Funding social care – finding a solution now

Local government chief executives are often too cautious about advocating solutions. I know this from over forty years of local, regional and national activity.

There are many good reasons for this concern; public awareness, political sensitivity and an appreciation of operational reality amongst it all. We simply let too many people down if we make unrealistic claims that cannot be delivered.

There is a great deal going for us in expressing confidence and backing our judgement. Executive managers in local government succeed in solving complex problems in a democratically accountable system with the media spotlight trained on them. There is always room for improvement, but resources are used more effectively to achieve better outcomes when compared to other parts of the public sector.

Now is the time for local government to be more assertive at securing sufficient funding for social care. Everyone understands the problem and demographics alone make the case compelling, but we are yet to find an adequate solution.

The government is concerned about the implications of an age of shrinking public finance and councils grapple with the level of demand and its affect on service performance. Those in need and their families worry about service availability and how much they will be expected to contribute.

I believe that there are two ways in which we can shift the focus of this debate now. The first is to ensure that existing resources are used as effectively as possible. We are well practiced in optimising efficiency measures in transactions, tax collection and the payment of benefits for instance, but are far too cautious at applying this knowledge to ‘personal’ services.

I am a social worker so am familiar with the arguments about finding bespoke responses to individual needs. However, better decisions will result from assembling good data, creating clear and reliable processes and streamlining work flows. A consistent performance will both ensure that individual decisions are more reliable and certify that any slack in the system has been addressed.

My second suggestion would be to advocate a long term solution in robust terms. There is a remarkable consensus about the policy direction and resource requirements between the government, political parties, the Local Government Association, professional associations, service providers and consumer groups. Yet, comprehensive funding decisions get kicked into the long grass, at best. The outcome of the next spending review will be followed by a general election campaign, meaning any outcome may not be clear until 2015/16 at the earliest. Meanwhile, the difficulties will increase and some parts of the care system will be unsustainable.

It is accepted generally that the NHS, and to some extent schools, should be protected from public spending cuts. Arguably local government has taken the deepest cuts in recent years, partly because of its competence in implementing them whilst protecting services as far as possible. Ultimately this impasse will be solved by investing in health and wellbeing rather than ill health, which means shifting resources to social care in the community. This is not ‘robbing Peter to pay Paul’ but using available resources more effectively to improve quality of life. Now is the time to be brave enough to say so.

 John Ransford, Advisor of CapacityGRID and former Chief Executive of the Local Government Association (LGA).

 

 

 

A seasonal message – help yourself!

The political party conference season has confirmed what we all knew already. The economy is not recovering as was hoped, private sector growth is the government’s route to future prosperity and the public sector will shrink further over the next few years.  Whatever the rhetoric of the political parties, the message is strangely consistent – there are no easy answers and the current public spending plans will not get better.

It is little use to look at how we came to this position and even less use for us to focus on whose fault it was. We now need to identify and work on solutions to the position we face. While this is a national problem, it is equally one for each and every local authority as they have to deliver services to the public, knowing that they will have rising cost pressures and fewer resources. Stopping doing things altogether may be an option but where it is not, a systematic review of performance is required.

The process for cost reduction is simple:

1.       Know how your services are performing – not just against last year but against others.
2.       Re-engineer your services to match the “best of breed,” getting help if it is needed to boost short run skills gaps.
3.       If you have done all you can, benchmark again.

And then if more is needed:

4.       Look at other offers and other providers – balancing certainty, cost and speed.

Many will look at the option of increasing income too. Increases in fees and charges are part of but not the total answer and new forms of income are hard to find. Trading with others can offer those authorities that perform well a boost in income to mop up excess labour capacity with the added benefit of avoiding redundancy costs. But not everyone can be a supplier. Trading requires some to offer work and others to provide it.  It requires a simple and cheap way to an internal market.  It means inevitably that the sector’s overall costs and labour force will shrink.

