UK Local Authorities and Shared Services: Cost-Cutting – Myths, Realities and Escalating Risks? Response – Addressing the Social and Political Context with Radical Reform/ Transformation

United Kingdom

Image by stumayhew via Flickr

I am responding to Alf Oldman’s article on the risks in Local Authorities implementing shared services. Whilst I broadly agree with the points on risks, I should like to explore the underlying social and political context facing Local Authorities, concluding with some radical suggestions for reform and transformation. The following paragraphs represent my own views and opinions. I respect that there are other perspectives and would welcome open and constructive debate.

Local Authorities throughout the UK face an increasing challenge to deliver satisfactory levels of legally mandated services within smaller cash envelopes imposed by the Central Government. They also need to address the growing “elephant in the room” at county council level of  Adult Social Care costs, which even in wealthy counties with high levels of employment, like Cambridgeshire, is reaching 55% of total council budgets, leaving the remaining budget for all other service directorates and service delivery.

To put these costs into context, they are being driven by factors that councils and their employees traditionally know very little about, but which are well-known to insurance companies, actuaries, medical general practitioners,  nutritionists and dietitians. Some of these are as follows:

  • Increased longevity, particularly amongst woman aged over the age of sixty-five
  • Increased morbidity amongst woman over the age of sixty-five, with the bulk of complex morbidity compressed into the latter years’ of life
  • Obesity amongst socio-economic groups CI, C2, D and E to the point where our woman are the most obese in Western Europe and our men the fourth most obese
  • One million dementia sufferers in the UK, with causes ranging from living under aircraft flight paths (antimony in aircraft fuel), drinking from aluminium cans and cooking from aluminium saucepans, to long-term damage created by cannabis smoked during youth
  • 40% vitamin D deficiency amongst the general population, caused by poor diet, insufficient exposure to sunlight and drinking alcohol on an empty stomach
  • Insufficient exercise in middle age, leading to a poor range of movement later
  • Widening financial inequality, with 80% of people with bank accounts holding less than £500 (GBP) in them at any one time (Source: GE Money)
  • High unemployment and incapacity levels, with the Joseph Rowntree Foundation calculating that out of a total workforce of 31.5 million some 11.5 million were not employed in 2008 and the true figures today are even worse.

What is to be Done?

Councils have tried shared service centres, conventional UK-based outsourcing, transformation, business process reorganization (BPR), burden-sharing with the emergency services, bigger call centres, the limited use of customer relationship management (CRM), mobile and flexible working, virtualization and home working under the auspices of Project Nomad, restructuring and the application of Lean and John Seddon style “Systems Thinking“.

So Far Very Little of it has Worked – Why?

Whilst there are risks to be considered,  the thinking has been far too timid, too little and too late, as events are moving much faster than typical Local Government thinking which has yet to move beyond the concept of providing legally mandated services, irrespective of where the money will come from and the “not invented here syndrome”.

Apart from the Public Sector trades unions and their restrictive practices, TUPE and an unwillingness to benchmark UK Local Authorities with models working efficiently in other countries is stifling debate and change, whilst too many “identikit” local government officers display anti-business attitudes and impede Private Sector employment growth through the planning system.

What Needs to be Done?

I would advocate radical restructuring at national level (preferably guided by experienced and capable independent executives) with the following policy objectives as a strawman proposal:

  • English shire counties reduced to twelve in number and all districts and boroughs abolished, with their functions subsumed into the enlarged structures with shared service centres and offshoring of non core functions
  • Variable taxes on food (penalizing junk-food) and a joined up effort on diet, exercise and health on a proactive basis
  • Using robots in care homes, like the Japanese, and considering transferring elderly Adult Social Care recipients to India, whose Government has offered to fulfil this role many times
  • Curtailing the influence of the public sector trades unions, perhaps with greater localization and Big Society
  • Reforming TUPE leglislation
  • Applying best-in-breed target operating models to those local authorities which remain, culling unnecessary and unqualified labour, starting with chief executives, strictly enforcing headcount limits within each department, severely rationalizing grading structures and promoting best practices in operational flexibility and customer service.

John A Gelmini

Head of Strategy and Transformation (Local Government)