Is Government Giving Value For Money?

Jason Lowther

When money is short, how we spend it becomes even more important. As central government reheats its arguments for austerity following the chaos of the last few weeks, I’ve been reflecting on the contents of the 2021 budget (just a year ago).  The 2021 budget set out not just spending plans, but also a souped up approach to measuring outcomes and cost-effectiveness of government spending. How are these playing out, and will they survive the No 10 merry-go-round?

Rishi Sunak, then eight months into the job as Chancellor, noted that government borrowing was relatively high after the pandemic, warned of the public finances’ exposure to rises in interest rates, and outlined how spending was being linked to the delivery of outcomes alongside across the board ‘efficiency savings’:

The fiscal impact of a one percentage point rise in interest rates in the next year would be six times greater than it was just before the financial crisis, and almost twice what it was before the pandemic…

Decisions have been based on how spending will contribute to the delivery of each department’s priority outcomes, underpinned by high-quality evidence. The government has also taken further action to drive out inefficiency; SR21 confirms savings of 5% against day-to-day central departmental budgets in 2024-25. (page 2)

The “priority outcomes” are the latest in a long line of attempts to prod government spending into delivering effectively on political priorities, rather than blindly increasing/decreasing by x % compared to last year.  A 2019 report from the Institute for Government helpfully outlines many of these earlier initiatives (summary from the House of Commons Library) including:

  • “Scrutiny programmes” and the Financial Management Initiative (FMI), introduced under Thatcher.
  • The Cabinet Office and Treasury set up the Financial Management Unit (FMU) in 1982 to help with creating plans under the FMI.
  • The “Next Steps” report, published in 1988, which recommended the establishment of executive agencies to carry out the executive functions of government.
  • Tony Blair’s administration developed a greater focus on performance targets and Public Service Agreements (PSAs) which put these targets on a formal basis.
  • In 2001, Blair’s government also set up the Prime Minister’s Delivery Unit (PMDU), which was intended to coordinate PSAs and bring them under more central control.
  • Under the coalition government in 2010-15, PSAs were abolished and replaced with Departmental Business Plans (DBPs). These shifted the focus from targets to actions – in other words, they listed what each department would do and by when, rather than what they sought to achieve.
  • Under the Conservative government in 2016, DBPs were renamed to Single Departmental Plans (SDPs), which were themselves renamed to Outcome Delivery Plans (ODPs) in 2021. According to the NAO, SDPs (and by extension, ODPs) are supposed to be “comprehensive, costed business plans”.

As well as having to write down what outcomes they want to achieve, and how they will know whether that is happening, under the SDP system departments were also required “to assess progress in delivering their priority outcomes [and] … share regular performance reports with HM Treasury and the Cabinet Office”. 

In the 2021 spending review, the departmental outcomes were spruced up to reflect the (now last-but-one) PM’s five priorities of levelling up; net zero; education, jobs and skills; recovering the NHS; and reducing the volume and harm of crime.  

This blog’s audience may be interested in “Where does local government fit in this compendium of key priorities?”  The answer is a little depressing: on the last line of the last page (page 30 of 33), just before the devolved government departments. The relevant outcome is inspiring enough: “A sustainable and resilient local government sector that delivers priority services and helps build more empowered and integrated communities”, albeit with the reassuringly non-SMART measure that “the department will provide narrative reporting on progress for this outcome”.  Of course I exaggerate, because local government has critical inputs to very many of the earlier outcomes too, but it’s hard not to conclude that local services and communities were not yet at the top of the ministerial attention list.

Will the “priority outcomes” survive the whirlwind of ministerial movements and unforced economic missteps?  After the last seven weeks, I’m not going to make predictions – but we should know in the next month, and alongside the financial figures they could be our best hint yet on where a Sunak government is heading.

