Delivery of public services and economies of scale: Cooperation as an alternative for small municipalities

/ inlogov / Leave a comment

Germà Bel

The economic crisis has strongly affected many developed countries, and has caused serious tensions in government finances. These constraints are particularly important at the local level, because local governments have limited taxing bases, and fiscal competition is stronger. Policy discussion on local government reform and local cost reductions, as well as increasing efficiency in local service delivery, is widespread.

Besides the measures of suppression or reduction of intermediate local government in some countries, the most relevant feature of local government organizational reform is the search for a better scale, to be able to provide local services in a more efficient manner. A policy frequently proposed to reduce costs is merger of municipalities. In practice, most experiences worldwide have had compulsory character, given the usual reluctance of municipalities to merge. However, it is by no means clear that municipal amalgamation results in cost reduction.

An alternative reform of local service delivery increasingly which is increasingly used has been intermunicipal cooperation, which focuses on functional consolidation of services instead of focusing on amalgamation or consolidation of governments. Little is yet known about why municipalities engage in cooperation to deliver local public services.

Shedding further light on this question is the aim of our recent article ‘Why do municipalities cooperate to provide local public services? An empirical analysis’. We use a database of the Spanish region of Aragon, characterized as having many small municipalities. Our empirical analysis confirms that small municipalities need to cooperate with other municipalities so as to reduce the costs of providing services. The need to exploit scale economies, which is not possible for small municipalities individually, may be one of the main factors driving the decision to cooperate.

Of course, municipalities could also contract to a private vendor to benefit from scale economies. However, higher transaction costs with privatization seem to be particularly influential in the decision of local governments to privatise or cooperate in the delivery of solid waste collection. Our analysis shows that small municipalities prefer to cooperate so as to reduce costs, while larger municipalities prefer to privatise the delivery of the service.

The clear policy implication of our work is that intermunicipal cooperation, as opposed to privatisation, may well be an optimal solution for the delivery of services by local governments in small municipalities. Municipalities of this type have to face the problems of a lack of competition and high transaction costs, while facing the need to exploit scale economies. By cooperating, scale economies can be achieved with lower transaction costs and fewer concerns for competition than is the case for private production.

A full account of this research is available in my recent article with Xavier Fageda and Melania

Full details of this research are available in my article with Xavier Fageda and Melania Mur: Why do municipalities cooperate to provide local public services? An empirical analysis.  Local Government Studies, 39(3), 435-454.

bel

Germà Bel is professor of Economics at Universitat de Barcelona and Visiting Professor at Princeton University (Woodrow Wilson School). His research focuses on public sector reform, with a special emphasis on privatization and regulation, and he is particularly active in the study of transportation infrastructure and local public services.

Building public trust in policing? The contribution of Police and Crime Commissioners, one year on

/ inlogov / 1 Comment

John Raine

The ‘Plebgate’ saga, which has now drawn apologies to Andrew Mitchell from three chief constables, has once again raised questions about police integrity and dented public trust and confidence in policing more generally. Building such trust was, of course, one of the Coalition Government’s arguments for introducing Police and Crime Commissioners (PCCs) – and, as the first anniversary of those elections is now close upon us; it seems timely to consider what difference PCCs have so far made.

It was, we all remember, an inauspicious start; with an embarrassingly low electoral turn-out (averaging less than 12 per cent) because of poor advance publicity on the new PCC role; failure to provide most voters with candidate election leaflets, and choice of a November polling date when no other local or national elections were taking place. Moreover, matters seemed to get worse in subsequent months with critical media headlines concerning the appointment of deputy commissioners and youth commissioners; reports of disagreements and discord with chief constables, and discontent over policy priorities and budget decisions.

But one year on, with PCCs becoming established in their roles, the picture has begun to look rather more settled. It is, for sure, too soon to assess the impacts – beneficial and otherwise – of the new police governance framework. But a recent round of ‘stock-take’ interviews with a small sample of PCCs (including Conservative, Labour and Independent office holders), has highlighted at least two key respects in which the directly-elected model of governance already seems distinctly different from the previous regime of Police Authorities.

First: the new PCCs are giving much more priority to public engagement – they are out and about on a near daily basis, presenting themselves and taking feedback at council meetings, in open public meetings, and indeed, in shopping precincts and market squares around their (very large) patches. They are also all actively exploiting the potential of Facebook, Twitter and other social media in reaching-out and communicating and handling considerably more direct correspondence (email and post) and telephone calls from citizens. Their public profile is already much higher than that of Police Authorities.

