Councils are investigating a variety of business models to protect frontline services from economic meltdown. But sound management practice doesn’t necessarily make for good democratic accountability, says Shaun Campbell
March 2010
If nothing else, the financial squeeze is having a profound effect on the thinking behind the shape and structure of the local authority of the future.
Barnet Council is pushing ahead with a business model adopted from the no-frills airlines such as EasyJet and Ryanair. It plans to offer a basic service delivery programme to all residents with enhanced services, mainly contracted out to the private sector, to those who are able and prepared to pay more.
Lambeth is pursuing a policy inspired by the John Lewis Partnership, Britain’s biggest and most successful workers’ co-operative. The council’s residents will be encouraged to get involved in running services and will be in line for financial rewards if they can deliver them better and cheaper than under the current arrangements.
Both these approaches appear more radical at face value than they might turn out in practice. Democratic accountability has yet to be worked effectively into either proposal and it remains far from clear which services Barnet would impose a surcharge for, or the criteria by which Lambeth would award John Lewis-style bonuses.
Sharing the load
A third model, which perhaps lacks the headline-grabbing appeal of EasyCouncil or MutualCouncil, is the shared services method, where local authorities pool resources, staff and expertise to make efficiency savings.
There is nothing especially new in this approach. The Improvement and Development Agency (IDeA) has been fostering this concept for at least a decade, generally focusing on how second-tier district councils can co-operate to rationalise and streamline their services.
In this context it’s worked pretty well. The district councils under the umbrella of Kent County Council, for example, are working towards sharing services in IT procurement, council housing maintenance, and waste collection and recycling. These plans will go ahead provided they can show a cost saving of at least 10%.
But in the west country, they are going further. On 25 February, the district councils of East Devon and South Somerset – the largest in the south-west – approved proposals to share a chief executive, management team, and procurement and specialist positions. The CEO of South Somerset is taking early retirement; the CEO of East Devon has doubled his responsibilities, if not his pay packet. But the councils will remain separate authorities and the elected councillors will continue to serve their existing populations.
In strict financial terms, all this seems to make sense. What’s not to like about a council that makes efficiency savings by co-operating with its neighbours? The shared service method is endorsed by central government. It’s implicit in at least two of the recommendations of the recently published ‘Putting the frontline first’ report. The Audit Commission Scotland has also put its weight behind the proposition, urging councils to consider its benefits as they face up to the financial squeeze.