Picture credit: https://www.youtube.com/watch?v=Du_6mRV8Hm8

Jason Lowther is the Director of INLOGOV. His research focuses on public service reform and the use of “evidence” by public agencies.  Previously he worked with West Midlands Combined Authority, led Birmingham City Council’s corporate strategy function, worked for the Audit Commission as national value for money lead, for HSBC in credit and risk management, and for the Metropolitan Police as an internal management consultant. He tweets as @jasonlowther

Schools and local authorities – where next?

Edwina Grant

Recently, politicians at Lancashire County Council have reflected on the national picture regarding the ambition of the Department for Education, contained in the White Paper on Education and the subsequent Schools Bill.  The Bill aims to move all schools to become academies and to allow councils to open a Local Authority-established Multi Academy Trust (MAT), although some would argue that this was technically possible before.

The government’s aim to ensure that by a notional target of 2030, 90% of pupils meet the expected standard in maths and reading at Key Stage 2, and that the national GCSE average grade in both English language and maths is increased from a 4.5 to 5.  It sets out its strategy of delivery: “ensuring excellent teachers, supporting teachers deliver high standards for all pupils, deploying targeted support for those who need it most, and ensuring a stronger school system”.

Key policies to achieve this include the ambition that there will be a fully Trust led system with a single regulatory approach, through growth of strong multi-academy trusts.  The Bill envisages the establishment of new multi-academy trusts (MATs), encouraging existing and new MATs to expand and allowing trusts to be established by local authorities.  The notional ambition is, that by 2030 all pupils will be taught in a strong MAT, or their school will be planning to join one.

The White Paper was released in March 2022 and subsequent Schools Bill was introduced to Parliament in May 2022.

At Lancashire County Council, we have a good relationship with our local authority-maintained schools, with single academy trusts (SATs) and with multi-academy trusts (MATs).  We have prioritised the core responsibilities for local authorities on promoting the children’s right to education in terms of admissions, challenging exclusions and supporting alternatives and working with our schools collaboratively on behalf of young people with special educational needs.  We became even closer as a result of the challenges of the Covid pandemic.  The Schools Bill, however, is a challenge for us, as at the time of writing, 560 of our 628 schools are local-authority maintained.

There are obviously options for us.  Firstly, to continue the status quo and to let the market take its course.  Secondly, to proactively manage the market by working closely with the new regional Department for Education teams to ensure that our local authority voice is heard as more schools are encouraged to join MATs and indeed, more MATs, as yet unknown to us, are encouraged to join our school landscape.  Thirdly, to express our ambition to establish a local authority maintained multi-academy trust.

After much deliberation, including briefings and discussions with all our councillors, and close consultation with the regional office for the Department for Education, we considered that options 2 and 3 should be explored further.  We are actively strengthening our existing relationships with MATs and trying to understand who the new players might be in our bordering geography of which, given the size of Lancashire, there will be many.  We have also submitted an expression of interest to establish a local authority established multi-academy trust specialising in special education.  We decided on the special education specialism as we have a high level of strength in that sector, and also an existing deep relationship on a pupil level with the children in those schools.

The outcome is yet to be decided but thinking about the next steps has brought us closer to key questions about our existing commercial activity with schools in our authority.  Will the new MATs who take on existing county schools still buy our services, and if they do, in what volume, given the financial pressures ahead?  How do we shape our local elected councillor involvement to ensure the democratic voice is heard, and how do we advise and support the multi-academy trusts so that they fully understand the community context of our local offer for the most vulnerable families and their children?

Time will tell, but this is potentially the most interesting change since the implementation of the 1988 Education Reform Act, which reduced the powers of local authorities over schools.  As I was an education officer in Lancashire at the time, I can attest that it took enormous amount of goodwill from both councillors and officers to realign our systems and our structures so that our schools could get the best of that significant change.  To think back on that time now, that schools previously did not have full control of their budgets, seems strange.  I hope that another 30 years on from now, we will be able to reflect as positively on the changes ahead of us.

References:

Edwina Grant OBE is Director of Education and Children’s Services for Lancashire County Council.

