Is commercialism the answer? If so, what is the question?

Catherine Staite, Director of INLOGOV

 I often hear local government compared unfavourably with business, often by members who have had careers in business or industry. However, when I ask where they worked – they almost invariably name companies that are now defunct.  That makes me wonder if local government deserves this unfavourable comparison. That’s before I ponder the notable probity of the banks, the honesty of VW and the reliability of Cross Country Trains.

Commercialism is a loose term, covering everything from trading activities to the skills to commission, procure, manage markets and deliver services through complex contracts.  There also seem to be a number of implicit underlying meanings, including ‘entrepreneurial’ as in ‘risk taking’ and ‘tough’ as in ‘winner takes all’.  Those perceived meanings strike me as both very masculine and very old-fashioned.

Commercialism, however it is understood, is not a guarantee of success.  In fact, the wholesale importation of now discredited low cost/low effectiveness models of service from the private sector have actually generated failure demand.

So why do so many commenters think that increased commercialisation of local government’s functions or the acquisition of stronger hard and soft commercial skills is so necessary?  There are usually two key reasons; the need for agility in a time of rapid change and to maximize resources in a time of austerity.

Every book on local government that I have ever read, regardless of when it was published, starts with a statement about the turbulence and unprecedented change being experienced by local government at that time. That does demonstrate that everything is relative.   Was there ever a time  when local authorities were like stately galleons, built for stability not speed, breasting the waves, largely unmoved by external pressures or internal dissent, with the cry of ‘steady as she goes’ echoing through the corridors?

If that was ever the case it certainly isn’t true now.  Now many local authorities seem more like racing yachts – ploughing through stormy seas, with small crews and all hands on deck.  Many are agile, resilient and efficient with some truly excellent skippers who are tacking in response to current pressures while maintaining a clear view of where they are headed. INLOGOV’s study for Grant Thornton in 2014  highlighted the significant differences between local authorities in terms of their likely financial futures, even after taking account of the inequities of local government finance. The difference between the most and least agile isn’t a reflection of varying degrees of commercialism. It’s much more fundamental than that. The best are distinguished by mature relationships between political and managerial leadership, with shared understanding of risks and opportunities that enable difficult choices to be made without blowing the authority off course.

The importance of trust and a new set of skills and attributes, in order to maximize resources, is becoming ever clearer, as demonstrated by INLOGOV’s study ‘The 21st Century Public Servant’ which highlighted the importance of ‘municipal entrepreneurs’. Their role is about a lot more than commercialism. It is more about creativity working with agility while never losing sight of fundamental purpose of public services and retaining all the ethical underpinnings of stewardship.  Our study for DCN on ‘New Ways of Working’ demonstrates that toughness and the short-term pursuit of financial gain don’t bring success, selflessness does.

Mature relationships and 21st century skills are now forming the foundations of Combined Authorities and underpinning ‘devo deals’.  The potential gains are likely to be of an entirely different order of magnitude than those achievable through mere commercialism.

Catherine Staite

Catherine Staite is the Director of INLOGOV. She provides consultancy and facilitation to local authorities and their partners, on a wide range of issues including on improving outcomes, efficiency, partnership working, strategic planning and organisational development, including integration of services and functions.

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