The London Borough of Barnet agreed earlier this month to examine proposals to shrink the council to a ‘strategic hub’, that will commission services from a joint venture vehicle, with services delivered by ‘service delivery vehicles’
Reconfiguration will create a three-tier council, with democratic accountability remaining only at the hub. Meanwhile, Essex County Council is planning an eight-year £5.4bn contract to outsource most services, which would be a mega-strategic partnership.
Barnet’s proposal is significant because “a pan public-sector strategic commissioning role is the key element in the future shape of the Council, both in achieving savings and enabling better outcomes. It will entail shrinking the Council to its strategic core and then working closely with those undertaking similar activities in LSP partner organisations, to commission services that will deliver the outcomes that the community needs.”
The ‘strategic’ council would be limited to collecting and analysing evidence on local needs, consulting residents, service users, staff, businesses and partners, setting outcomes, commissioning services and managing performance at a strategic level.
“Senior officers in the Council should be the ‘senior officers of the whole borough’ working across current organisational boundaries, leading programmes of work relating to key problems and challenges rather than service departments.” There has so far been no response from the other partners - police, probation, Primary Care Trust, NHS Trust, higher education and employment services – over their apparent secondary role under the ‘strategic council’.
The joint venture would not deliver services but would be manage “the alliances procured. In time it would be able to sell its services to other public sector agencies and thus a JV would provide potential for future income generation for the Council.”
The rationale
The strategy is based on the premise that Barnet does not have the capacity or resources to improve the cost and performance of all its services, align priorities, track changes, transform services, plan early interventions, build social capital and plan for future changes. It will, therefore, “focus its energy on the activities where it alone can add value.” The concept that local authorities will do less in a recession is a novel idea but no one has had the temerity to identify which services will be axed and/or reduced.
Almost all of Barnet’s 4,000 staff would have to transfer to the planned joint venture or service delivery vehicles, leaving a few hundred staff in a strategic role. Barnet UNISON, GMB, NUT and NASUWT have drawn up a TUPE Plus employment charter but the council has not yet responded. The trade unions have also submitted substantive reports and briefings making the case for in-house provision and innovation.
Traditional outsourcing has evidently been rejected. A belief that social enterprises and the voluntary sector will have a major role in delivering services for the strategic council underpins the Future Shape project. But this is wishful thinking and a diversion from the economic reality that national or transnational companies will be delivering most services.
Barnet council trade unions have exposed weaknesses in the council’s commissioning and procurement policies and practices indicating the council is ill-prepared for large-scale procurement. Furthermore, even a PricewaterhouseCoopers review of existing contracts concluded that client and contract management is inconsistent and inadequate.
Lack of options
The Council has claimed that it is looking at other options. However, the Cabinet were asked to only agree to “develop a detailed assessment of the overall model….a capacity vehicle…. and procuring a number of service delivery vehicles”. To date it has failed to identify other organisational options and undertake an options appraisal.
All councils face a significant, year-on-year financial challenge. However, Barnet has provided not a shred of evidence that the Future Shape model will make this easier in future. Nor has it suggested how a three-tier strategic council model will change the behaviour/health profile of Barnet residents and businesses to reduce the health gap, reduce the number of children in care and reduce waste costs – all cited by the council as key concerns.
Barnet’s Future Shape budget is £500,000, and, like many other local authorities currently reviewing efficiency options, seem able to find large sums, despite budget deficits, to finance expensive contracts with the big four management consultants.
2008 began with the Audit Commission’s flawed ‘For Better, for Worse’ study of strategic partnerships, which used commercial confidentiality to prevent identification of terminated contracts and other basic public information. It concludes with local authorities commencing another spate of radical reorganisation. In the same year we have the credit crunch, the financial market meltdown and now global recession.
We have witnessed systemic market failure, a failure of deregulation, off-balance sheet financing, risk management and making markets through the financialisation and commodification of public and private assets. Democratic governance and scrutiny has been eroded.
The strategic council model is rooted in the same policies and ideology that led to the current financial crisis. The marketisation of services, outsourcing, the transfer of services to special purpose vehicles, public private partnerships and the obsession with performance management, are part of the new public management practice. New transformational strategies for local government must be built on a new terrain, not the failed policies and values of neoliberalism.
Simply, we need to NOT reinvent local government but to reinstate public sector principles, rethink organisational structures, service delivery and adopt progressive strategies using evidence, transparent language, honesty and the genuine involvement of staff, service users and residents.