Research to Help Rebuild After Covid-19

Jason Lowther

Last month Sir Patrick Vallance, Chief Scientific Adviser to the UK Government, met (virtually) with over 100 researchers and policy officers to discuss the output of a six-month programme looking at some of the fundamental challenges to our society, economy and ways of living.  Commissioned by the Government Office for Science, the Rebuilding a Resilient Britain programme aims to help government with medium- and long-term challenges relating to the challenges of Covid-19, captured under nine themes including “vulnerable communities”, “supporting services”, and “local and national growth”.


The overall programme was led by Annette Boaz and Kathryn Oliver, two experienced social scientists whose work focusses on the use of evidence.  In their recent LSE article, they explain the background to the programme and how plans were upturned in March with the introduction of Lockdown in the UK.  

I was particularly involved in the “supporting services” theme, convening the work around local government.  It is an exciting initiative to be involved with, not just because of its scope and pace, but also because of the range of people engaged: researchers and academics, government policy and analysis officers, and funders.  What I found particularly interesting was how different Government departments and different academic disciplines were often looking at very similar issues but framing them from distinct perspectives and using diverse language to describe them.  This highlights the need to develop shared definitions of issues and ways to address these – considering “problem-based issues” in the round.

As well as summarising the existing research evidence around each of the identified themes, the work identified several “gaps” in the extant evidence base and opportunities for new research, policy/research dialogue, and knowledge exchange.

Within the Local Government theme, we recognised that LG’s role proved critical in the first stage of the pandemic, for example in supporting vulnerable and shielded people, enabling voluntary community groups, freeing up 30,000 hospital beds, housing over 5,000 homeless people, and sustaining essential services such as public health, waste collection, safeguarding and crematoria.  This role is likely to increase in future stages of the pandemic, with more responsibility for local surveillance testing and tracing, implementing local lockdowns, economic development, contributing to a sustainable social care system, and supporting further community mutual aid.

There is already a good evidence base showing how local government is playing vital roles in responding to and recovering from the pandemic.  We identified four main themes: empowering local communities, delivering and supporting services, devolution and localisation, and funding.
For each issue we considered the key policy and practice implications of existing evidence, the evidence gaps and the ways in which gaps might be filled.  

Around empowering local communities, for example, evidence showed that LAs responded quickly to the pandemic, and well-functioning local systems emerged to tackle the immediate crises in many parts of the UK.  Areas adopted a range of strategies in partnership with local communities. But informal community responses can lack coordination, resources, reach and accountability; and some groups face barriers to involvement.  Further evidence is required on what works in strengthening community support networks, empowering different types of communities, and co-producing public services.  Councils also need to understand better how staff, councillors and the institutions themselves can change to empower communities.

There has already been some important learning from this work, such as recognising the treasure trove of useful knowledge contained in existing evidence and expertise.   We need to get much better at using evidence from, for example, the evaluation of past policy initiatives.  The programme is helping to strengthen relationships across government, including some new and more diverse voices, and will be useful as government departments revisit their Areas of Research Interest post-Covid.  The thematic reports are due to be published in coming weeks.

I will be exploring the findings for other areas of interest to Local Government in future articles.

[This article also appeared in the Local Area Research and Intelligence Association December newsletter]

Jason Lowther is Director of the Institute for Local Government Studies at the University of Birmingham.

Councils should make better use of churches to bring communities together

Dr Madeleine Pennington

As if one were needed, Croydon Council’s issue of a section 114 notice in November offered a further stark reminder of the financial challenges facing local authorities. After a decade of austerity, the pandemic is stretching (and will stretch further) councils already running on a shoestring – and one consequence of reduced public spending is a reliance on faith and community groups to plug the gap.

This phenomenon has already led to a quiet shift in the role of faith in society. Faith-based volunteer hours rose by almost 60% from 2010-2014, and in 2015 this time contribution alone was valued at £3 billion. Between 2006 and 2016, faith-based charities were the fastest growing area of the charity sector. Two thirds of the nation’s growing number of foodbanks are now coordinated by the Trussell Trust – a Christian charity whose most recent figures show an 89% increase in need for emergency food parcels in April 2020 compared to April 2019. As of 2017, 93% of Anglican churches alone were involved in foodbanks in some way.

