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.

Do Danes co-produce? Yes, we do! And we do it in other ways than the British, as far as I can see.

Anne Tortzen

Here is a Danish success story about co-production. It involves cycling, of course, as we are discussing Denmark!

I am a Dane, currently based at INLOGOV as a visiting PhD student. I am working on a thesis on co-production in Danish municipalities, and I am getting increasingly challenged by this seemingly ambiguous, slippery and magic concept that is co-production. Is co-production a panacea to democratize and improve public services or is it just a concept invented to ‘sugar coat’ savage cuts in public spending by shifting responsibilities on to citizens? Or is it, for that matter, something in between?

At its core co-production is about active citizens, communities and governments working together to create better outcomes of public services. And I believe that to go on believing in the possibility of this, we must tell the stories of the successes.

So here is a success story about how Danes co-produce. It is about a project called ‘Cycling for all ages’, the core idea of which is that everybody – regardless of age and health – should be entitled to get ‘around and about’ on a bicycle and feel the ‘wind in their hair’. In more conventional terms it is about improving the quality of life of older and disabled people – and improving relationships and fostering friendship across people of different age groups.

So, the essence of the co-production initiative is this: Volunteer ‘pilots’ offer free rides on bicycle rickshaws (funded by the local council) to older and disabled people, who have difficulties getting around – or who would just like some new company and inspiration. The initiative started in Copenhagen four years ago and is now running in more than 60 Danish municipalities with a total of 2500 volunteer ‘pilots’.

The initiative was started in Copenhagen by an ‘ordinary’, but quite entrepreneurial citizen, Ole. At the time he was living close to care home in a residential part of Copenhagen and was observing the inhabitants in wheelchairs being pushed around the block. So the idea struck him: Why not give these inhabitants the opportunity of seeing more of the city? Ole, himself, is a keen cyclist. So he hired a bicycle rickshaw and knocked on the door of the care home, asked to speak to the manager and offered his bicycle services. And this is exactly the defining moment of the co-production process: How does a public servant respond to a citizen initiative such as this? As a bureaucrat thinking about the risks and hassle of the whole endeavor – or with trust and appreciation of an active citizen wanting to contribute? Fortunately, Ole got the latter reaction – and that, I think, tells us that the most important ingredient in successful co-production is trust!

So in which sense is this co-production? I would argue, that we are talking about ‘co-produced design and production of welfare services that enhance the quality of life’ made possible through contributions from care workers and councillors, active citizens and the older ‘service users’ themselves in the following way: The local councillors allocate means for buying one or more bicycle rickshaws and maintaining them. The care workers contribute by promoting the bicycle activity to the older people and assisting Tom in getting ready for his trip. Sometimes the care workers also volunteer to drive the bicycle. Volunteers of all ages (the youngest is only 12) and origins contribute as ‘pilots’ riding the bicycles and taking care of the planning and coordination of trips and of recruiting more volunteers – all via Facebook (check out 12-year-old Christian’s short clip by clicking here). And finally, Tom co-produces his own welfare service by deciding where he wants to go on the trip and what stories about his life he would like to share on the way. And he gets an immense boost in life quality out of it – as is obvious from this film about Torkild, aged 92, on a nostalgic trip through Copenhagen with Ole as his ‘pilot’.

It may or may not be, that this ‘additive’ co-produced service to the elderly saves public expenditure in the long run – but it surely does bring about quality of life and social capital. And that, I think, is the best we can hope for from co-production.

PS: The success story is no longer solely Danish. The concept of Cycling without age has gone international – just like the Danish TV series Borgen and The Killing – and is now taking off in more countries all over the world.

foto-at2-farve

Anne Tortzen is based at the University of Roskilde, Denmark. Alongside the PhD she works as a consultant on citizen engagement and co-production. Anne is the founder and director of Centre for Citizen Dialogue, which specializes in consulting with Danish and Nordic municipalities, ministries and institutions to develop citizen engagement in public policy and services.