Second: there is a stronger sense of ‘local leadership’ to their work. The Home Office has admirably resisted the temptation to try to drive the new system and impose its own perspectives and priorities on PCCs. Although cuts in all police budgets have been driven by reductions in Home Office grants, Westminster and Whitehall have generally allowed PCCs to get on with the job locally as each considers best. As a result, there is more diversity between the PCCs with regard to their approach and priorities in the role than was previously apparent with Police Authorities.

Relationships and accountabilities with chief constables and with other criminal justice and local governance agencies are intriguingly variable, as each PCC brings their own personality and preferred style to the role. Indeed, it is clear that the different career backgrounds and experiences of each PCC are colouring and shaping their approach to the role and their priorities.

By the time of the next PCC elections – scheduled for May 2016 – it will be interesting to gauge the significance and durability of these early signs of change towards stronger democratic engagement and local accountability, and to see what, if any, are the implications for public trust and confidence in policing. At least a more lively public debate and much higher turn-out are surely to be expected next time.

raine

John Raine is Professor of Management in Criminal Justice at INLOGOV. He has been involved in criminal justice research, consultancy and teaching at Birmingham for some twenty-five years and has a strong track record of commissions for the Home Office, Lord Chancellor’s Department/Department for Constitutional Affairs/Ministry of Justice on aspects of policy and practice within the criminal (and civil) justice sectors.

Want a 50% turnout in a local election? Try Neighbourhood Planning

/ inlogov / 1 Comment

Chris Game

Yes, there were other news stories last weekend – Grangemouth, St Jude, Plodgate, Merkel’s mobile, Lady Gaga’s new album. Still, a more than 50% turnout in something local governmenty surely merited some kind of headline.

Last autumn, remember, the national turnout in the police commissioner elections was under 15%. Yet on Thursday, in the Cheshire village of Tattenhall, they voted in droves – not for a mayor, councillor, or commissioner, but to express overwhelming backing for their neighbourhood development plan.

From the damp squib of elected mayors to the micro-meddling of Communities Secretary Eric Pickles, the Coalition’s localism agenda has hardly been an unqualified triumph. With neighbourhood planning, though, it does seem to have hit on something capable of imbuing in at least some of us “a zeal for participation”, as Nancy Holman put it in her recent, more conceptual, discussion of the topic.

Introduced in the 2011 Localism Act, neighbourhood planning is about giving people more influence over planning decisions affecting their daily lives: choosing where new homes, shops and offices should be built (or not built), what these buildings should look like, and what infrastructure is needed.

The Act allows parish and town councils or other representative community groups (as in the Upper Eden and Exeter cases described below) to formulate Neighbourhood Development Plans (NDPs), that will shape development in their area – provided they ‘have regard to’ national policies and conform with local planning strategy.

Proposed NDPs must pass an independent standards check, usually by a planning inspector, and are then put to a referendum, organised and paid for by the local planning authority. If the Plan receives majority approval, the planning authority must adopt it, and it becomes part of the legal framework with which future planning decisions must comply.

Last Thursday, in the fourth of these referendums, nearly 52% of residents turned out and 96% of them supported the Tattenhall and District NDP – which means it now has legal status? Well, not quite yet.

game table

The NDP is a professionally prepared 30-page document replete with a vision, objectives, a strategy, implementation plan, maps, appendices, and six clear policies on various aspects of community life. But not all policies are equal, and here Policy 1 on Housing Growth is clearly more equal than the others that flow from it.

There are currently 1,090 homes in Tattenhall parish and the Plan proposes allowing up to 30 new homes in the built-up village in the period to 2030, plus some smaller scale development elsewhere in the parish. Three national housebuilders, however – Wainhomes, Barratt Homes, and Taylor Wimpey – have applied to build a total of 305 homes in what the Plan regards and rejects as “large-scale inappropriate development along existing village boundaries”.

The builders contest some aspects of the Plan and also the independent examiner’s impartiality, and the first two firms have lodged a judicial review challenge, which, until the High Court has deliberated, will prevent the Plan being formally adopted and joining what Planning Minister Nick Boles has called the quiet planning revolution.

He used the phrase back in March to describe the similarly positive outcome of the first referendum in, appropriately enough, Eden – though not the Garden thereof, but Eden Valley to the east of the Cumbrian Lake District.

The Upper Eden NDP is quite different from Tattenhall’s, not least because the area is extremely sparsely populated and about 17 times Tattenhall’s size. Again, the main focus is housing, but the proposed development rate here is 40 homes a year, and 545 over the plan period to 2025 – a higher total than the 479 in the district council plan, with all 66 extra homes allocated to rural areas that the parish councils involved in preparing the NDP felt had previously been overlooked.