The result is one of the unspoken paradoxes of modern society: faith is increasingly assumed to be private, and yet is becoming ever more public in some very concrete ways.

However, taking churches as a case study, research published last month by Theos think tank observes that councils’ engagement with faith groups has predominantly been driven by necessity rather than positive embrace. Nervousness around proselytism and the inclusivity of faith-based services mean that local authorities tend to work with a few churches they trust, and the level of engagement varies hugely between areas: while some councils were described as “open and willing” in this research, church-based participants in other areas felt “invisible” or viewed with “suspicion”.

At the same time, while churches are increasingly relied upon to provide necessary services, they are far less often included where the wider health and flourishing of their local communities is concerned.

This is particularly problematic given that many of the challenges facing the country (and our local communities) fundamentally go beyond a financial shortfall. The Leave campaign won on an argument that Brexit was about more than economics. So too, the pandemic is more than a public health crisis: it is an act of solidarity for individuals so profoundly to curtail their freedom to protect the most vulnerable in our communities. Likewise, our response to many other critical issues facing our society – racial injustice, loneliness, our willingness to welcome migrants – rests on investing in the strength of our common relationships.

In other words, these are social cohesion challenges – and churches are uniquely placed to meet this relational need. They provide an unrivalled source of physical capital scattered equally throughout the country, acting as the social capillaries of their communities, protecting a wellspring of formal and informal leadership, convening difficult conversations between groups, motivating individual members of their congregations to give to wider society, and seeing (and enacting) the full potential of their communities where others do not. 

Most churches have also reflected deeply on the appropriate role of faith in their community work; having an open conversation about boundaries and expectations here is far preferable to writing off their contribution altogether. But neither should councils assume the “appropriate” role of faith in the community is no role at all; rather, it is churches’ desire to love and serve their neighbours which makes them so well-equipped to serve their communities in the first place.

As budgets are further slashed in the months (and perhaps years) ahead, churches will undoubtedly be called upon even more to bridge the growing chasm between need and capacity. However, if the context of those relationships can move from a reluctant “needs must” basis to one of open and compassionate collaboration, councils may well find that churches have much more to offer than they currently are. Given the steep climb ahead, that is surely a welcome revelation. 

The Church and Social Cohesion was commissioned by the Free Churches Group, and prepared independently by Theos, and published alongside a ‘how to’ booklet for policymakers and local authorities hoping to engage better with churches. Download them here.

Dr Madeleine Pennington is head of research at the Christian thinktank Theos

This article was published in the Local Government Chronicle on 1st December 2020.

Keeping the window open: the 21st Century Public Servant and Covid-19

Image by @laurabrodrick

Prof. Catherine Needham

Local authorities had experience of managing short-term local crises, but the national and long-lasting crisis created by Covid-19 has been something new outside wartime. Local authorities had to manage the local implications of the lockdown and Covid-19 preparedness in their area whilst also moving all of their own non-essential workers to a home working model.

Our 21st Century Public Servant research (first published in 2014) looked at the changing roles, skills and values of people working in local public services. Over the previous six months we have partnered with North West Employers to understand how Covid-19 is changing working practices and skills, and how it links to the 21st C Public Servant findings. Given the constraints of doing fieldwork with local authorities themselves at a time of crisis, we gathered the learning through a series of conversations with the NWE team, published in our new report Keeping the Window Open.

The strain on local authority staff has been intense, as it has on the whole population. However some of the changes in organisational practices have been seen as positive, and have flagged opportunities for long-term reconfiguration. Some of our key findings include:

The importance of Storytellers: the most effective public servants during the crisis were seen by interviewees as those who were values-based and able to tell stories that drew on those values, setting out a path for the long term. They were the energiser and cheerleader – ‘we can get through this’ – despite not knowing the length or trajectory of the story.

