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Despite the cuts, the public sector will still be spending 41% of GDP, and it needs to be spent more wisely through community budgeting, says Richard Kemp For too long, too much money has been wasted in the public sector by too many people. That is the inescapable conclusion that we must all come to after reading the reports of the 13 official Total Place pilots and the 50-plus unofficial ones. It's not that any specific organisation has been bad or lazy or unskilled or untrained. It's the fact that there have been too many organisations competing for cash and clients in a way that has become bewildering for those of us in the public sector, and even more bewildering for those who need the services of the public sector. Organisation after organisation with the mission statements, websites, awaydays and managements costs. Many organisations responsible, but in some cases, such as the Baby Peter case, no one organisation taking responsibility. That is why the LGA pressed for what we call place-based budgeting, a concept that the Government has accepted – although changing its name to ‘community budgeting' – and has started to roll out through 16 pilots involving about 30 councils, looking at the needs of ‘complex families'. These families are a good place to start. Research in Liverpool some five to six years ago showed that one extended family was costing the public sector more than £3m a year. And that didn't include the uncountable costs of the anguish and misery that they caused to communities and individuals. Place-based budgeting will lead to a really different way of doing things. When we start looking in detail at how much we spend in an area, or on a specific theme, and then ask, would we spend it in this way with these organisations on these projects? the answer is invariably, no. Typically, we have started with a problem, delegated dealing with that problem to an organisation or created another organisation to step into a perceived breach, and then started spending money. What we need to do instead is work backward from the outcome we want, by devising first a series of outputs, and only then the delivery mechanisms to deliver those outputs and that outcome. Perhaps the most chilling example of bureaucratic inertia was seen when the last government, rightly, decided to put most of the work of the Learning and Skills Council back into local government. Ministers then created three new quangos to deal with the remaining one-third of work kept with central government. Worryingly, there were great problems assimilating central government staff into local authorities, because they were paid so much more than our staff. The LGA believes that by adopting this ‘outcome-first' approach, we can save between 10 and 20% of the running costs of our public sector delivery – and achieve better results. Yes that will still lead to job losses – after all, one man's efficiency is another man's job loss – but it will mean we are providing the service we and, more importantly, our taxpayers really need. We can also do a lot more inside specific organisations. If we look at the police, we can see how major savings could be made in just two regards. First, Her Majesty's Inspectorate of Constabulary has calculated that a change in the bureaucracy and form-filling required of its staff would lead to 12% more police being out on active policing, and not inside the station filling in forms. Second, legislative changes will be introduced to give councils and the police far more control over licensed premises. Far too much money is spent on policing drunken louts in the middle of the night, with the private sector creaming off profit, and the public sector footing the bill. Add to those internal and external changes to the sector, the ability to move police much more easily into new methods of working with other organisations inside the justice, health, education and community safety systems, and I have no doubt we can get far more value for our cash. Times are hard – that's indisputable. However, as [Liberal Democrat MP] and chief secretary to the Treasury, Danny Alexander, explains, after all the cuts, we will still be spending 41% of our GDP on the public sector, which is well above average. That will mean that the public sector has more than £700bn to use every year. We can use it better. We must use it better. Cllr Richard Kemp is a long-service Liberal Democrat councillor in Liverpool, and is leader of the Liberal Democrats at the LGA

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WHITEHALL

Don't waste a good crisis

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