Other policies include increasing affordable rural housing by permitting more conversions, incentivising developers to provide more housing for older people, and improving broadband provision. This being the first NDP referendum, there was a lot riding on it, not least for Ministers, and Upper Eden delivered. In a 34% turnout – nearly double that for Cumbria’s police commissioner vote – 90% backed the Plan.

The St James area of Exeter, site of the next plan that went to referendum, is completely different again: 6,000 residents sandwiched between the city centre and university campus in a community that has been losing its traditional and diverse character through the intrusion of traffic and car parks, neglect of green space, but particularly the conversion of family homes into houses in multiple occupation (HMOs) – student occupation.

The NDP was prepared by the Exeter St James Forum, a group of local people, including students, brought together initially by residents’ associations. Key policies included restricting the spread of HMOs and bringing more social balance to the area, encouraging small businesses, a tree planting campaign, and identifying certain residential streets for ‘home zone’ treatment with reduced and slowed traffic.

In a May 2nd vote in a student-dominated ward, turnout was an unsurprisingly disappointing 21%, but the endorsement of the Plan a positively Putinesque 94%.

The last of the four NDP referendums to have taken place so far was held on the same day, in the South Oxfordshire town of Thame, and we have another quite different scenario.  For Thame’s NDP was a direct response to the core strategy in South Oxfordshire’s local plan, which proposed to allocate 600 homes on one large site on the outskirts of the town, rather than, as many residents seemingly preferred, on developable sites within the town itself.

The district council, to its credit, backed Thame Town Council’s bid for government funding to produce its own NDP, on the understanding that it could cover only non-strategic issues and not, for instance, the numbers of proposed homes. Advised by professional urban designers, the town council consulted with residents, identified more than enough potential sites, and eventually agreed on a ‘Walkable Thame’ option, the condition of which is that new homes should be within walking distance of Thame town centre.

In the May referendum it was approved by a more than 3 to 1 majority on a nearly 40% turnout. As the local media justifiably boasted, Thame residents had become the first in England to pick their own housing sites through a neighbourhood plan.

Three more referendums are currently lined up, but this is a trickle with the potential to become a flood. There are now well over 600 recognised Neighbourhood Planning Areas, and Ministers claim that over half of English local authorities are working with groups on community planning, many of whom are receiving government grant funding to help them prepare draft plans.

It’s far too early to draw any serious conclusions – as to whether neighbourhood planning will constitute a quiet revolution or anything else. But one almost instant criticism of NDPs, raised also by Nancy Holman in her references to NIMBYism, was that they would appeal most to parish and town councils in relatively less deprived rural areas in the already over-heated south-east.

It may well prove to be true, but the four very disparate Plans to have come almost arbitrarily to referendum so far offer little support.

game

Chris Game is a Visiting Lecturer at INLOGOV interested in the politics of local government; local elections, electoral reform and other electoral behaviour; party politics; political leadership and management; member-officer relations; central-local relations; use of consumer and opinion research in local government; the modernisation agenda and the implementation of executive local government.

Innovation in social care: it’s the how as much as the what

/ inlogov / 1 Comment

Catherine Needham

People with personal budgets need to have something to buy. For some people the money will be spent on a personal assistant. But there will be lots of people who don’t have a big enough budget to employ someone, or don’t want to take on employer responsibilities. For them a more attractive option may be to buy some support from within the community. What budget-holders probably don’t have in mind is buying care slots from a big domiciliary care agency employing a high turnover workforce on zero hour contracts, replicating the local authority offer. The transformational stories that have spread about personal budgets have been based on people thinking much more creatively about the kinds of choices that budget-holders might want to make. Of course some people might want short visits from agency carers; plenty of self-funders already opt for that. But local commissioners of care services, particularly as they become market-shapers, need to ensure that 15 minute services aren’t simply chosen because there is nothing else to buy or nothing else that can be afforded.

One way to get more cost-effective and innovative services could be for commissioners to stimulate the growth of micro-providers: very small local care providers who keep costs low through minimal bureaucracy but who can find innovative ways to offer support. The Putting People First consortium has endorsed these micro-enterprises (employing 5 people or fewer) as a key element of the move to personalisation: ‘Micro social care and support enterprises established and managed by local people are in a good position to deliver individualised services and are vital elements of a diverse market’.

But is it true that very small organisations are more innovative and cost-effective than larger ones? The University of Birmingham is leading a project to evaluate the contribution that these micro enterprises make, testing if they outperform larger care providers in delivering services to users that are valued; innovative; personalised and cost-effective. We will be speaking to people who use services, and to carers, in micro, small, medium and large care providers, as well as to the providers themselves and the local authorities in which they are based.

