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Cut choices
Planning – 27 January 2011

The cuts in funding for councils have prompted a radical rethink in how services are delivered. Mark Smulian reports on three options open to planning departments

Imagine for a moment a council that employs 14 people. Not 14 planners, but 14 staff in total. That is the way that one Yorkshire council (see below) has decided to respond to the swingeing cuts in local government funding announced in last year's Comprehensive Spending Review. Elsewhere, council responses to the cuts may be less radical, but slashed budgets are still disrupting the traditional patterns of employment that planners and allied professions have known in local government. The consequences are not yet clear.

While there have been reorganisations of local government over the years, the basic structure of one chief executive, one person in charge of planning - albeit sometimes with other responsibilities such as regeneration or environment - and the council's own team of planners has largely endured. But, with spending cuts of 28 per cent being enforced across local government over the next four years, many councils have decided that they cannot carry on as before while delivering adequate services.

Some planning departments have already been almost entirely outsourced. One example is North East Lincolnshire Council, which struck a deal with Balfour Beatty last July. Other councils have opted to create a shared planning service with neighbouring authorities, while the Government has signalled its backing for staff to create workers' collectives, raising the possibility of staff in a council planning department setting up a mutual. Here we investigate three possibilities for cost-cutting.

Outsourcing

Employees, with their national insurance contributions and holiday entitlements, are expensive. Consequently, one local authority has come up with a simple solution - get rid of them. Councillors at Selby District Council in North Yorkshire have accepted a plan under which the council would retain only 14 of its 300 staff.

Other employees, including planners, would be transferred to a "service delivery vehicle" that would be owned by the council but run independently. So, while planning decisions would ultimately rest with elected council members, all the work up until that point would be handled by the delivery vehicle.

The plan, drawn up by chief executive Martin Connor, says the vehicle "will be set up on commercial lines to deliver services to a contract agreed by the council, as if it were an external company". It would have 160 staff and would "use its freedoms from council control to maximise its efficiency". But ominously for staff, its "new remuneration scheme" would lie outside existing public sector structures.

Elsewhere, Charnwood District Council in the East Midlands has proposed to turn itself into a "commissioning council" and find a joint venture partner to deliver most of its services, including planning. The authority must save 10 million by 2014/15, equivalent to 12.5 per cent of its spending, and councillors believe that such cuts cannot be made from efficiency savings alone. A cabinet report explains: "There are options to adopt a commissioning approach using other partners to deliver services with the council."

Both Charnwood and Selby local authorities hope their new service providers will be able to sell services to other public bodies. The problem is that many public bodies looking at such changes hope to set up joint ventures to sell services; few have expressed a willingness to buy from their peers.

In the East Midlands, a local authority has already taken a more straightforward approach to outsourcing. Last July, North East Lincolnshire Council announced a deal with facilities management firm Balfour Beatty Workplace whereby the company would take over and run the authority's planning, transport, housing improvement and economic development services, among others. The local authority retains a statutory planning officer who will act as a go-between for the company and the council.

Sharing services

Cooperating with nearby councils to provide services is one solution that many are favouring. Most examples of this so far have seen adjacent authorities collaborate to provide a service that employs fewer staff and has lower overheads than when they were separate entities.

Taking the shared services argument to its logical conclusion, two councils on the south coast have merged in all but name. Adur District Council and Worthing Borough Council have now integrated most of their staff. The authorities now share a chief executive, senior management and most service teams, including the one for planning.

In a similar move, the London Boroughs of Westminster, Kensington and Chelsea and Hammersmith and Fulham last October announced their intention to merge their services. Research is underway on how to merge the councils' environmental, family and children's services, with other services including planning set to follow in due course.

"Lots of places are looking at shared services, and even at sharing chief executives, and you could see that filtering down to the planning system," says Planning Officers Society president Stephen Tapper. "Shared services can still be done with the increased localism workload that is expected in planning. As long as you have a core of local knowledge, it is the issues that come up from the process that guide you. You do not necessarily need a really local service for that."

However, local government academic Tony Travers, director of the Greater London Group at the London School of Economics, thinks that local politics will weigh against a shared planning service, whatever its financial attractions. "There is no doubt that we are going to see different ways of doing things and you have seen examples already of councils seeking greater efficiency by combining back office services," he says.

"But one of the most genuinely difficult services to share is planning because it is the most local service and the one that is most intimately tied up with its place. It would be very difficult to do so, because the places where people live are so important to them and so politically important to councillors."

Planning decisions are a fertile area of local political controversy and councillors may prefer to have "their" planning service whatever the cost, which is why Travers sees planning services remaining separate regardless of what else councils might share.

By contrast, Andy Sawford, chief executive of the Local Government Information Unit think-tank, can see planning services being shared and neighbourhood plans being guided by planners living far from the area concerned. "Councils are getting very comfortable with the language of shared services, joint procurement and multi-agency working," he says.

Mutually-run services

Perhaps the most radical option for planning departments is the Government's idea for groups of public sector staff to set up mutuals, which then sell services to their original employing local authority and to any other entity willing to pay them. This idea originated in social services under the previous Government, and a few social workers' co-operatives have already been formed.

In August, Cabinet Office minister Francis Maude announced a 10 million fund designed to encourage public employees to form such mutuals. He also launched a set of pathfinders, again mainly in social services.

However, there is nothing in the government guidance that would prevent a mutual being formed to oversee planning, economic development, regeneration or apparently anything else. "This is the first step in creating a genuinely ground-up movement where staff, who are the real experts, can come together to take over and deliver better services," Maude said.

But Mary Holt, director of planning and development at consultancy URS-Scott Wilson, sounds a note of caution. "It remains to be seen whether the Government's Big Society policy can deliver planning services in the same way that an employee-owned enterprise delivers help to the homeless," she says. "The level of accountability and the need for robust transparency and quality control would need to be carefully considered in the delivery of a service where courts can be the final arbiters."