The Audit Commission has gone and few lament its passing but as a former Chief Executive, it did provide me with information on performance and best practice. Benchmarking data with peer authorities was, and still is, a vital tool as efficiency is taken to new levels. CIPFA statistics are a substitute but are not truly trusted as a tool.

CapacityGRID has emerged as a self-help product in the sector for those that are facing these issues and are looking for a new solution with guaranteed results in a very short timescale. The concept is simple. Work is organised to improve productivity and enable trading. The resulting capacity release is banked or sold. Like-for-like operational data is available to everyone so authorities can truly compare their own performance with others. It can deliver information on where the big prizes lie for performance improvement or alternative provision. Internal transformation can be complemented by using the GRID as a risk mitigation tool.  Too often performance problems arise in major change programmes, creating temporary peaks in workload. Those on the GRID can trade at defined costs and performance levels to alleviate those issues. It offers a simple spot purchase opportunity compared with a long and costly procurement exercise.

What is more is the fact that authorities are not restricted to a single supplier with locked in price rises but can operate in a real time dynamic environment, limited only by those that are active in trading on the GRID. As numbers increase, choice of provider and service will become even better.  It can also be an answer on a longer term basis as a permanent way of doing business. Further efficiencies will inevitably accrue as contingency staffing capacity in each individual authority is replaced by a virtual contingency across the GRID, and further resilience is underpinned by a provider network from the private sector platform.

Local authorities can help themselves but they must now help each other.  If not, then they should look to others. Outsourcing still has a place but it is no longer the only game in town and big deals are very thin on the ground. For too long we have talked of the sector being its own solution and now is the time to make it happen.

Sir Peter Rogers
Chair of CapacityGRID and former Advisor to Boris Johnson for Regeneration, Growth and Enterprise at the Greater London Authority.

A budget round like no other

Sir Peter Rogers

The worst summer for weather has strangely produced a feeling of euphoria throughout the country because of the Olympics and the achievements of our British athletes.

However, now that summer is over, reality has resumed as local authority Chief Executives and their management teams take stock of the difficulties facing them. Last year’s financial results are finalised and with half a year over, they will know whether their ambitious plans they hatched 12 months ago are on track. Directors of Finance will be able to judge their ability to balance the books over the medium term and appreciate the effects on the budget of maintaining standards and dealing with increasing demographic pressures.

As Wilkins Micawber in Charles Dickens’s ‘David Copperfield’ pointed out:  “The ability to match expenditure and income is the only true path to happiness.”

It is natural that local authority leaders will try to protect the front line services which get them elected. Local authority Chief Executives will also endeavour to protect the standards of service that they have worked so hard to deliver.  But what is inevitable is that with the rising cost pressures of an aging population and the ever-increasing expectations of an impatient public, new ways of working will be required to enable those services to get the resources they need.

This is a time for visible leadership. It may even be too late for those Chief Executives who are yet to make the changes they require. A blind faith in central government coming to the rescue or a reliance on the sector to produce a magic solution will inevitably lead to disappointment.

Rather, this is a time for local authorities to be clear on their ambitions and their ability to fund them.  Difficult choices will have to be made and those things taken for granted may need to stop, or be done by others.  Therefore, any opportunity needs to be considered on the basis of what it produces and how long it will take to deliver results.

Local authorities can help each other but the third and private sectors offer opportunities too. Knowing best practise and how to learn and adapt is a new skill set but needs to be learnt quickly within local government. It increases the probability of success, it reduces risk and it speeds up results. It is even better if public and private partners are able to avoid the pitfalls of drawn out procurement exercises where the only parties guaranteed to win are the external advisers whose fees are guaranteed irrespective of the outcome.

Nothing can be regarded as sacred but this is a time when a council’s management team needs to be exactly that; a team that gives where it can to help others deliver what otherwise would be lost.

