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Easing the pain of cuts
Local Government Chronicle – 18 November 2010

Salami slicing won't be enough - service delivery will have to be transformed, says Mark Smulian

For most people, how well local government does in its response to the comprehensive spending review will be how well, if you like, local authorities move it from "headline" to frontline.

In other words, while the figures in the chancellor's announcement were no doubt alarming, they will only become "reality" once they are translated into the ground-level effect on local services.

It will be the closed library, potholed road, inadequately tended elderly person or long housing waiting list that gets noticed, and which in the public's eyes will determine how successful they think their local authority has been.

While for most local authority managers the size and scale of the cuts outlined were much as expected (or feared), the front-loading - falling heaviest in the early part of the spending review period - was not.

Across the country preparations for the spending review have ranged through radical plans for service transformation, increased sharing of services, and partnering with community and voluntary groups.

Some councils might be "salami slicing" but, if so, they are not boasting about it and the consensus is that this approach will only briefly delay problems.

Matthew Taylor, chief executive of the RSA thinktank and a former Downing Street adviser under the Blair government, thinks councils must first get their houses in order, then engage with citizens to agree a strategy within which cuts will be made.

He says: "Local authorities need to have driven out all inefficiencies - which they might think they have already done - but there are always more to find and there will be zero tolerance by the public of inefficiencies once frontline services start to be cut."

Despite the spread of shared services, Mr Taylor says this has gone too slowly because "there will not be much public tolerance of local authorities that are bureaucratic or territorial about back-office services".

After that will need to come the "conversation with the public to think through changes and decide how services should be delivered". The final stage will be for councils to retain "a sense of place, so that cuts are made but within a strategy for a place, and they do not just cut blindly", he adds.

One widely touted solution is for councils to hand some services to the community sector, but do groups willing and competent to run these necessarily exist?

Mr Taylor says: "It varies from place to place. I'm on the Lambeth Co-operative Council Commission and in Lambeth you have leaders keen to make change happen and lots of groups in the community ready to take that on, but in the middle a local authority that is rather risk averse and bureaucratic.

"In a place like that it is no problem, though elsewhere community groups might need help to organise."

Colin Talbot, professor of public policy at Manchester Business School, fears the need to make deep cuts from next April will see councils reach first for their salami-slicing implements and "chop spending on anything that's not mandatory".

He says: "Councils will not know the exact funding they get until March and there will then have to be some rapid decisions.

"Transformational change takes three to five years to do properly, and you always have a performance dip while it is happening as things change, so I think it will therefore depend a bit on people's electoral cycles."

Prof Talbot, for one, is sceptical about the capacity of the voluntary and community sectors to take on service delivery. "They might be able to provide some service but they're not just a tap you can turn on," he says "The government can't do much about it either - whether you have organised community groups capable of doing this is largely an accident of history.

"The Big Society is not just sitting out there, and if it is, you still have to find a way to operationalise it," Prof Talbot adds.

Ultimately, each council must find its own way to grapple with service delivery in this new climate: here are examples of what some of them are doing.

Wealden DC

This rural district in East Sussex has decided to put each service into one of three categories: those destined for business process review, for outsourcing or for shared services, says chief executive Charles Lant.

"Most services have been through business process review, where we have made some huge savings, many in procurement, and removed duplication," he says.

"The key has been to have staff involved so we do not have organisational sabotage, by which I mean that when there is any transformation those who may lose out may have a motive to impede it, while it is less obvious who the gainers will be."

Wealden outsourced repairs to its 3,000 homes, taking advantage of lower prices in the construction industry, but kept grounds maintenance in-house after a competitive tender.

From 2013 the council will work with its four neighbours and East Sussex CC on refuse collection and plans a strategic alliance for shared services with an as-yet-unnamed neighbour.

Some cuts, too, have been simple. A "community conveniences" scheme, under which shopkeepers make toilets available to the public, has saved most of the 100,000 this cost Wealden.

Others are more complex. "We still have to maintain services, as we have not had a single statutory duty removed, and there are some things we do that if we don't do them right, people can die," Mr Lant says.

Wealden expects to lose some 90 of its 540 posts by 2014-15. "Keeping key staff on board is essential," says Mr Lant. "We have put 30,000-40,000 into staff training and managing change, and people raise eyebrows at that but it's vital. You cannot do enough on communication."

Oldham MBC

Few cuts are more controversial than those in adult social care, yet that is what Oldham has been forced to do, says its leader Howard Sykes (Lib Dem).

"We are going to have to stop doing a number of things and one of them is adult social care," he says.

"It will go out to the private and voluntary sectors because that is cheaper. We have got to make 25m cuts and we spend 10m on adult social care. "Our total budget is 600m but the controllable budget is only 100m, by which I mean the part we can change - for example, you are not allowed to touch schools."

Oldham and neighbouring Rochdale MBC now have a joint contact centre and Cllr Sykes expects various combinations of councils across Greater Manchester will increasingly share services as "it is not efficient for us all to do 10 of everything".

And a report to the Association of Greater Manchester Authorities (whose members must save 578m over three years) in September identified 11 areas for collaboration "where there is greatest opportunity and benefit for collaboration ... particularly in the high spending areas such as adults and children".

West Dunbartonshire Council

West Dunbartonshire must make cuts, but fears a boomerang effect from taking the obvious path of redundancies.

Leader Ronnie McColl (SNP) explains: "This is an area with high deprivation and poverty and if you start cutting social services in a place like this the problems don't go away. "We are also by some distance the largest local employer, and so if we had a lot for redundancies it would be counterproductive, as it would increase demand for our welfare services."

Action on savings has included remodelling housing support on a caseby- case basis, so that it matches users' needs, "which is labour intensive to start with but will save 4m in a full year".

Advice services, which were provided from several different budgets by varied organisations, will also be consolidated.

West Dunbartonshire will rely for the big savings on shared services, where it is working with seven neighbours in the Clyde Valley Community Planning Partnership, initially on social services and back-office functions.

Kent CC

The county's "Bold Steps for Kent" programme is based around helping the economy to grow, empowering citizens to "take responsibility for their own community and service needs", and tackling disadvantage by "being a county of opportunity and aspiration rather than dependency".

These somewhat controversial aims will be built on "hard and difficult choices where not every issue will be a priority, not every concern can be funded".

Kent must find 330m of savings over the next four years. Leader Paul Carter (Con) found no surprises in the spending review cuts and even "a glimmer of hope in some of the infrastructure and road schemes, which are not quite as bad as they might have been.

"We will batten down the hatches. The council will shrink a bit and some things we will make ourselves, and sell them to other local authorities if we can, and others we will stop, or buy in," he says.

He adds: "It will not be like Suffolk, where they intend to just be a commissioning body."

This approach is based on seeing opportunities amid the financial carnage. The Bold Steps document notes, for example: "We can either 'salami slice' every service, spreading the pain equally.

Or we can think big, seize this opportunity to redesign our services and fundamentally rethink what we do, how we do it and who we do it with, so that in four years' time Kent emerges a stronger, more dynamic and self confident county."