‘Hard truths’ worth £63 billion in cuts to the public sector mean local service innovation in the next few years will be critical to avoiding crisis. Andrew Laird and Oliver Cappleman make the case for delegating decisions to the front line.
The political New Year opened with a speech from George Osborne. It was no winter warmer. The Chancellor referred to 2014 as “the year of hard truths” and set out plans for further cuts across the public sector, totalling £63 billion over the next four years.
Over the past three years councils have strained to minimise the impact of budget cuts on priority front-line services that most directly affect residents. They have instead reduced overall staff numbers, primarily in the back office, found ways to deliver some services more efficiently and entered into new service delivery arrangements often with private sector partners (Audit Commission, Tough Times 2013: Councils’ responses to financial challenges from 2011/12 to 2013/14, November 2013 )
Difficult decisions have also been taken regarding non-essential front line services which have frequently been cut altogether to allow precious resources to be focused on priority services.
The size of the next round of cuts means that the budgets for priority services are now under serious threat (if they weren’t already!). This is particularly relevant to social care services which account for more than 50% of local government spending. Creating a pincer movement is the constant pressure from service users for improvements in service quality.
So what more can councils do to deal with these seemingly relentless pressures?
It’s fairly safe to say that the traditional approaches to making savings in local government have been mostly exhausted – more radical action is required if front line staff are to be given a fighting chance to preserve service quality.
Central to any solution must be pushing decision making power and control over resources towards the front-line. Why? Because devolving responsibility empowers staff which in turn leads to changes in engagement, motivation, behaviours and mind-sets. Given the right support, the people who deliver front line services are best placed to come up with innovative ways of working that will be more efficient and more focused on service quality.
This devolution also encourages an environment where staff are motivated to make small, regular, incremental changes to services, rather than the traditional big bang disruptive approach. These small changes, when added together, can alone mean that the services could be delivered for less money. Over the longer term this avoids the stagnant build-up of inefficiency and keeps services relevant and targeted at current need.
Creating the right environment to support innovation and problem solving is key. This might mean simply changing the way an internal service operates by pushing more responsibility down to front-line staff and allowing more freely traded activity. But it can also mean more radical approaches like setting up an arms-length (but still public sector owned) trading company or allowing front-line staff to set up an independent mutual or social enterprise. There is no ‘one size fits all’ – new models will vary from council to council and will depend on the specifics of the service in question.
Central government (in partnership with the LGA and SOLACE) is actively supporting councils to explore ambitious delivery models. The new “Delivering Differently Programme” will offer 10 councils £100,000 each to examine the potential of new partnerships and delivery models to address the challenges now faced.
Inspiration can be taken from models which are already proving successful. Some of the most recognisable are Foundation Trust Hospitals, Academy Schools and the growing number of public service mutuals. They all have a few things in common. They benefit greatly from devolved decision-making and greater financial flexibility which means they can implement longer term financial and business strategies and quickly make service and systems adjustments. This has the dual benefit of making their services much more cost effective and relevant to service users.
For every council, in the year of “hard truths”, examining new delivery models has to be at least part of the solution.
Get in touch with us if you want to discuss options for your service; Andrew – 07779754553 or andrew@mutualventures.co.uk
Oliver – 07973742228 or oliver@mutualventures.co.uk
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