West Midlands’ “Independence Day”?

Catherine Staite & Jason Lowther

With the dust nowhere near settling from the fallout of last month’s national referendum on membership of the EU, some English regions are following Scotland’s lead in demanding greater autonomy. London’s new mayor, Sadiq Khan, is looking for the devolution of fiscal responsibility, including tax raising powers, as well as more control over business and skills, housing and planning, transport, health and policing and criminal justice.

West Midlands residents are now being asked for their views on a new elected mayor for the region’s Combined Authority.

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Time for an end to parent/child relationship with central government and sibling rivalry between local authorities

Catherine Staite, Director of INLOGOV

It is universally recognized that England has the most centralised government in the western world. This is the result of many years of effort on the part of successive Conservative, Labour and Coalition governments. Motivations have varied between different governments but some key drivers have operated for the past 30 years.

Ideologically motivated governments don’t like power to rest with anyone they can’t control, including other parties or dissident factions within their own party. Even when the centralising motivations are more benign, for example, the avoidance of ‘postcode lotteries’, the results are rarely better.

Self-belief trumps evidence and makes governments vulnerable to airport book management gurus. For example, ‘Nudge’ theory is not the magic key to changed behaviour and reduced demand for public services.  There is a wealth of evidence about how a variety of approaches, applied coherently and intelligently, can have a significant and lasting impact on behaviour. To understand that, politicians would either need to read more than one book on their holidays or commission some research.

Centralisation creates a trap for central government because, by controlling so many aspects of local services, they set themselves up to fail. If they claim the ability to solve all ills, they become responsible for all ills. Central governments make disastrous micromanagers in spite of misplaced confidence in their superior intellect and technocratic abilities. They may take a helicopter view of a complex system and believe that by tinkering with one part of the system they can resolve all the problems within the system. The result is inevitable; a myriad of unintended consequences that then drive more centralized tinkering.   The numerous attempts to integrate health and social care demonstrate how helicopter-height theory doesn’t survive contact with ground-level cultural, professional and financial realities.

Centralisation disempowers local government and reduces its ability to work innovatively and creatively with the wider local public sector, business and community partners. The apparent empowerment, purportedly offered by policy or statute, is continually undermined by the constraints of the parent/child relationship characterised by regulation (‘my house, my rules’) as well as messy and inequitable funding arrangements (‘no you may not have more pocket money’).

But are these long established patterns of structural, functional and psychological centralization about to change? Talk of devolution and financial independence may lead you to think so – but think again. The underpinning relationship is still parent/child, as highlighted recently by Analysis on Radio 4 .

Now, some local authorities are making matters worse by demonstrating plenty of dysfunctional behaviour of their own, in the form of sibling rivalry. The mantra, ‘its not fair’ is used by many local politicians – about the actions of the county, the neighbouring unitary or by the next door district. True, there is plenty of unfairness built into the system but there is no hope of resolving that while different parts of the sector are engaged in internecine battles that only result in more inequity, more vitriol and more hostile takeover bids driven by more by narrow interests than the creation of public value.

Many local authorities do demonstrate heroic and commendable behavior, collaborating and supporting each other. Even the best of them find it hard going in the face of so many systemic challenges. Local government is too complicated. There are too many local authorities, capacity is spread too thinly and the costs of democracy are too high. Piecemeal tinkering, in the form of small-scale reorganizations, minor changes to functions and governance, spin-offs and bolt-ons, have only made matters worse. This has been going on for so long that everyone now takes it all for granted – but it’s not inevitable. Some grown up actions would put local government on the road to adulthood and more in control of it’s own destiny.

