No one, most of all the normally genial Eric Pickles, said that reforming local
government would be easy or quick. The New Local Government Network reports that the
government’s plan to encourage councils to share back office functions is ‘hugely ambitious’. It says that considerable savings can be made, but it doubts that councils will meet
the 40 percent target for backroom efficiencies. Savings of 20 percent are more likely, the NLGN argues.
On the face of it, the NLGN is correct. Eric Pickles’s demand that councils share their functions and facilities is ambitious. At the moment, councils are struggling to meet the upfront costs of uniting geographically diverse buildings and services. And, even when they do, savings are closer to 20 percent than 40 percent. Today, for instance, Richmond and Merton councils announced that they are going to pool their legal resources to save…20 percent.
But, councils can still do much more to arrest their endemic waste. Despite local government’s stringent funding settlement, many councils are yet to adopt best practice. Presently, one local public service can be procured from as many as 8 different sources, all of which require separate bureaucratic management. A business would not sustain such inefficiency and the CBI has estimated that up to £500m could be saved on procurement if local government’s processes were polished, buffed and repositioned.
Meanwhile, some councils are still recruiting, mainly those whose political opposition to the local government spending settlement is open. Liverpool City Council, which dropped the Big Society Vanguard Project citing lack of support from central government, is one example. Whilst the council has more or less stopped offering low grade frontline service jobs, it is currently advertising three executive posts, each with a salary in excess of £70,000 per annum plus expenses. So there is to be a Director of Regeneration and Employment when the council intends to cut nearly £18million in grants to the voluntary sector, which will be leading the lion’s share of regeneration work. Less money is not supposed to produce more management. Whilst the council has cut executive pay, its chief executive will still receive £195,700 in 2011-12. Efficiencies and executive restraint are not a panacea, but they reveal a mindset. Liverpool City Council seems to be allergic to the sense of waste not want not.
Efficiency is also being impeded by complicated service delivery structures that incubate incompetence. At the turn of the year, it was alleged that Labour controlled Lambeth Council was spending up to £4,500 a week on external consultants to its housing management arm, Lambeth Living. According to some local Liberal Democrats, Lambeth Living has long gloried in infamy and the council was using external help to coax it through acute difficulties and calls for its abolition. However, on 27 January Lambeth Living’s chief executive and one other board member resigned, saying that in no way did the company “represent residents’ interests”. On 15th February, it then emerged that empty properties run by Lambeth Living had accrued costs of £35million, and the Streatham Guardian revealed that the organisation had overspent by another £5million on a boiler project in Roupell Park, Streatham. The boiler is still yet to fire. Nothing has yet been done to address this incompetence and Lambeth Living’s future remains undecided. Incidentally, Lambeth council has to cut £40million from its budget this year.
Above all though, there is widespread resistance of transparency. Councils have been reluctant to publish details of their management pay structure and expenses, in line with government requirements. Nottingham Council’s defiance has possessed an almost Paisleyian echo. The contagion has reached other local government operations. The Lambeth Living saga was characterised by allegations that spending, recruitment and management decisions had been taken without the consent or knowledge of the board. Elsewhere, jobs at unnamed London borough(s) are being advertised through recruiting consultants who claim to have signed a confidentiality agreement with the borough(s) in question. Some of these mysterious placements are for low-paid keyworkers; but others are for very well remunerated executive roles. For instance, the new part-time Head of Parking Services in a borough as yet unknown can expect to receive between £500 and £600 for a day’s labour.
The determined resistance to bureaucratic reform, transparency and executive restraint creates a negative impression. Efficiencies are not the all conquering quintessence, but very substantial cuts can be made without ravaging public services. Besides, how much worse can Lambeth Living perform? The perception is that some councils’ recalcitrance is politically motivated. Whether or not that is true, their residents’ interests are being disregarded.
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