28% between 2011 and 2014
Differential for different authorities ( grant down by 4 -17% in 2011/12) meaning some immediate cuts of staff up to 5,000 in our biggest municipalities e.g. Birmingham
Local Government Association taking cuts of over 30% and early on – e.g. Local Government Improvement and Development part of the group cutting about half its staff
‘Necessity is the mother of invention’
We have to innovate because of: Starvation of resources Pressure for different policies and approaches
What has been the response?
For over a year we knew it was coming (irrespective of the Government in power) and municipalities began preparing by doing two things:
1. Looking at the radical range of options necessary
2. Developing leadership style to handle the complexity and range of change
I want to speak about both
ahaconsultancy.co.uk
A. The radical range of
options necessary
What options for change are available?( green levels 1 to 3 will only give 15-20%, more is needed of blue levels 4, 5)
5 ‘Total’ place working New solutions through putting all partner and community budgets, people and assets into one ‘place based’ pot
4 Alternative service provision / prioritisation
Alternative providers and community/users self managed. Failing these reducing services
3 Organisation wide transformation
Integrating structures and cultures towards the customer - ‘standardise’, commissioning and outsourcing
2 Focused service improvements
Streamlining systems and processes to focused outcomes
1 Quick wins Budgets, staff numbers, stopping non-essentials, keeping posts vacant
Acknowledgement : Adapted from PWC work
Level 1: Quick wins
These are savings which typically the organisation can absorb as part of it yearly business planning:
Annual efficiency pressures of 2 or 3 %pa Leaving vacancies when staff leave Cutting ‘extras’ – travel, food and drink, expenses,
Christmas parties!
Level 2: Focused service improvements
These focus on how specific services are delivered:
Clarifying and simplifying what should be delivered – agree priorities and outcomes
Using business process re-engineering – ‘end-to-end’ process reviews which deal with:
* actual versus possible timescales* duplication - less people involved* faster - right first time responses* one person responsible end to end* agree with staff how it could be
reshaped how it could be* doing it!
Level 3: Organisational wide transformation
This focuses upon ways in which the whole organisation can work as ‘one’ and with a different culture:
Integrating the customer responses – in one place or system and dealing with simple questions by less skilled staff
Integrating commissioning/procurement:*using the skilled central staff to better focus
requirements*reduce those involved ( but protecting the
skills for defining the services needed)* widening and using more competitive
markets
Level 4a: Options for service delivery
Options for service delivery
Mutuals Social
enterprise
Partnership with private
company
Internal delivery
unit
Contract to private
company
Joint delivery vehicles
Social Enterprises – trust or community run organisations
A wide variety of types of community owned and run organisations
Examples;
1. A range of trusts set up to operate ex-municipal leisure and sport facilities – to protect the asset and run services
2. Community groups taking over the running of village shops, post offices and pubs! – which would have closed
Mutuals – Employee ‘owned’ organisations
Co- ownership by the employees who hold the service and assets for future generations – relying on strong employee involvement to get superior performance
Examples
1. Central Surrey Health – since 2005, 770 co-owners have provided community nursing and therapy services in homes and hospitals
2. Government encouraged 12 pilots with mentors from established mutuals (e.g. John Lewis Partnership) in health, adult care, children’s services and education
Joint delivery vehicles – partnership organisations
Shared services across public bodies, with third sector organisations and the private sector
Examples1. Shared ICT, financial, administrative and other
back office services – many examples2. Specialist services e.g. library, educational, social
service and engineering expertise – increasing numbers
3. Jointly owned delivery vehicles to pool public, charity and private monies – something difficult in our system
Level 4: Alternative provision ( or not)
Reduce or stop service
User self managed service
Part or wholly run by others: public or private
Municipal services
Lowering cost of service
Level 5: ‘Total’ place working
This level focuses on the area or ‘place’ and seeks to: pool all the resources ( people, assets/buildings and
money) use resources more efficiently ( avoiding duplication and
multiple agencies with one person) and to more focused service outcomes
engage the community and customer more –idea of the big society and the community doing more for itself
ahaconsultancy.co.uk
B. Leadership styles for the complexity and range of
change
What leader’s need to do
For municipal leaders, both politicians and managers, things couldn’t be more challenging:
it demands you ‘get on the balcony’ to see what is the whole picture and what is happening
it requires you spot and tackle the critical issues ( Heifetz calls the ‘adaptive challenge) and not get diverted by every emerging demand.
it needs you to lead the whole agenda – what is changing ( the ‘change job’) and what must be sustained ( the ‘day job’)
It needs integrated leadership by political and managerial leaders
Thinking through cuts and complexity
simple
complicated
chaotic
complex
+Services:
Commissioning & enabling delivery
Leadership domains in complexity
REFLECT
UNORDERED ORDERED
ACT
COMPLICATED
Multiple causes and effects, therefore many answers
Use experts to develop new ideas
COMPLEX
Cause and effect/ unclear known solutions
CHAOTIC
Clear causes and effects, available known solutions
Use existing knowledge and people e.g BPR
SIMPLECause and effect impossible to determine
Use action – command and control to bring in some order and
then work out what is needed
Source: D.J.Snowden & M.E.Boone; A Leader’s Framework for Decision Making, HBR, Nov 2007
Leading Innovation
Simple OrderBest Practice
Complicated OrderGood PracticeComplex Un-order
Emergent practice
Chaotic Un-orderNovel practice
SenseCategoris
eRespond
SenseSenseAnalysAnalys
eeResponRespon
dd
ProbeProbeSenseSense
RespondRespond
ActSense
Respond
Example of complexity mapping: Inspection Agency
Complex
Self assessment/ regulation
Savings beyond 30%
Inspecting/ savings on child minding networks
Peer reviews
Impact of inspection difficult to determine
Annual judgements on LA children’s services
Complicated
Organisational change up to the planned 30% put forward
Cross cutting v silo working
Lack of clarity about personal futures
Chaotic
Ways forward on LA children’s
services
Simple
‘Early years’ savings
A way through complex problems:Safe-to-fail experiments
Experiment 1 Experiment 2 Experiment 3
4. Assess & adapt
2. Set out outcomes, project plan, success and failure tests
3. Testing period
Fail/recover
Success/amplify
Possible/reshape
Exit
1. Generate ideas - diversity and dissent
Strategic safe-to-fail experiments
Local First
Community Budgets
StrategicPartnering +
Savings Health and Social Care
Emerging ‘One Kingston’ themes
Organisational
Transition
Regular assessment for success/failure and adaptive response
Qualities of an Adaptive Organisation
Elephants in the room are named – there capacity for courageous conversations
Responsibility for the organisation’s future is shared
Independent judgement is expected Leadership capacity is developed Reflection and continuous learning is
institutionalised
Adaptive leadership qualities
Get on the balcony Identify the adaptive challenges Regulate distress Maintain disciplined attention Give the work back to the people Protect the voices of leadership from below Look after themselves