  • Establish a cross party commission to review all the key drivers for financial and structural change in local government. Perhaps the LGA, SOLACE and CIPFA could work together to set up a commission.
  • Agree Terms of Reference – ideally to be driven by evidence and the public good and as bold, radical and creative in their recommendations as possible, to;
    • Design a new geography – that combines economies of scope and scale with recognizable places. It won’t be perfect because there are always borderlands but it will at least be underpinned by some design principles, as opposed to the current system which is the creature of a series of historical constructs and the intermittent application of political whims.
    • Design a new geometry – that enables local authorities to have much greater impact on all the ‘wicked’ issues – from low educational attainment to obesity – which are at the root of many of the relentless and unsustainable pressures on public services. This geometry could include flexible, integrated governance arrangements, ranging from large clusters of councils tackling the infrastructure challenges (let’s call them Combined Authorities), to neighbourhood level engagement which co-produces solutions to local issues.
    • Design a new funding model – with a system of income generation and redistribution, that combines maximum autonomy with maximum equity, agreed and managed by local government for local government.

If we do what we’ve always done, we’ll get what we’ve always got – a messy, sub-optimal system of local government riven by in-fighting and self-interest. If local government continues to divide itself, it will always be ruled by others.

 

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.

Local Government Studies – virtual special issue on budgeting

Alison Gardner & Vivien Lowndes

Anyone following the news over the last nine months might be forgiven for thinking that the UK’s relationship with austerity had taken a rollercoaster ride.  In June 2015, George Osborne told central government departments to plan for 25-40% spending cuts, citing his aim for the UK to become ‘a country that lives within its means’.  His ‘fiscal charter’ signalled a departure from a historic reliance on government borrowing financed through economic growth, towards an aspiration to consistently deliver a budget surplus from 2019-20 onwards.  Then in the 2015 autumn statement and Comprehensive Spending Review, forecast cuts to many departments were mitigated, prompting parts of the press to herald an ‘end to austerity’.  Nonetheless Osborne has since been keen to emphasise ongoing threats within the global economy, arguing that austerity remains a necessity.

From the point of view of English local authorities, continuing austerity – including a reduction in central grant funding of 60% – has been balanced against a ‘devolution revolution’: a promise of increased powers and fiscal autonomy for councils that are prepared to join together to create ‘combined authorities’ reflecting  ‘functional economic geography’.   For some local government advocates, devolution represents a long-sought opportunity for the sector to break free from Whitehall’s straightjacket of fiscal control.  However, from a critical perspective, devolution may also represent a diversion:  a convenient sleight of hand that allows the government to disavow responsibility for underfunded local services, whilst breaking Labour’s urban power base in the cities, and increasing central leverage over core areas of policy.

Our new article ‘Local Governance under the Conservatives: Super Austerity, Devolution and the Smarter State’ argues that – despite reports of a ‘flat’ comprehensive spending review funding settlement –  local government is in fact entering a period of super-austerity, underpinned by a consistent trajectory towards reducing the size of the local state.  Cuts, such as the recently announced 6.7% real terms reduction in spending power, are downplayed or obfuscated, while assumptions of growth in local sources of income will be realised unequally.  Under the Coalition government , spending cuts impacted most severely upon the poorest localities, and (despite recent changes to the DCLG grant funding formula)  future funding reductions – as well as unequal opportunities to raise income – threaten  to reinforce a distinctive geography of austerity with deepening  spatial inequalities.

Optimists point to the opportunities of devolution, reform and efficiency.  Devolution has gathered cross-party parliamentary support, and large cities such as Manchester have been keen to be at the forefront of governance innovations such as combined authorities, and devolved health spending.  Proposals to localise business rates, and allow (limited) flexibility to elected mayors in increasing council tax have also been welcomed.  However, the economic benefits arising from devolution are uncertain and disputed, playing out unevenly and over the longer term, whilst spending cuts are front-loaded.   ‘Devolution’ also effectively provides for some key functions – such as economic development – to be centralised from local government to a new sub-regional level.