The existing literature on scale and innovation is ambiguous: small organisations can be more versatile and lean, intimately knowing their customer-base and innovating quickly. On the other hand, large organisations have the inhouse expertise and the financial security to be experimental, utilising economies of scale. However existing studies have rarely looked at micro-providers (with 5 or fewer staff), as opposed to small organisations (classed as having 6-25 staff). Micro organisations may magnify the benefits of smallness, providing very personalised support to just a few people, and drawing on the ‘natural networks’ of the community to keep costs low. However micros may be more fragile than small providers, heavily dependent on one or two staff, and unable to participate in local tendering processes that are more accessible for small organisations.

A central issue for the research team is the extent to which micro-enterprises can become a new core offering for social care, or whether they offer creativity at the margins, for people who have the resources or imagination to step outside the domiciliary or residential mainstream. This links to the question of what kind of innovation is on offer from micro-providers: is it a what innovation, i.e. a new kind of support. Or is a how innovation: delivering ostensibly traditional services such as residential and domiciliary care in more personalised ways, being better attuned to what kind of support is being asked for, and developing more relational forms of support which utilise the assets of those being supported.

Some of the micro-enterprises supported by the national body Community Catalysts are very much offering what innovations. There is no obvious ‘old world’ equivalent of an animal-human therapy service or a bike-powered smoothie business, just two of the diverse services which Community Catalysts helped to get started. What innovations hit the headlines and help to generate excitement about how personalisation can break the mould of social care service-land. However it is the scope for process-based how innovations that constitute the most radical challenge to the mainstream of social care. People will continue to need help getting out of bed, getting washed and dressed; for some people residential care will continue to be the best place to get this support. If micro-enterprises are an affordable way to get the personalised, responsive, dignified,  domiciliary and residential support that we would all wish for our families, that will be a radical finding from the project.

For more details about the project please see the website or contact Catherine directly.

Catherine Needham is Reader in Public Policy and Public Management at the Health Services Management Centre, University of Birmingham, and is developing research around public service reform and policy innovation. Her recent work has focused on co-production and personalization, examining how those approaches are interpreted and applied in frontline practice. Her most recent book, published by the Policy Press in 2011, is entitled, Personalising Public Services: Understanding the Personalisation Narrative. Follow Catherine on Twitter: @DrCNeedham.

Planning and the new (new) localism – what chance of success?

/ inlogov / 2 Comments

Nancy Holman

Planning in a time of austerity is never easy – budgets are cut, needs are great and regulation can be seen as stifling growth.  In England we are in just such a position and in the midst of a reformulation of planning that is on the one hand meant to deliver growth and on the other designed to empower communities. Most of these reforms are being couched in the language of localism with community participation at the forefront of policy.

However, these reforms raise a series of questions that have yet to be answered: Who will get involved in local planning? Will localism foster increased NIMBYism? And most importantly, can the localism agenda actually engender action toward policy implementation? My article, co-authored with Yvonne Rydin, examines these dilemmas through the lens of social capital and offers key insights into this latest governmental foray into local social relations.

Who will get involved?

The Localism Act provides communities with an opportunity to come together and formulate their own neighbourhood plans thereby shaping their locale.  Key to this is engaging people in sufficient, meaningful and constructive participation. Social capital suggests that this can be kindled when like-minded communities come together over locally salient issues thereby creating networks of mutual trust and reciprocity.  However, this scenario is not without problems as in order for it to work communities must believe that the benefits of participation are not offset by the opportunity costs of participating. In addition, the strong ties of bonding social capital that emerge from participative exercises can in turn foster more insular and exclusionary localities outweighing any strategic benefits to greater community involvement.

Will localism foster NIMBYism?

Even if the localism agenda fosters communities burgeoning with social capital and a zeal for participation, a real fear, from the government’s perspective, is that these communities will be those best able to resist growth, which runs counter to the Coalition’s aspiration for localist planning.  Countless studies, from the location of mobile homes in post-Katrina New Orleans to LULUs (Locally Unwanted Land Uses) in Japan, have shown that strong social capital is associated with heightened abilities to avoid unwanted development.  Whilst the government has put in place a number of measures like the New Homes Bonus to incentivise local communities to grow the jury is still out on how well this will work.

Will the agenda actually engender policy action?