‘If the rules aren’t written, you can write your own’ – Flexibility, Elected Mayors and Combined Authorities

Max Lempriere

At the first of a series of workshops hosted in early November by the College of Social Sciences at the University of Birmingham, with input from INLOGOV, The Public Services Academy and City-REDI, practitioners and academics from the world of local government came together to share experiences on the current combined authorities and city-region devolution agenda. In the first of a series of posts Max Lempriere, a doctoral researcher studying the formation of combined authorities, reflects on the day’s major talking points. 

Combined authorities are emerging as the arrangement of choice for local authorities across England keen to harness greater powers and funding from central government. Five have so far been established with another six in the pipeline. More will follow in the coming months and years.

One of the clearest challenges coming out of our discussion is that there is no ‘blueprint’ to follow in their design. It is up to each prospective combined authority to ‘bid’ for a package of powers and funding that reflects local needs and priorities in negotiation with central government. But what does this mean for those on the ground involved in those deliberations?

Underlying much of the discussion was an optimism that this kind of flexibility presents. One participant remarked ‘if the rules aren’t written, you can write your own’. But, accompanying this was also a frustration at the ambiguity and uncertainty that accompanies this kind of design flexibility. The need to ensure public value, a resilient institutional arrangement and a design that can achieve specific foundational objectives certainly raises the stakes.

Take the issue of elected-mayors. Agreeing to adopt an elected mayor is a necessary condition to achieving the full range of powers and funding available, but again there is flexibility in terms of what powers and competencies the mayor will have. If nothing else the mayor will become the figurehead of the combined authority, so a lot rests on ensuring their success.

There is a danger that if not carefully thought through the ‘mayor issue’ could undermine the success or resilience of the combined authority. A functional economic geography may be an appropriate basis from which local authorities can come together but the congruence of economic and political geographies is not a given. Participants agreed that the powers and ‘design’ of the mayoralty must be carefully negotiated to reflect local identities, political priorities and political geographies. Take the West Midlands, for example. Here the development of a combined authority has to navigate the deep historical tensions between Birmingham, the Black Country, and Solihull/Coventry. Would a mayor be able to negotiate these differences? Would any attempts to do so be met with hostility and, if so, what would that mean for the legitimacy of the mayor? Several participants at our workshop were concerned that if the mayor was to be seen as ineffective there is a danger that the whole combined authority could be at stake.

So what does this mean for combined authority designers?  The most obvious conclusion is that local authorities need to be leading the discussions, not central government. In the words of one participant, local authorities need to be ‘feisty’ in their negotiations and unafraid to ‘flex their muscles’. There isn’t a comprehensive deal without an elected mayor and there isn’t a combined authority without an effective mayor. How the mayor is presented, engaged with and positioned within the combined authority is more fluid and contingent than a set of formal powers suggests. Combined authorities should not rest on their laurels and assume that just because their mayor ‘works’ today it will do so tomorrow.

So should we write off their potential? Far from it! There are real, tangible opportunities to seize back control from central government. Everyone involved must be sensitive to both the enormous opportunities this presents but also the potential pitfalls of flexible, negotiable institutional design.

This series of workshops is being supported by the Economic and Social Research Council, Local Government Association and the Society of Local Authority Chief Executives (SOLACE) and is led by Catherine Staite, Director of INLOGOV and SOLACE’s Research Facilitator for Local Government.

lempriere

Max Lempriere is a final year PhD researcher at the University of Birmingham. His research interests include flexible institutional design, local government policy making, the politics of sustainable planning and construction and ecological modernisation.

Will we miss it when it’s gone?

Anthony Mason, Senior Associate INLOGOV

As the Housing and Planning Bill reaches its second reading in the House of Commons, Anthony Mason reflects on the slow death of council housing in England.

Have you noticed that ministers have taken to referring to council house tenancies as “subsidised tenancies” and council tenants as having “subsidised rents”?  The Housing Minister has especially embraced this Lynton Crosbie-esque habit – just for example in an interview with the Radio 4’s World at One on 14th October 2015.  Perhaps it’s understandable that ministers use this potentially emotive (and certainly inaccurate) language – but even our supposedly impartial civil service has adopted it in the formal consultation on the government’s “pay to stay” scheme out now.