In addition, rather than emerging organically as a symbol of local confidence, devolution has in recent months been focussed on strategies to mitigate local deficits, driven forward under conditions of compromise and constraint.  Progress on creating combined authorities, initiated cautiously under the 2010-2015 Coalition, was rapidly accelerated by a Treasury invitation for all local authorities to submit ‘fiscally neutral’ devolution proposals in advance of the comprehensive spending review.  The summer of 2015 saw an unseemly scramble to submit hastily negotiated proposals, with some awkward alliances constructed under the threat of further spending cuts.  The Government has also insisted on directly elected mayors as a cornerstone to devolution deals, despite a rejection of the principle across many English cities in 2012, in a move that could potentially short-circuit existing local political structures, and diminish local democratic representation.

In relation to the wider public sector, David Cameron has outlined a vision for a “smarter state”, but proposals appear to rehash new public management principles, with relatively little focus on local government.    Most local authorities are already well advanced in implementing the reforms which the government describes, and multiple studies suggest that local authorities are reaching the limits of ‘efficiencies’.   Increasingly local communities are being called upon to construct their own safety nets.

In effect, the direction of local governance under the Conservatives appears to point towards a form of ‘roll-out’ neo-liberalism, signalling an active construction of an alternative and right wing model of the local state, in contrast to the deconstructive ‘roll back’ neoliberalism practiced by the Coalition.  Whilst this brave new world will create opportunities – especially for areas that are already prospering – prospects are less certain for areas without strong local economies.  This radical transformation also implies a technocratic transfer of power, taking place with minimal public engagement.

Dr Alison Gardner and Professor Vivien Lowndes have just published Local governance under the Conservatives: super-austerity, devolution and the ‘smarter state’ in Local Government Studies. You can get free access to the paper through the virtual special issue on local authority budgeting. 

 

Alison Gardner

Alison Gardner has recently completed a PhD at the University of Nottingham.  Her research interests include local responses to austerity, and the changing relationship between civil society and the local state.  She previously worked in policy roles with local authorities, the IDeA, Local Government Association and the civil service.

Vivien Lowndes photo

Vivien Lowndes is Professor of Public Policy at the Institute of Local Government Studies, University of Birmingham UK.  She has been researching institutional change in local governance for 25 years, including recently Why Institutions Matter (Palgrave 2013).  Current work looks at gender and institutional change and the impacts of migration.

Designing in Collaboration: Challenges for the new Combined Authorities

Max Lempriere and Vivien Lowndes

At a workshop hosted in December 2015 by City-REDI, INLOGOVThe Public Services Academy at the University of Birmingham 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 fifth of a series of posts Max Lempriere and Vivien Lowndes reflect on the day’s major talking points.

The raison d’être of Combined Authorities is to foster collaboration amongst neighbouring local authorities in a time of limited resources, fiscal restraint and ‘wicked issues’. The goal is to stimulate economic growth through better integrating transport, business support and skills development at the sub-regional level.  Alongside the growth agenda, combined authorities are considering their potential role in public service transformation, especially in relation to health and social care.  Combined authorities are also an opportunity to express local identities and challenge London-centric policymaking through, for example, the development of the Northern Powerhouse or Midlands Engine.

By pooling resources, local authorities can avoid duplication and, share staff, expertise and ideas – and risks. This kind of ‘public-public’ partnership can lay the groundwork for the Combined Authority, but collaboration needs to goes far wider to include a range of organisations from the public, private and civil society sectors.  Indeed, the three Local Enterprise Partnerships in the West Midlands will be full members of the new combined authority.  So it isn’t just the case that constituent local authorities need to collaborate. Indeed, the more diverse the range of organisations involved, the greater the potential in terms of gaining insight.   And engaging with civil society groups holds the promise not just of leveraging expertise and capacity, but also of enhancing citizen involvement in local decision making.  Since the Greater Manchester Combined Authority was given budgetary control over local NHS spending (February 2015), this has necessitated collaboration between local council leaders, health and social care providers, clinical commissioning groups, and a range of patient and community bodies.

