As we near the Christmas period I have found myself reflecting on the challenges faced by Local Government once the dust of the local government finance settlement settles.
At the heart of the challenge seems to be a striking dichotomy; at the same time as local authorities are being asked to act more like the private sector the qualities that they most need are those most closely associated with the public sector.
To put it another way; as authorities move to become ‘commissioning’ bodies, set up trading accounts or join various forms of partnerships they are required to both embrace the ‘profit motive’ and at the same time enter into agreements with themselves and with other authorities that if they are to function properly rely to a certain extent on trust.
We’ve seen evidence of this in the last few weeks. One example relates to the aborted attempt to basically merge Camden and Islington Councils. As the excellent Flip Chart Fairy Tales blogged last week:
As if integrating organisations were not a big enough problem, councils would have the additional complication of still having to maintain two (or more) legal entities, together with their structures and elected representatives. Only an act of parliament can legally merge councils so any merger would always have a temporary feel, no matter how good the integration of operating structures and corporate cultures.
To put it another way; for this model to be successful the two authorities would have to trust each other not to do anything that would damage the others interests.
And, this rule of thumb doesn’t just apply to whole council mergers. Shared services are one of the themes of the day; from Eric Pickles down. These can vary in complexity but unless one council is willing to assume the full risk for the running of the service and the other is willing to treat them as an outsourced contractor every shared service relies on trust. Every time an ongoing issue comes up both authorities will have to work together to develop solutions that meet the needs of both authorities. Sometimes, that will even mean sacrificing the best interests of your own council for the greater good.
Internal business units and trading accounts require the same trust. The head of childrens services need to know that the HR, legal and finance teams that are now charging for their services will not be price gouging and trust that this new methodology will not end up costing their service more money.
To take it one step further, what about council spin outs or social enterprises? Staff will need to trust their management as they take the big step of leaving the local government tent? In turn the management will need to trust the local authority that the business to sustain this new model will be there at least in the short term.
And these are just a few small examples.
My experience is that as these new models and new ways of working develop there is actually a deficit of trust within the local authorities. Instead we have taken to developing ever more complex legal agreements with each authority, or service department, seeking to indemnify themselves against future circumstances and pass the risks, and costs, onto their local authority and public sector partners.
In other words they are acting more like private sector companies; forgetting that in terms of public services we are all in this together and that to move forward will require trust, co-operation and a recognition that risks, and rewards, need to be shared.
Indeed, this trust deficit also applies to central government and might be one of the reasons that we have yet to truly crack the community budget issue.