Corporate shroud waving and warnings of disaster have been widely experienced in the past but cannot be tolerated going forward. Instead there must be an increasing recognition that services can be delivered better internally or by others. It may be that alternative delivery structures within groups of local authorities can offer the step change in costs that is needed.

A ‘summer like no other’ followed by a budget round with a similar description will test the local government sector. Plans will be made and budgets will be created but that is just the start. The plans for their delivery will need to be robust and the risks of backsliding or failure, well managed. Council leaders and Chief Executives will need to be visible and articulate this new reality to their communities. Managing existing citizen expectations will be virtually impossible for many but setting new expectations to match and manage the new financial reality will be a real test of civic leadership.

Sir Peter Rogers

Chair of CapacityGRID and former Advisor to Boris Johnson for Regeneration, Growth and Enterprise at the Greater London Authority.

Prosperous Places: Leadership for a sustainable future

SUMMIT SCENESETTER

RICHARD VIZE

Yet again local government’s role is being reshaped by political and economic forces. As councils cut budgets and prepare to sink the knife still deeper, they are increasingly sharing and leveraging power rather than exerting control.

While direct power is flowing to organisations such as free schools, academies, clinical commissioning groups and police and crime commissioners, local government is at the centre of a network of influence. Local Enterprise Partnerships are the latest vehicle for collaboration with the private sector, City Deals bring together a wide range of local players and health and wellbeing boards tentatively extend local democratic oversight to the NHS.

Widespread public anger might have been expected about such deep cuts, but despite the occasional library occupation the reaction has generally been a sullen acceptance that things are going to be different.

Alongside cuts there is uncertainty – of the impact on councils and people of localising and cutting council tax benefit, the unpredictable gains from business rate reforms and, above all, the prospect of another severe cut in funding after the general election.

As the scale of the cuts became clear many predicted industrial scale reform of the way local government was run. So far the reality has been more prosaic. Few councillors want to risk frightening local voters with radical change, and Suffolk County Council has demonstrated the dangers of being bold.

Nonetheless, local government is gradually changing the way it works and leads.

Martin Reeves, chief executive of Coventry City Council and SOLACE senior vice president, believes the emphasis will increasingly be on working with the private sector, voluntary groups and others to meet local needs and build the conditions for economic growth, rather than the council looking to its own resources: “The leadership role is almost turning into a magnanimous letting go, because others are in a better position to deliver [than] us, and we lever that through our municipal power, which will always be there.

“In the past our leadership style has been very much about strength and power coming through wide and deep service delivery, as big employers and through our democratic mandate. Letting go means thinking that when it comes to delivering core services, when it comes to meeting the needs of our most vulnerable, it is about people doing more for themselves, about new community/social enterprise hybrids emerging, and the private sector delivering on economic prosperity.”

Jo Killian, chief executive of Essex County Council, says chief executives now have to “go beyond the language of partnership to become an expert at integrating services, and to help members understand that in some cases they may have to share power if they are to maintain services”.

This requires senior managers to develop their commercial skills and increasingly operate as collaborators, negotiators and coalition builders rather than traditional managers.

Reeves says: “We will have to ask senior officers to think about risk in a fundamentally different way. In the future officers will be paid to have different collaborative conversations with a range of people to work out different solutions, and admitting we may not always know the right thing to do. That is a big ask.”

Reeves believes SOLACE and other professional organisations need to take a lead in driving this new approach: “There are still a number of our professional colleagues who we need to ask tough questions of, who still hide behind risk profiles and will not necessarily lead but revert to managing. [They] safeguard the status quo rather than do something very different.

“We are trying to shift a whole organisational blueprint and workforce development ethos. SOLACE needs to grasp that in conversations with other professional bodies, because if we ignore it we will go backwards.”

Local government has spelt out the consequences of funding cuts and rising demand for social care. But councils cannot afford the luxury of shroud-waving; it is up to them to make the best of it.

