The starting gun has sounded. The race has begun with the Government's English Devolution White Paper, formally announcing the long-awaited local government reorganisation to replace all two-tier county and district councils with single tier ‘unitary' authorities. Prior to the festive holidays, councils were invited by the minister of state for local government and English devolution to submit their case to be part of the priority devolution programme. Despite the short timescales, it is believed more than half of the county councils in two tier authority areas have submitted their interest.
While the driving ambition of the White Paper in boosting inclusive economic growth, building homes, creating opportunities for all, improving public services and targeting funding where it is most needed are broadly welcomed in local government, there are genuine concerns. Between now and the end of the summer, many local authorities at both county and district level will be looking at how any new structural and governance arrangements will work. For those that get onto the priority list this will involve considerable commitment and resource, at a time of acute pressures on services and finances across local government.
The danger, of course, is that some local authorities may take their eye off the ball, particularly in those areas where there is a need for significant service improvement, and this could see a detrimental impact on communities in the short term.
Faerfield is already seeing capacity issues with some local authorities and other public service agencies that are looking to recruit hard to find skills, particularly as they navigate complex improvement journeys. It is becoming an incredibly competitive market for senior leadership talent in areas where service pressures are greatest. This is particularly evident in areas such as social care, finance and service transformation where expertise is in short supply.
However, these recruitment challenges are also emerging in related areas including housing and homelessness. What's more, these challenges are not just immediate, they are going to continue to be priorities for future unitary and combined authorities.
In the case of the combined authorities, the White Paper also introduces a new bespoke duty in relation to health improvement and health inequalities, complementing the existing health improvement duty held by upper-tier local authorities. This again will create capacity issues that are likely to require the strategic authorities and Integrated care boards to reimagine their future resource modelling.
The Government has indicated that local government funding needs to be reviewed to facilitate longer-term planning. This must happen to enable current and new local authority structures to develop the capacity and capability they need to make devolution a success.
The bigger picture and the race for talent
Looking ahead, it is clear that the emerging local government system will have a greater range of responsibilities and will be at the heart of supporting the delivery of the Government's five missions to kickstart economic growth, build an NHS fit for the future, deliver safer streets, break down the barriers to opportunity and make Britain a clean energy superpower.
However, the White Paper acknowledges strategic authorities will need additional capacity to deliver on their expanding responsibilities. As part of this, the Government will enable mayors to appoint and remunerate ‘commissioners' to lead on key functions and there is also a suggestion that there will be secondments between central and local government.
It will also be interesting to see how service delivery partners in the not-for-profit, blue light and private sector develop and adapt to working within a public sector eco system that has greater devolved powers and potentially greater fiscal devolution.
Faerfield believes that the challenge to secure the talent needed to embrace the changes ahead has to be a top priority for public sector organisations over the next five years. The sheer breadth of change required in the short and medium terms is breathtaking and will need organisations and leaders to operate in a different way and in local government, to bring in new skills from other sectors. We are already seeing this in established unitary and combined authorities, particularly where experience is needed in areas such as transport, energy and programme delivery.
In the short term we also believe there could be issues in retaining senior staff, particularly in smaller unitary and district councils, who may see the opportunity to move into other organisations, retire or to move out of the sector completely. One of the critical issues facing local government during this period will be to maintain high levels of performance and ensure there is sufficient capacity in the system to keep current services operating effectively as the new local government map unfolds.
Ben Cox is local government partner and Jason Wheatley is partner for executive interim management at Faerfield
