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Council leaders are being urged by the CBI to go beyond shared services and introduce more radical changes to the public services, writes Dermott Calpin Shared services are among the ‘easy wins' for councils looking for ways to improve efficiency and make savings, according to John Cridland, director general of the CBI. But Mr Cridland has also made clear that in the longer term he believes local government needs to undertake a more radical review of existing work practices, with top of his list a need to fundamentally ‘re-engineer' public services. Addressing last week's Public Sector Efficiency Expo at the Business Design Centre in Islington, Mr Cridland acknowledged that policymakers faced a major challenge in delivering improved services at a time of tight controls on spending. His comments come at a time when local authorities are increasingly aware of the need for more radical solutions to service delivery, and coincided with the publication of a report from the Office of Fair Trading on ‘Commissioning and Competition in the Public Sector' which underlined the value of competition and argued that public services markets need to be more open and contestable over both the short-term and long-term. Dermott Calpin:'L.G.A forecasts councils will have a funding shortfall of £6.5bn in 2011/2012' (Pic: Shutterstock Photosani) The study says that more effective competition in public services should involve: reducing barriers to entry and exit, encouraging a more diverse supplier base and ensuring suppliers have the right incentives to make efficiency savings, raise quality and innovate, though as the OFT's chief executive John Fingleton suggested: ‘The role of competition and choice in the public services is not a new subject but it is likely to remain as contentious as ever in the next few years.' With the Local Government Association forecasting that councils will face a funding shortfall of some £6.5bn in 20011/12 and many still reeling from the impact of what is generally acknowledged to have been the toughest grant settlement in ‘living memory', senior managers and councillors are all too aware of the challenges ahead and the need to look beyond shared service gains. Communities secretary Eric Pickles has made few friends with his repeated attacks on council salaries and non-jobs and for the repeated mantra that ‘by sharing back-office functions councils will be able to protect the frontline and even improve the choice and services on offer to local residents' though there has been growing scepticism at the lack of hard figures to support such generalised assertions. LGA vice-president Richard Kemp has underlined the view that: ‘The speed and depth of the cuts mean that conventional efficiency drives, such as shared services, will fall well short of delivering the kind of savings needed to protect all the services councils provide' Adding that: ‘ Inevitably councils face extremely tough decisions on which services to save and which to cut.' The CBI view is that councils can put themselves in a position to ‘deliver more with less' but Mr Cridland recognises ‘this won't be easy' and said: ‘We must hope public service managers will respond positively and find new ways of providing the services people want at a price the country can bear. ‘Some reforms are vital to this response. These include: reducing discretionary cash spend; driving out waste; achieving greater productivity; sharing services; having better procurement; and ensuring full and fair competition between different providers. These should all be a given. They should be an integral, instinctive part of how public services are delivered, and in some places they already are. ‘Making cuts is rarely easy for anybody, whether in the public, private or voluntary sectors. It's usually painful and there are often casualties. But saying change is impossible shouldn't be the default response,' said Mr Cridland and he cautioned: ‘If parts of public services cling on to existing structures and work practices, hoping that in a year or two things will return to business as usual, they won't. ‘What we need, and what will fill the gap between resources and expectations, is the re-engineering of our public services, and it's this I'd like to focus on. ‘So what do I mean by re-engineering? It's not a new thing. Most large organisations have re-engineered their products and services in response to the pressures of a dynamic, competitive world. The best ones have done this with deliberate disregard to the status quo, and by starting with a clean slate. Our public services should do the same.' Mr Cridland called on public sector to endorse the drive towards the process of re–engineering and we don't want cultural inertia and resistance to change preventing necessary reforms. ‘Fear of change is understandable. But employees need to appreciate that long–term security comes from working for an organisation whose products and services are wanted, needed and affordable. To achieve this, we need reform – liberation from constraining structures and a focus on results rather than processes. Mr Cridland claimed that progress in local government progress is ‘mixed' despite the fact that around 90 per cent of councils are sharing back–office services in some form and he cited research from the New Local Government Network in its ‘Shared Necessities' report which claimed these would result in savings of no more that 3.6 per cent or less of overall spending, He acknowledged the importance of experiments in sharing front–line services such as the tri–borough model proposed by Westminster, Kensington & Chelsea and Hammersmith and Fulham councils for children's and adult social care services and plans being explored for shared delivery across 10 service area by councils in the Greater Manchester area. ‘We'll monitor progress with these, but scale sharing alone isn't re-engineering,' said Mr Cridland. ‘Evidence from the 13 Total Place pilots shows that the greatest gains are made when change is more comprehensive, and funding streams come together to tackle problems. ‘This means the whole person is considered, and not just their individual needs in housing, health, education and other services in isolation. ‘The strict departmental approach to spending in communities needs to end. The Government's aim of having a joined–up approach to commissioning is the right one, and we know many council leaders and chief executives are reforming ineffective spending.The next stage is the 16 ‘Community Budget' pilots which are being launched next month. But we need to move beyond pilots and get on with this. If we don't, we will hear more discouraging stories about councils cutting services that help the most vulnerable. ‘This will only displace them and increase pressure elsewhere – particularly, as Age UK warned last month, on the NHS.' Mr Cridland called on council leaders to lead the debate on integrated local services and said that instead of reaching for the axe, they should gauge the local appetite for ownership and management of libraries, youth services, playgrounds and parks. ‘Re–engineering isn't a leap into the unknown. Many organisations from all sectors have gone through this successfully. Everyone involved with public services, from politicians and permanent secretaries through to management teams and people on the shop floor need to challenge the view that there's no possible scope to use resources better. They need to dismiss the notion that a service can't be changed because it has always been done this way. ‘If an activity is important and it works, then find ways to keep it. If it isn't – or it doesn't – then make the case and stop it. If someone else can do it better, or cheaper, or both, then make the change,' he urged.

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WHITEHALL

Re-engineering the future

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