Andy Burnham reached No10 by recognising the public's frustration with local services. Councils, police and the NHS are being asked to do more with budgets that have not risen in real terms – and may not for years to come.
The Prime Minister wants more power and money devolved from Whitehall to mayoral authorities, while reorganisation will continue to create larger unitary councils. Whether this delivers economies of scale and faster decisions remains uncertain – and could take years to achieve.
Bringing public service contracts back into local government looks like a quick win if the perceived huge profits are returned to councils.
But after years of austerity, the profit margin on work has shrunk. Companies have aggressively under-cut each other and, rightly, local government procurement teams have got tougher in negotiating. Another problem is that after decades of losing experienced professionals, most councils don't any longer have people with deep knowledge of delivery.
Key services such as waste collection and housing maintenance need capacity, specialist knowledge and day-to-day resilience that many councils no longer hold in-house.
The new Prime Minister's pragmatic approach is encouraging. As Mayor of Manchester, he built partnerships around what each organisation did best.
With insourcing looking difficult, the local authority trading company model provides an alternative to traditional outsourcing and overstretched in-house delivery. LATCos support local growth, community ownership and public-sector values; and they offer a cost-effective solution.
Norse Group, a LATCo owned by Norfolk CC, has no private investors seeking large returns. We deliver services from highways and waste collection to facilities management and property consultancy, employ 9,000 people, pay UK tax and keep returns in the public purse. And we have developed a successful joint venture model so that other councils can share the benefits.
Because we partner with councils and remain accountable to them, their local communities retain control. For councils under pressure, LATCos such as Norse Group show that pragmatic service delivery can work.
Justin Galliford is CEO of Norse Group
