Going Local
Author: Chartered Quality Institute |
Every British citizen relies on his or her local authority to provide services in the most economic, efficient and effective way possible. Given the complexity and diversity of the services they supply, this is always challenging, but with the £6bn of public spending cuts announced in May, it has probably never been more so.
Efficiency cuts have been announced for every government department, but the Department for Communities and Local Government bears much of the brunt. Local government grants have fallen by £1.165bn with the department seeing more than 7% of its annual budget cut. However, along with these cuts came the announcement that local authorities are being given more “flexibility” to find savings as “ring-fencing” around government grants is removed. Being able to make decisions about how the cuts are made is a responsibility that local authorities will welcome, but it will also throw many other problems into the mix – not least by placing them in the firing line with opposition from local taxpayers and public sector interest groups.
Unsurprisingly, reaction to news of the cuts has been polarised. One of the strongest responses came from UNISON’s general secretary, Dave Prentis, who described the cuts as “vandalism”. He said: “The coalition is extracting its pound of flesh for the pleasure of their friends and funders in the city. And the cost of these callous cuts is being paid, as businesses, communities and millions of families see vital services and support taken away.”
Andy Sawford, chief executive of the Local Government Information Unit, had a similar response: “[The cuts leave] local government carrying the can for wasteful spending in Whitehall and footing the bill for political promises on those areas of ‘protected’ spend.”
But not everyone views the cuts so negatively. Andy Sawford admits that “the bright spot is that some ring-fencing will be removed to give local councils more flexibility at a local level”. Dame Margaret Eaton, chair of the Local Government Association, believes this is the way forward. “Locally elected councils are closest to the people they serve. If there are tough decisions to make, they are best taken by the people who know their area best.”
But if these cuts really are providing an opportunity to implement, as Dame Margaret puts it, “a fundamental reform of the way the public sector works”, what action is required? And can asking customers what they want and need, which local authorities have said they will do, help to radically improve local service? Can local government step up to the challenge and employ proven quality management techniques to both learn and improve?
As QW went to press, David Cameron unveiled his plans for “Canadian style” spending cuts and chancellor George Osborne revealed his plan to ask the public how to save money, but will the government listen to answers? Could this be the start of a new era, with peoples’ opinions really taken on board locally and nationally?
Challenges
The realisation that local government need to change the way it works has been growing for years. With an increasing expectation from consumers that they can buy exactly what they want, when it’s wanted, people are starting to expect the same of their public services. This was recognised back in 2006 when then prime minister Tony Blair said: “Today, people want the service to be organised around them, not them around it. They want high quality service, tailored to their specific needs and at a time and place convenient for them.”
Central government is now patently aware of these expectations, but even in the good times they were not easy to meet. Allocating diminished funds to local government is one thing, but ensuring that money is used efficiently is another. The coalition government has axed the comprehensive area assessments carried out by the Audit Commission to assess the efficacy of local government spending, deciding they are an expense with little gain. This has brought uncertainty to the role of the commission in monitoring local government’ performance. A new method is now being developed for central government to ensure that local authorities deliver quality services.
A significant challenge for local government is increased scrutiny as well as responsibility of devolved spending and decision-making about where the axe should fall. Councils including Doncaster, Haringey and Sheffield have been vilified in the media for their failures in these areas. And this risk is intensified when faced with enormous budget cuts combined with the layers of government hierarchy and tough, centrally set, performance targets.
Spending cuts are magnifying existing local government funding problems. Faced with maintaining quality, which as Tony Blair pointed out is a growing expectation, local authorities are going to have to do more with less. Outgoings of public bodies are currently huge, with about £765m a year being spent on printing, stationery and general office expenses and £1.5bn on computers. With almost three million people employed in local government, it will take a major shake up to make the savings needed.
Barry Maginn, researcher at government think tank Localis, believes this is where the problems stem from. “So much money is lost in each level of bureaucracy going downwards before money reaches the final service,” he says. “Councils should control more of the money they collect. Leicestershire City Council recently found that it was only controlling about 5% of the money that comes in. The fundamental idea of building service is an aggregation of what’s needed, mainly due to the centralised nature of government.”
Keeping it local
Endorsing Barry’s words, number one on many people’s list of potential improvement initiatives is localism – the idea that by allowing local authorities to make more decisions, layers of bureaucracy and wasted time and money could be removed. The government’s announcement of a decentralisation and localism bill to “devolve greater powers to councils and neighbourhoods” has, while also inviting criticism, been welcomed by many as a potential way to save billions and enhance democracy.
Barry says: “The basic idea is that a service should be as close to those needing it as possible. Funding should only be brought up to the next level as it needs to be rather than how it happens now. Regarding the government’s ideas of localism and transparency, anything that can make local government more transparent will also help.”
The opportunity for local authorities to share services and best practice was also the focus of research carried out by the Audit Commission in 2009. This found that “public bodies are incurring unnecessary administration costs by duplicating procurement activity and paying a wide range of prices for the same commodities, even within existing collaborative arrangements”. For example, one council was discovered paying 50% more than another for plain paper. The report recommends that public bodies should work together within “a clear framework to coordinate public sector procurement activity”.
