Future Governance of Public Services

Paul RaynesLGAX, 20 May 2010

The lights are going out all over Europe

We shall not see them lit again in our (working) lifetime

Tax won’t make cuts go away

It is alleged that…

But not every front line is equal

The challenge

• Under a new government, public services will have to:

– cost less– be more effective– promote choice and diversity - and the Big Society?– cost less.

We can always cut our own budgets and frontline services if we have no other option; but we need an offer on the other points too even if we did that.

As we’ve said for some time, real savings are only available if we radically reform the way public services are run.

Too many funding streams, too much remote control, too much cost, too few results

• Number of disengaged young people 16-24 years old no lower now than when Social Exclusion Unit invented the term, despite £10 billion a year of spending via 49 silos;

• Two-thirds of the 2.4 million Job Seekers Allowance claims each year are repeat claims despite the “crowd” of JCP, LSC, councils and New Deal around claimants;

• Regional economic development – many quangoes and partnerships, but regions are falling further behind London

• Split incentives within the crowd of public bodies means long-term cost drivers are ignored – eg public health.

• And despite the plethora of public bodies, the citizen has very little choice about the service he gets at the front line. Provision is confusing, but not diverse

• And the model is based on failure demand; it doesn’t enlist or incentivise users’ initiative or self-organisation.

Centrally-accountable departmentalism wastes vast sums of money duplicating effort, inventing targets that don’t get met, obscuring accountability, and entrenching dependency among citizens and professionals alike.

Local leadership offers better, cheaper, outcomes with the citizen at the heart

Localising budgets and governance allows an integrated approach to multi-faceted problems, stripping out £4.5 billion of administrative costs and delivering better value for programme spending:

• The Total Place Reports show how spending can be pooled to strip out duplication and inefficiency;

• Local Area Agreements show evidence of cooperation leading to better achievement across a number of key shared priorities;

• “Hidden Talents” shows how 49 funding streams have failed to reduce numbers of disengaged young people.

Localism and better politics

Localisation is not about bigging up local government budgets but:

• onward devolution to districts, town and parish councils and through participatory budgets to neighbourhoods and citizens;

• transparency through initiatives such as Windsor and Maidenhead’s;• responding to local pressure and elections (council tax competition

in London shows the power of local democracy)• using elected local leadership to commission better from a range of

providers• holding other providers to account• (and if we have free schools, the Big Society and all that) working

with the grain of user choice and helping to make sure that users choosing services have a healthy supply-side, good information, and redress;.

A different conversation with government

• In the past, we have asked for more – powers, funding – on behalf of councils;

• And the quid pro quo was a promise of better delivery of policy outcomes;

• Now, we are offering to help deal with less;• The quid pro quo is that councils will be

accountable for hard decisions – AND that the policy outcomes will be better than in a world of silo cuts;

• People in the sector we’ve spoken to so far tend to agree that this is a compelling headline deal – do we?

Isn’t this just Total Place?

• The Budget broadly endorsed these insights though its proposals for following-up Total Place;

• We should lock the gains in• But they are gradualist – “interim reports” in two

years’ time• And about striking deals between bureaucrats, not

about democratic accountability• Neither the public finances, nor public accountability,

can wait• We should take advantage of the election to try and

force the pace

Three questions

• We need to get the debate away from how local partners work together – because we’ve proved know they can - and onto how central government can better enable local joining-up – because it hasn’t proved it can do that yet;

• That means we need to get specific about geography; scope; and (central-to-local)

governance.

Three questions - geography

• Local partners will come together in the way that works for them best;

• But for the services we are talking about, there is some natural service geography;

• And we need to be alive to debates about economies/diseconomies of scale and capacity;

• The evidence points to counties and cities and partnership between councils; exactly what that means is up to councils (in some places and for some issues, regional joint working is what councils will want; for others, it’ll be boroughs)

• This is already a powerful direction of travel with MAAs, city-region pilots, economic prosperity boards and so on.

Three questions: scope

• We can develop a method for deciding what decisions should be devolved and joined up under new local governance;

• It should be based on scale economies; financial risk; reputational risk; improved accountability; and the potential for better outcomes;

• Our initial view is that such a method would point to devolving and subjecting to new governance economic budgets, much health commissioning, police, energy efficiency;

• How does that feel? Is there obviously more (eg offender management/justice?)

Three questions: governance

• Councils have umpteen ways to pool governance and general competence would create another;

• So that’s not the area for debate; what matters is accountability to Parliament for Voted money and how government knows what outcomes are happening; this is what local partnerships trip over all the time;

• Could we have direct voting of money from Parliament to locality budgets without any need for Whitehall or quango middlemen?

How accountability might work

Now MoneyAccount-ability

qUANGO

How accountability might work

Future MoneyAccount-ability

Next steps

• We face big potential cuts;• We can let the coming moment happen, defend our

budgets in the conventional way, and take whatever the consequences are;

• Or we can pitch for a reinvigorated local government role in the reshaped public service landscape that goes beyond what’s been on the table so far

• Officers have done a lot of staff work and can have a detailed proposition ready for members to put to Ministers very quickly

• A complete deal would require legislation, and some areas are likely to be ready to move faster than others (a “regatta approach”, in EU-speak)

• The time for this is now.