There is considerable scope for local Universities to play an important collaborative role in the devolution agenda.  Supporting the new combined authorities will require bringing together those who create and apply knowledge within different sectors.  Universities can make available an evidence base to support economic development activities, but also to inform new collaborative governance arrangements themselves.  Universities themselves have a strong incentive to engage proactively in knowledge transfer, given the Treasury’s insistence that research must be able to show demonstrable ‘impact’.  Universities can also play an ‘honest broker’ role in convening opportunities among relevant parties, as is happening in the current move to establish a Midlands Engine to rival (or complement) the Northern Powerhouse.

Despite these opportunities, collaboration is deeply challenging. It requires the fostering of an environment in which the needs of the Combined Authority as a whole are put before those of individual local authorities. This is a difficult task, especially when organisations have been used to having executive sway over their own actions.   Rather than seeking ‘competitive advantage’, organisations need to focus on the potential gains from ‘collaborative advantage’.  In a nutshell, this offers individual organisations the chance to achieve outcomes that they wouldn’t have been able to accomplish on their own.  In fact, they may not even have thought of them!  The aim is not just to improve the delivery of existing services, but to re-imagine what local government might offer a locality through collaborative working.  Entirely new visions, and ways of working, could arise out of the process of collaboration.

New forms of leadership are important in fostering collaboration. Different skills and personal qualities are required, in comparison with leading a single organization.  Research shows that, whatever structures and procedures are put in place, it is often ‘special people’ who make the difference.  Such individuals may not be in the most senior positions, but they demonstrate the ability to bring different groups together, build trust and foster creativity, identify and harness the added value from collaboration, and maximize learning.  Typical personal skills are sociability, pragmatism, personal resilience and a sense of humour!  Collaboration is more than a list of email addresses or skype contacts.  Face-to-face contact and practical step-by-step objectives are crucial.  We all know these sorts of natural collaborators when we meet them.  Talent-spotting for these skills is an urgent task for councils considering secondments to the new combined authorities, or new collaborative roles at council level.  Nurturing new collaborative champions is a responsibility for all partners, as is ensuring that we all learn from those to whom collaboration comes more naturally.   We can’t create these ‘special people’, but we can foster environments in which they flourish – and are rewarded.  How many performance management agreements, or appraisal systems, take account of collaborative as well as organizational achievements?

While new directly elected mayors will head up the major combined authorities, and act as important points of accountability, they won’t provide a substitute for a network of committed ‘boundary spanners’ on the ground.  What they can do is provide the overall vision for their locality, providing a clear answer to the question: What is devolution for?  Mayors can also champion particular forms of collaborative behaviour that put the interests of the locality before that of any individual organization, and also prioritises engagement with residents, communities and local businesses.

Collaboration needs to be the DNA of the new combined authorities.  A commitment to collaboration needs to inform the design of all the new roles, structures and processes.   Collaboration needs to be designed-in from the start.  The goal should be the integration rather than the simple aggregation, of governance capacities within the locality.

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 Institute for Local Government Studies at the University of Birmingham. His research interests include institutional design, local government policy making, devolution, urban planning and sustainable development.

Vivien Lowndes photo

Professor Vivien Lowndes is involved in research, teaching and knowledge transfer on local governance and public services. She is particular interested in partnerships, citizen participation, and gender issues. Currently Vivien is working on the development of Combined Authorities in the context of devolution, local government responses to austerity, Police and Crime Commissioners’ gender policies, and the use of evidence in migration policy. With colleagues at INLOGOV, she is also engaged in comparative research analysing innovative governance institutions in the UK and Brazil.

INLOGOV-facilitated Hull Commission receives media, business and community endorsement for its final report

Daniel Goodwin, Senior Associate Fellow

The Hull Commission’s final report was published on 13th January 2016 and was widely reported in regional media. The independent Commission, which was facilitated by INLOGOV, said that a fresh joint approach to economic development and local government organisation is needed in Hull and the East Riding. It found that Hull and the East Riding are interconnected and should seek a fresh way forward together and that the two areas often pull in different directions when they should be managed as one system. A new outward looking approach is needed if the area as a whole is to make the most of the opportunities available from devolution and the Northern Powerhouse.