The need for Entrepreneurs: the pandemic context has meant that staff have had to innovate, without always waiting for permission, and in some cases bypassing the usual sign-off procedures. The speed and extent of change has been unlike anything in local government before.

A new kind of Resource weaver: A key part of the Covid response has been using internal resources differently. Redeployment has been extensive, which has helped to break down silos within organisations. Many teams changed roles completely – for example leisure services and democratic services teams took on tasks like delivering PPE and setting up community hubs. The urgency and scale of the task made possible changes that otherwise would not have happened. As one of our interviewees put it, ‘People have been more willing to cross organisational lines, looking at partners and saying we can’t afford you to fail.’

Professional skills have been vital for those working in public health, environment health, planning and emergency response. However for many others, it is their more generic skills that have come to the forefront during the Covid-19 crisis. Through skills matching processes, there has been a new understanding of which individual skills are transferable. As one interviewee put it, ‘Lifeguards and fitness instructors have been redeployed to do community support because of their personal style and approach rather than their technical skills.’

Mass working from home has required high trust relationships with and between staff: ‘I think some managers have had their eyes opened about how home working can work. One local authority had no home working at all before this, they didn’t allow it – they had to go straight to 100 percent’. This creates questions about the future beyond Covid-19: ‘Are we prepared to let go and let people continue working from home or will we go back to the long hours culture? Can we focus on outputs and outcomes rather than hours worked?’

Something we didn’t address in the original 21st Century Public Servant research was endurance. It is still unclear how long this crisis will last. In the early phases at least there was hope that the lockdown could be short. Now it is clear that home working will continue for many people: ‘we won’t have everyone back at work ever again’. However, many have found home working to be much more intense, with few opportunities for down time, such as the chats in the lift with colleagues or the daydreaming on the train: ‘There isn’t much informal in my day at the moment. The intensity of it can be quite exhausting. How do we sustain the informal interactions like we had in the office?’

The long-term organisational legacy of Covid-19 is unclear, but the months of the crisis have made much clearer what public services are for and what the people working in them can achieve. Organisations and individuals need to think about how to keep open the window of change, and what are the new working cultures, roles and skills that can be sustained for the future.

This blog was originally published on the 21st Century Public Servant website: https://21stcenturypublicservant.wordpress.com/

Catherine Needham is Professor of Public Policy and Public Management. She is based at the Health Services Management Centre, developing research around social care and new approaches to public service workforce development.

Public Inquiries, Public Value?

Justine Rainbow

Public inquiries are a frequent element of democracy in the UK: yet the way that media and public view them can be contradictory.  For some, they are the pinnacle of independent investigations and calls for inquiries almost inevitably follow any tragedy or scandal.  For others, they represent an enormous drain on public funds whilst delivering little tangible benefit.

I recently completed research considering the value of public inquiries from the viewpoint of those running them, examining whether government control over nominally independent inquiries is too great, and assessing the effectiveness of inquiries through the lens of public value theory, championed by Mark Moore in his 1995 book on creating public value.  My research began with analysis of the literature, including earlier reviews of inquiries by – among others – the Institute for Government, the National Audit Office and a select committee investigation into the impact of the Inquiries Act.  Picking out a number of common themes, I tested their validity among a small group of interviewees including current and former inquiry secretaries and solicitors, panel members, and a handful of other senior staff.

My research identified two main areas in which inquiries delivered less value than they should: in the start-up phase, and in the implementation of their recommendations.  All my interviewees agreed that the first months of an inquiry are harder than they should be.  Government, perhaps keen to demonstrate non-interference, can be slow to provide support and guidance on how to run an inquiry.  Lessons learned reports – written by secretaries at the end of each inquiry – tend to be lost in government recordkeeping systems.  Despite persistent calls for a centralised support unit for inquiries, from inquiry insiders and outsiders alike, have been resisted by successive governments for two decades until last year when a small unit was finally established.