As the old adage goes, “Almost anyone can write a plan, the difficult part is putting into action”. Critically, there is nothing in the new system of Neighbourhood Plans that makes them more proactive and action oriented in terms of bringing land and development forward to achieve plan outcomes. Here, social capital tells us that, if communities wish to see their plans implemented they must situate themselves in networks that extend beyond local bonding ties into a bracing matrix tailored to the needs of the development activity so that they may access additional resources and investments.  This means that there is scope to ‘shape’ networks to deliver more effective planning.

So, what might be the outcomes of government reform?  As it stands, the rhetoric of localism is in danger of delivering only failed promises and thwarted desires for local communities.  However, planners could regain a key role under the new agenda by focussing on how they could actively build the networks of specific forms of social capital needed to achieve participation, frame localist planning in broader terms by injecting much needed planning skills into the neighbourhood planning exercise, and deliver development that meets community needs by considering the necessary resources and engaging with those who have the power to deliver such change.

A full account of this research is available in my recent article with Yvonne Rydin: ‘What can social capital tell us about planning under localism?’ Local Government Studies. 39 (1), 79-88.

holman

Nancy Holman is the Director of Planning Studies at the London School of Economics and Political Science. Her work deals primarily with issues of governance and local planning including sustainable development, heritage conservation and community participation. She has often used social network analysis to explore the complex relationships in the multi-level, multi-actor partnerships present in modern governing arrangements.

Could a lack of trust between professionals undermine health and social care integration?

/ inlogov / Leave a comment

Catherine Mangan

The latest guidance on the health and social care integration transformation fund emphasises the need for ‘genuine commitment to partnership and recognition of the challenges’ to ensure success. We all know that successful integration will rely on genuine, positive relationships between health and social care professionals in the system. But are we taking these positive relationships for granted?

The early findings from iMPOWER’s Home Truths programme suggests that we are, and that we face some fundamental challenges around levels of understanding, and, ultimately, levels of trust between professionals in the health and social care sectors.

The original Home Truths report was published in September 2012 and suggested that GPs were inflating demand for residential care because they didn’t understand the alternatives and that by failing to address this issue, local authorities were failing to manage demand for residential care. Since then, six geographical areas have been working with iMPOWER to explore these issues further, with the University of Birmingham acting as a critical friend.  The sites have conducted surveys of GPs and older people, interviews and data analysis; culminating in an action plan. This week sees the launch of the interim evaluation report on the work of the six sites. The initial findings make for interesting, albeit uncomfortable reading:

  • Over half of GPs rated their relationship with adult social care as poor or unsatisfactory. 41% of GPs felt they could make a better assessment than social workers about a patient’s need for residential care.
  • On a more positive note, 92% of GPs wanted closer links with Adult Social Care staff to better understand local service offers and 76% of GPs said they could be helped to do more to intervene earlier to delay or avoid the need for residential care admissions.  A third of GPs felt that at least some of their patients who had gone into residential care had been admitted before they needed to be.
  • GPs lack knowledge and understanding about social care and prevention type services. Half of GPs who took part in the surveys knew nothing about telecare services (even though they were available in their area), whilst a third knew nothing about the available exercise classes or social support networks. Even where GPs do know about social care services there is a strong perception that these services are not good quality.

Sites also discovered that GPs have a significant influence on older people’s decision-making about care options, with the survey of older people showing that after family, most older people would turn to their GP for advice.  This is perhaps made even more significant by the finding that older people don’t pre- plan their entry into residential care, so may be turning to GPs in a moment of crisis.

For the sites these findings made difficult reading, but most of those involved admitted they had a ‘gut feeling’ about the problems. They have started to address the issues by developing a variety of approaches which aim to:

  • Improve communication about social care referrals
  • Improve access to information about social care services
  • Train GPs and consultants about social care services and processes
  • Embed joint working between social workers and GPs
  • Influence the influencers of older people’s decisions about care

For the sites involved, the Home Truths programme has acted a useful catalyst and provided a focus around which health and social care professionals can begin to converge. The work has acted as a first step in understanding and addressing the relational challenges of integration that lie ahead.

We suggest that all Health and Well Being Boards would benefit from thinking about how these issues might apply within their health and social care systems and ensure that alongside structural plans for integration, fundamental issues around trust and understanding are recognised and addressed.

The Home Truths evaluation report will be launched today at the NCAS conference #ncas and will be available at www.impower.co.uk.

Portrait of OPM staff member

Catherine Mangan is a Senior Fellow at INLOGOV.  Her interests include public sector re-design, outcomes based commissioning and behaviour change.  Prior to joining INLOGOV she managed the organisational development and change work for a not-for-profit consultancy, specialising in supporting local government; and has also worked for the Local Government Association, and as Deputy Director of the County Councils Network.  She specialises in adult social care, children’s services and partnerships.