Central government is already pushing improvement through its Value for Money agenda – a drive “to ensure that resources available to local government are used in the optimum way to deliver better public services according to local priorities”. To boost efficiency the agenda promotes innovation in service delivery, investment in technology, rationalisation of back office functions and organisational development – all well-known quality practices. More than £3bn of efficiency gains were delivered by local councils at the end of 2006-2007 and more are necessary in order for the UK to reduce its deficit. In addition, the new government has announced that each secretary of state will be asked to appoint a minister with responsibility for driving the agenda.
Along with driving efficiencies, there already exist several country-wide initiatives that have been working to improve shared practices in local government. The Operational Efficiency Programme, a year-long programme instigated by the former government to examine operational spending in the public sector, found scope for £15bn in efficiency savings to be made through practices such as shared procurement.
Born out of this programme is Total Place, a new initiative that demonstrates how a whole area approach to public services can lead to better services at less cost. Its main aim is to identify and avoid overlap in costs by using a counting process that maps money flowing through the place from central and local bodies. It makes links between services to identify where money can be spent more efficiently.
There are currently 13 Total Place pilot schemes taking place across England. Cumbria offers a good example. A major focus in the area has been on health, equality and the unemployed. As a result, a move was made to co-locate Jobcentre Plus staff in GP practices.
Jim Savege, corporate HR director at Cumbria County Council, reports that this “has led to considerable success. Rather than just being able to prescribe medicines, a GP is able to prescribe a job centre referral to be able to get a person into employment because they sit alongside each other.” However, in order to progress the initiative, Jim believes that central government needs a change in mindset. He said: “We want to do more but some great ideas at a local level require policies, practices and funding mechanisms to change at national level.”
The Local Government Association is also pushing for government to fully adopt Total Place. In the LGA’s offer to the new government, part of its plan to save £6.2bn from public expenditure this year is to push a “radical decentralisation for a more effective and affordable state”, which includes building on the successes that Total Place has already facilitated. However, to do this the LGA is calling for more comprehensive support from the new government and exactly what support might be available is yet to be determined.
Cutting out waste
Other initiatives to make local authorities more efficient are cropping up all over the country. Many local area agreements, featuring the idea of pooling or aligning funds, have been established. These three-year formal agreements consist of a local strategic partnership and a sustainable community strategy and there are several success stories. For example, the Isle of White LAA provided funds for the council, police and a local bus company to reduce alcohol-related crime. A free night bus was provided, resulting in improved quality of life for all.
Tackling environmental waste is another way to save money. In 2008 the government introduced an adapting to climate change indicator in the local government performance framework against which all authorities report. In response to this indicator in Camden, the council established that more than 60% of the area’s carbon footprint comes from the non-domestic sector. The Camden Climate Change Alliance was set up to bring together local organisations to achieve greater carbon cuts than they could generate alone. The alliance is working for at least a 10% cut in emissions by 2012.
Other local initiatives are firmly based around quality philosophies and tools. Paul Woodham, MCQI CQP, is southern regional manager at EPS, a social housing repairs and maintenance service which forms part of the MITIE Group. Among other clients, EPS works with Portsmouth City Council and together they have adopted systems thinking, resulting in a saving of £750,000.
Paul explains the process. “The council felt that running with targets and KPIs was driving the wrong behaviour and decided to put the tenants first. The systems thinking approach fitted with this belief and all of the council’s service providers, including EPS, embarked on their own interventions.
“Since our eight-week analysis of business practices we’ve learned more and more every day. It’s fundamentally transformed our business. Now when a tenant reports a dripping tap, instead of saying: ‘We’ll fix it a week on Tuesday’ we can say: ‘When would you like it fixed?’ If they say 10am today, that’s when we fix it. By removing waste from our system and using our best resources we’ve totally reshaped our service.
Quality systems and tools are also endorsed by national government. A March 2010 report from the Department of Communities and Local Government, Putting the Frontline First, suggests that councils use tools such as business process improvement, lean and systems thinking to improve processes. But even if councils don’t know it, the very ideas of sharing services to increase efficiency, mapping services and asking what the customer actually wants are all methods that successful private-sector businesses regularly implement to ensure they provide a quality service.
The future
So how can local authorities meet the spending cuts challenge while still offering a good service? It is clear that there are already a number of initiatives in operation across the UK and some good results have been achieved. However, in the face of cuts that, as David Cameron puts it, will change the UK’s “whole way of life”, local government needs to go much further.
Simon Feary, CQI CEO, has the answer. “Quality is the only place to start when addressing what people need and value. The government’s cuts are necessary, but the UK has to ensure they are made alongside the quality practices that will ensure that the public is getting the service it pays for. Quality professionals must step up to the mark, support local councils in their efforts and meet the challenges that the next few years will provide.”
In the past, the public sector has focused on target setting and it has often been argued that this focus has led to systems based solely on outcomes. Encouragingly, there are signs that we are witnessing the death of the targets-based system. What the government and other public sector organisations are now calling for is quality and systems thinking. For example, in a fundamental review of social work announced on 10 June, Professor Eileen Munro, who will lead the review, suggests that an entirely new social work system is needed.
She says: “The way the system has evolved has been so focused on improving the procedures and the guidance that it’s accidentally undermined the importance of the social work skill.”
So the government is recognising the importance of quality thinking. In addition, the public will be consulted. This follows another fundamental quality principle: considering the customer. It remains to be seen how closely these views will be considered but, once the results are in, it is quality professionals who need to be at the forefront of planning new programmes to transform our public services. Now is the time for quality to seize what could be a golden opportunity for change.