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Managing perceptions and attracting new talent in light of reforms
When George Osbourne announced the Summer budget in early July, it again reinforced the long term changes that we’ve known for a while. With on-going cuts and reforms, the size of government, both local and central, will continue to shrink. Industry experts estimate that within the next year it will reduce to 36% of the economy, in comparison to a previous 43%. While areas such as the NHS should remain fairly protected, local government is likely to bear the brunt of the impact again. As a result, the implications for those within the sector moving forward are simple – they will need to continue to do more for a lot less.
So what are the solutions, if any, and how can council leaders manage these changes effectively? At a recent Local Government Board dinner attended by Chief Executives and hosted by Odgers Interim and Berwick Partners, guest speaker Tony Travers cited three critical areas that will need to be addressed. Specifically, better management of existing resources; reduced demand on services through intervention and the management of public expectations.
Arguably better management of existing resources is already occurring and will be strengthened by the advent of devolution. By aligning budgets, the sector can hope to achieve a more efficient use of combined resources, ultimately delivering better services. This would provide stable and continuous funding to stimulate economic growth according to local needs, moving away from ad hoc financing for specific projects and allowing cities to raise sustained investment for vital infrastructure such as transport, schools, housing, energy supply and technology. Likewise, decisions taken at a local level should help to create efficiency savings, as a closer eye can be kept on how money is being spent. We’re already seeing this happen in Greater Manchester and Cornwall and the results will be interesting to observe.
To manage demand ‘down’ in order to reduce the burden on already stretched services, public intervention measures may be necessary. Demand for public services is linked to the actions of the state itself and misaligned or ineffective services can arguably increase demand. To avoid this, local government leaders will need to fundamentally rethink the relationships between citizens, the state and public services. In some areas we are already seeing many local authorities managing demand by commissioning models that engage the voluntary and business sectors using a collaborative, citizen-centric approach.
Perhaps the hardest challenge of all will be the management of public expectations. National government has done little to communicate externally that authorities will not be able to deliver the same level of service, despite the remarkable level of cuts. While Councils can and have become more efficient it’s naïve to pretend that every service they manage can continue to run as it has been in the face of such severe cuts. Arguably, the UK is moving towards a public sector model similar to that in the US, where state support is much lower. However, in the US, citizens are used to and expect much less.
Responsibility will primarily lie with local government to manage public expectations on what services are realistic and achievable moving forward. For example, while social care for children and the elderly will remain protected, investment into more discretionary areas such as roads, leisure, sports, housing and economic development will inevitably be reduced.
To meet these challenges, it is self-evident that the quality of management will be a critical issue. However, the ease of recruiting individuals with the correct skill sets may be impacted by long term austerity, leading to a potential skills gap. Indeed, there are concerns that if local government continues to be squeezed for a long period of time a negative perception of a career in the sector may occur within the labour market.
I would argue against this. For senior politicians and executives, the management of such significant change poses a unique and interesting professional challenge. Despite on-going austerity measures, running a local authority remains a diverse, high status and rewarding role. For example, there aren’t many roles where on any given day you may have a meeting with a minister, followed by a visit to a nursery school.
From my perspective, as a provider of senior interim executives, the scale and scope of the roles that our interims are being asked to undertake continues to be extremely varied and rewarding. Whereas in the past, the majority of interims filled roles within traditional council structures, the need for change has now led to the creation of transformation programmes and a requirement for a different type of interim to lead them. Commercially focussed individuals with a track record of achieving ‘more for less’ and identifying areas of revenue are in particular demand.
Now, more than ever, emphasis is being placed on local government to be self-reliant, accountable and innovative. As a result, it is crucial that senior positions within local government are filled with the correct skill sets and expertise to manage the many changes and to lay the foundations for success.
Bambos Eracleous, Partner
Categories: Local Government