The Commission was asked to review the effects of the existing boundary on the city and sub-region. The existing boundary has the effect of making Hull look like a small city of 256,000, with up to 240,000 people and 2,700 businesses left out of the picture. Given the real size of its travel to work area and economy ‘Greater Hull’ should be considered as being a city of around 500,000. The boundary significantly skews not only statistics and the way the area is perceived but works against the ability of the city and sub-region to function effectively as a single economic unit.

One possible way forward would be to move the boundary further into the East Riding. However, the Commission took the view that this would be highly unpopular, could well make the remainder of the East Riding unviable and, in any case, is probably impossible under current Boundary Commission rules.

The Commission therefore concluded that the only logical solution to the boundary issue would be to merge the two local authorities. This would make it far easier to join up economic development and infrastructure strategies and develop more effective arrangements for health and social care commissioning. Furthermore, complete removal of the boundary would achieve a political balance and overcome some of the reasons behind public opposition to redrawing it. The Commission also noted the political realities that make this logical solution a probable non-starter in the immediate future, and the need to take account of the rapidly developing Government agenda on devolution and the Northern Powerhouse.

The Commission was required to consider ways in which local government in Hull and the East Riding might better meet the goals of being effective, efficient and accountable. The devolution agenda has moved very swiftly, yet Hull and the East Riding are still not part of devolved arrangements such as those in Greater Manchester and the Sheffield City Region, pooling expertise on growth and infrastructure, with greater powers to make positive change happen. The Commission considered that this must be urgently addressed.

Furthermore, with the Northern Powerhouse and Enterprise Zone developments in mind, the Commission believes that there is a powerful case for a Combined Authority based on the Humber, providing focus for the development of the economy, distribution networks, infrastructure and environmental matters centred on it. It found that political animosities have stood in the way of progress on this option in the recent past. If at all possible they should be addressed and the possibility of a Humber Combined Authority brought back onto the table. The Commission considered that that appropriate consultation with business and a full public debate would make it possible and reflected this in its recommendations.

The Commission heard that there is a possibility that Hull will become a partner, without the East Riding, in the West Yorkshire Combined Authority. It considered this to be a poor outcome because it neglects the economic significance of the Humber, leaves Hull as a small, junior partner and cements the boundary problem further. It also heard that the East Riding is in active discussions with North Yorkshire and York about a North Yorkshire Combined Authority. This would present a similarly poor outcome because it would take the “Greater Hull” business rates with it into a different pool, splitting the economic development and infrastructure planning further away from Hull. Given all the above, the Commission concluded that Hull and the East Riding must be managed as one system, not two. This would provide the area with a much more powerful voice in any Combined Authority arrangements. This view was endorsed by 30 leaders from business, public and community sectors who met to discuss the report. The group was very supportive of the Commission’s concern to support the economic opportunities of the Humber and to ensure that Hull and the East Riding stay together in any future devolved arrangements.

There was also concern not only that the area should in future look outward to the national and international stage but also that local community identity should be respected, whilst ensuring that the Humber develops positively for all who live work and study here.

There was real concern that Yorkshire as a whole is missing out by not coming to an agreement with government about future devolution arrangements. The group wanted local politicians to exhibit a greater sense of urgency and to work together to resolve a positive way forward.

Further information and links to sources may be found through the Commission’s pages on INLOGOV’s website at: http://www.birmingham.ac.uk/schools/government-society/departments/local-government-studies/research/hull-commission.aspx

 

Know your local Councillor Photographs - St Albans - May 2008

Daniel has worked in local government for over 30 years in a range of councils and was previously Executive Director of Finance and Policy at the Local Government Association and Chief Executive of St Albans City & District Council. He is an INLOGOV Senior Associate Fellow, contributing to thinking, learning and action in local leadership and services, the wider public sector and beyond. Daniel has a Masters in Public Administration from Warwick Business School and is also a Fellow of the Royal Society of Arts.

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.