If you google “subsidy” the one of the first definitions offered is a sum of money granted by the state or a public body to help an industry or business keep the price of a commodity or service low.  As aficionados know, council housing finance is a complexity wrapped in a convolution, but using that definition, by no means that I can think of, is council housing subsidised.

After many years of complicated national financial transfers where better off tenants bankrolled poorer ones; those English councils that retained council housing became self-financing on 1st April 2012.  This was a move long promoted by councils, developed by the prior Labour government, but actually put in place by Grant Shapps – that most Conservative of housing ministers.  Around 170 local authorities held housing stock at that time and of these, around 130 paid more than £13 billion to the government, with the government paying off around £6 billion of loans for the remaining authorities.  The deal was then that the service was ring-fenced and self-supporting; thus rents and judicious borrowing would support necessary expenditure on repairs and investment in homes.  The system is not supported by the taxpayer – either at the local or national level.  Clearly, some tenants claim housing benefit – which is a form of subsidy – but so do tenants in all sectors.

Ministerial attacks don’t end with imprecise language about the nature of council tenancies.  The Conservative government has set off a small earthquake around housing policy this year, only some of which is contained in the current Housing and Planning Bill (“pay to stay”; the right to buy for housing association tenants, and the forced sale of higher value council homes to pay for this).  Wider provisions include the ending of the requirement on developers to provide affordable rented homes as planning gain – and a likely requirement that only fixed term tenancies can be granted in future by councils and housing associations.

In a complete volte-face on self-financing, many of the Bill’s financial provisions will have the effect of imposing new levies on housing revenue accounts – as councils will have to make payments to government in advance, in recognition of the income they get from pay to stay and the forced sale of empty homes.  The Chancellor’s summer budget also imposed across the board real cuts in social rents.  And the specific housing provisions sit alongside welfare changes that affect so many social tenants of both housing associations and councils.

Perhaps a more refined understanding of housing language is needed to get to the root of what’s going on here.  Ministers’ promise is that homes sold under the right to buy will be replaced one for one.  What they actually mean is that homes let under social tenancies will be replaced by homes let at sub-market (that is, higher than social) rents or by low cost home ownership.  Where household incomes exceed an annual £30k outside London and £40k in London, social rents will be replaced with market rents.  Affordable (higher than social, but less than market) rented homes that were made available under planning gain settlements will now be replaced by low cost home ownership.  And many new developments of homes at affordable rents by housing association are being switched to home ownership and market rent.  So at every level of the system, lower rents will rise, or rent be replaced by home ownership.  Provisions from the coalition government’s “bedroom tax” (spare room subsidy); to the possible ending of lifetime tenancies, have the effect of increasing the turnover of council tenancies – and thus the speed at which social rented homes gradually convert up the rental-to-ownership ladder.

Whether one likes them or not, these changes constitute a coherent programme that seems to stem from a view that council housing is a problem that needs to be fixed – and that fixing it involves gradually stifling it.  While I wouldn’t argue for this proposition, I can at least see that it could be argued.  But the oddest thing about the government’s housing policy is that ministers have not set out to make such an argument.  Thus we have a radical set of measures bringing about the slow death of council housing without anyone being clear what the underlying disease is supposed to be.

So the usual confession: while I’ve worked in and around social housing all my adult life, I’m an owner occupier.  But I’m not blind to the harm that worship at the altar of ever higher house prices has done to our housing system and our economy.  It might just be that for UK PLC, our fixation with owner occupation does much more harm than council housing ever has.

Maybe we should all become council tenants?

Anthony Mason

Anthony Mason is a senior associate at INLOGOV where he specialises in consultancy around partnership and collaboration.  He started his career in local government and then spent more than 20 years in PwC’s public sector consultancy practice.  His professional background is in housing and neighbourhood regeneration.