“Saying ‘woe is me this is all terrible’ is just self-indulgent. We are merchants in optimism,” says Derek Myers, chief executive of Kensington and Chelsea and Hammersmith and Fulham councils.

“This is a huge leadership task, which means it has never been more important for us to show leadership capacity.”

He believes councillors and senior officers need to focus their staff on opportunities such as public health and promoting growth.

Terry Huggins, SOLACE president and chief executive of Breckland and South Holland councils, agrees: “Because of our role in the local economy and the cohesion and vibrancy of the area, you don’t find local government peddling doom and gloom. You focus on the possibilities.”

Skills shortages are one the of the biggest blocks to growth. Essex shows how local government works through others to make a difference, using its community budget to get government departments to allow businesses to commission the skills they need. “It cannot be right that in Basildon 500 hairdressers were trained for 10 jobs when local businesses want a thousand engineers and they are having to go to Scotland and Europe to get them,” Killian says.

A decade ago local government was on the road of centrally prescribed improvement. Best value, performance indicators and the Audit Commission saw councils converge towards norms of “best practice”, often adopting similar approaches such as outsourcing routine processes.

Now councils are becoming more diverse. Contracting out continues but services are also coming back in house while a few are being run by staff mutuals, social enterprises and the voluntary sector. Some councils are sharing operations such as council tax collection, others are sharing management teams. Some are beginning to share resources with clinical commissioning groups and other public sector partners.

Myers describes this diversity as “healthy but slightly chaotic”, and points out that, inevitably, some of these ideas will fail.

Meanwhile chief executives, both collectively and individually, have been exposed to unprecedented scrutiny. Salaries are dropping in the face of political pressure, both district and single tier councils have been sharing their chiefs and some posts have been abolished.

It is tempting to see the abolitions and mergers as a profound change, but it is more realistic to note the durability of the chief executive role. The rare occasions where the post has been abolished often seem more related to local conditions and relationships than the emergence of new models of political leadership.

Myers – who along with Graham Farrant at Thurrock and Barking and Dagenham is one of the two people running two single tier councils – says: “It is worth experimenting but I don’t think it is true to say [these developments are] epoch changing. It turns on a particular set of circumstances, and I see it in the spirit of finding local solutions.”

Huggins foresees more radical changes: “I see the possibility of some chief executives managing more than two local authorities and it is not beyond belief that some will take themselves out of the public sector and do an outsourced management arrangement – if I was a slightly younger man I would be tempted to take my team and say ‘how about forming ourselves into a company and floating ourselves off?’ Someone will do that.”

Huggins sees continuing belief among politicians in the benefits of chief executive leadership: “You have a breed of politicians with an understanding for what [the chief executive] brings to the party. They realise that if they have large policy aspirations you need a breed of senior manager to help them deliver that.”

Killian highlights the threat to effective governance from abolishing the chief executive post: “It is an irony to me that in the banking and financial sector the focus on corporate governance is incredibly strong and the delineation of role between chairman and chief executive – proper governance – is seen as imperative now. It seems curious to me that the same logic is not being applied into places where big decisions are being made, lives changed.”

Huggins – expressing what he accepts is a minority view – believes it is time to examine whether to scrap the dual role of the chief executive as the senior policy adviser to the leader while working for the interests of the entire council: “It would be worth experimenting with running chief executive appointments concurrent with leader appointments.”

He is comfortable with a more American model, where there is greater churn of chief executives as the political winds change; the monitoring officer would take on the governance functions.

He detects a change in the way chief executives are managing their relationship with the leader, adopting a lower public profile. This amounts to “not arguing over that ground and releasing it to the political leaders”.

There is anecdotal evidence of an increasing number of directors not wanting to go for the top job, seeing the declining rewards as poor recompense for the pressures and risk of public attack.

“But there is not a crisis,” says Huggins. “There are still people who are masochists like me and will take the downsides because it is such a fantastic job.”