The other main area of limited effectiveness is at the other end of the inquiry’s lifespan, often once the inquiry itself has ceased to exist.  Recommendations are non-binding: both public and private organisations can reject or ignore recommendations; those that are accepted can be allowed to quietly fade away once public and media interest wanes. A lack of monitoring means that the impact of inquiries is invisible to most.  Non-implementation of recommendations is perhaps the main area of ineffectiveness and public value failure for too many inquiries.

Public value theory provided a framework for analysing the extent of government control over inquiries.  Its concept of the ‘strategic triangle’ – developed by Philip Heymann in the late 1980s and refined by Moore – suggests three elements that should make an effective organisation: mission, external support and operational capacity.  Criticism arises in the literature that government has too much control over the scope of inquiries (their mission) and can close an inquiry (withdraw their external support) at any time.  However, the officials I interviewed found neither of these to be a significant problem and therefore not a barrier to delivering effective public value. Scope is discussed and agreed with the independent chair, and a minister is highly unlikely to close an inquiry that they have established, particularly when support from victims and the wider public is high.

However, interviewees were concerned over implementation of recommendations, which can be rejected by public and private sector organisations alike, with little transparency of reasoning.  Some felt there should be a dedicated body or bodies responsible for monitoring implementation and enforcing transparency; others felt monitoring mechanisms already exist – Parliamentary Select Committees for example – but are poorly utilised.

Operational capacity also tends to rest – initially – with government.  Many inquiries are staffed by officials with no prior inquiry experience and my interviewees had generally found it difficult to work out ‘how to do it’.  Guidance issued by the Cabinet Office is out of date and provides limited assistance.  Commercial frameworks to assist inquiries with procuring their specific needs, such as hearing centres or evidence management systems, do not exist.  Ultimately, new inquiries have to rely on the willingness of other inquiries to help them get started; indeed my research found that inquiries could be much more proactive in disseminating guidance and helping new organisations establish themselves rapidly.

But on the subject of government control, public value theory argues that it is right for inquiries – with their typically high expenditure – to remain within the control of elected politicians, even if this blurs the lines of independence.  With the beginnings of a centralised support unit for inquiries and an evolving network of intra-inquiry knowledge transfer, the problems around start-up may diminish in the future.  Monitoring recommendations is a trickier subject – the main difficulties being the identification of an appropriate body with the authority to demand responses from both public and private sector organisations.

For those of us running inquiries, we naturally believe that they deliver value.  Most critically they provide a degree of catharsis for victims and their families.  The information made available by inquiries also allows the public to assess facts for themselves. But we also recognise that the early steps could be much more efficient and that recommendations don’t always make the impact we hope for.  The apparently simple steps needed to improve these two elements (more support from government and establishment of a monitoring body) are in fact complicated but I look forward to the future of inquiries with some confidence – things are improving and there is a drive in the inquiries community to lobby for and work towards better things.

 

References

Moore, M. (1995) Creating Public Value: Strategic Management in Government (Harvard University Press: Cambridge, Massachusetts).

National Audit Office (2018). Investigation into Government-Funded Inquiries (House of Commons: London).  Available at https://www.nao.org.uk/wp-content/uploads/2018/05/Investigation-into-government-funded-inquiries.pdf,

Norris, E & Shepheard, M. (2017) How Public Inquiries Can Lead to Change. Available at: https://www.instituteforgovernment.org.uk/sites/default/files/publications/Public%20Inquiries%20%28final%29.pdf

Parliament. (2014) House of Lords Select Committee on the Inquiries Act 2005 The Inquiries Act 2005: post-legislative scrutiny, London: The Stationery Office Ltd. Available at:  https://publications.parliament.uk/pa/ld201314/ldselect/ldinquiries/143/143.pdf

 

Justine Rainbow is Head of Information Management at the Independent Inquiry into Child Sexual Abuse.  Ten of her twenty years as a civil servant have involved working with or for public inquiries.  During her MPA with the University of Birmingham, her dissertation focused on the public value of inquiries.