ERDOGAN’S SNAP GENERAL ELECTION AND THE DESTINY AWAITING LOCAL GOVERNORATES IN TURKEY

Turkey’s General Election in June 2015 did not secure the majority that President Erdogan needed to realise his dream of transforming the country’s political system from a parliamentary to a presidential republic. In the aftermath of the election, all sensitive attempts by Turkey’s political parties to form a coalition or minority government failed. Therefore, the country faces yet another election, which will be held on 1st November.  In the meantime, the long established cease-fire between the government and the outlawed PKK (Kurdistan Workers’ Party) has collapsed and renewed fighting has broken out. Nobody knows what will happen in the upcoming election and what approach the country will take to handling the conflict.

And what might all this mean for local government in Turkey?  A round of interviews recently conducted with District Governors across the country has highlighted a range of challenges now confronting local level governance and public provision.  But before introducing these, it will probably be helpful to have an overview of local governance structures and public administrative arrangements in Turkey.

The local Turkish public administrative system comprises two distinct systems, one being the locally elected local/municipal authorities; the other being the governance of the central state within the localities – the latter comprising appointed governors operating at the provincial and district levels. The duties of local authorities mainly revolve around infrastructure provision and maintenance within local areas, including services such as road development, construction zoning, water facilitation and the like. In contrast, the central state, through the district governors, is responsible for a number of other key public services, including policing, education, agriculture etc.

In the past decade, local authorities in Turkey have experienced significant devolution of power from central government, with the result that much more day-to-day business concerning local communities as well as responsibility for strategic planning at the local level is now exercised by the local authorities and municipalities.  Such devolution has also involved the abolition of the special city administrations that had previously been headed by the provincial governors and the transfer of responsibility for infrastructure development in the villages and towns from the governors to the local authorities.

In light of such a significant programme of devolution, it was interesting to have the opportunity recently to learn from a sample of District Governors from across Turkey how the reform process was working out in practice and of the benefits and challenges that it was perceived to be creating.

As part of the author’s doctoral research, a total of 30 district governors were interviewed during summer 2015.  Of these, a few viewed  the developments as  potentially good for Turkey’s future in general albeit expressing some concerns about the implications for their own  role as governors – i.e. in relation to their responsibilities for  coordinating and leading the local branches of the central state’s administrative system. However, the majority of interviewees expressed a more pessimistic perspective and saw the change as the beginning of the end of the governor profession within the country. They highlighted, that the central administration, based in the capital city of Ankara, had transferred aspects of the governors’ authority and power to the local municipalities in lieu of devolving power or authority from the central government.

An intriguing question to be asked in relation to this otherwise bold devolution is why the shift of power stopped short of abolishing the governorships and the centre-appointed governors? And the answer would seem to lie mainly in two political concerns of the Turkish government at national level. First, there is the ‘Kurdish question’ – one of the most important issues that the Republic of Turkey has been facing for decades. The country has been quelling dissent from Kurdish rebels, particularly in its south-eastern and eastern parts, for some considerable time and the fear is that if the governorships were to be abolished, the Kurdish towns and cities would most likely want to claim autonomy from the Turkish state. Given that the governors act on behalf of the central government, they are seen as representing the state and symbolising national unity, which sends an important message within the context of the ‘Kurdish question’.

Second, the commitment to devolution is arguably less than whole- hearted within the central bureaucracy with Turkey having had a long tradition of a centrally structured state. Devolving power downwards to local administrations requires Turkey to break from that tradition, which will neither be an easy nor a quick process.

Given such circumstances, the future for devolution in this country remains somewhat uncertain, with the district governors unsure of the prospects and as a result often reluctant to exert their authority and leadership potential at a time when the spirit of localism grows ever stronger as does the people’s demand for enhanced democracy.  One suggestion discussed in the interviews with several governors was for the establishment of a new form of democratically-elected governorships.  Might this be a realistic way forward for Turkey in these challenging times?

saban

Saban Akca is a doctoral researcher in INLOGOV at the University of Birmingham. His research focuses on leadership in public administration, and his doctoral thesis examines the leadership performance of local-level district governors in Turkey.