Is sharing management an essential means of reducing costs for local authorities during the downturn? Or is it, as one chief executive commented, a passing phase, like crushed velvet trousers? Jamie Hailstone reports on a debate last week.
Most discussions about local government can be wide-reaching affairs, but to paraphrase George Orwell's satirical novel Animal Farm, some are more wide ranging than others.
When chief executives, council leaders, senior civil servants and other industry figures gathered at Tribal's offices in London last week to discuss the merits of a shared management structure, the talk included the importance of procurement, what supermarket giant Tesco is doing right, and crushed velvet trousers.
Over the last few years, several councils have chosen to share chief executives and management teams with each other, and with the prospect of more public spending cuts in the autumn, many more local authorities may choose to go down this path.
One delegate said that it was still a matter of ‘serendipity' as to whether two local authorities could successfully share a management team or merge a back-office function. ‘It's pure luck,' he added. ‘It's about having the optimum conditions.'
Another representative said the key to sharing services was the realisation that it was not just about money. It was also about improving services.
‘Just because one brings a management team together, it does not mean that it will all work straight away,' he added.
There was some discussion about different political affiliations between two authorities creating a problem, but one person said sharing a management team had ‘melded together' councillors, ‘regardless of their political persuasions'. The message that two councils were working together to save money and improve services could also be popular with the public.
‘In the climate we are living in, the public are happy because they can see we are getting to grips with the issues,' one delegate explained.
For many people, joint administration or sharing chief executives can mean only one thing – two councils merging into one, single authority. But one delegate said, ‘merging councils is a luxury'. For smaller rural councils, the delegate added, it was more important to preserve the democratic accountability with two sets of councillors, as opposed to a single group spread over a wider area.
Another question was about whether different levels of council tax for local authorities who shared management teams was a problem.
One delegate replied that it was not currently an issue with voters in either borough. One subject which sparked much debate was Tesco and its approach to management. As one delegate put it, if councils worked together on construction, they could get the sort of deals the retail giant got.
‘I'm absolutely convinced that the real way of reducing procurement costs is to collaborate more widely,' said one participant. The supermarket was also praised for its focus on customer service.
‘What Tesco will tell you is that it took the company a long time to get where it is,' said one person. ‘ We have to get into a situation where service is centred around the customer.'
The demise of the Audit Commission provided another opportunity for councils to work together on procurement. According to one delegate, councils in England would be ‘mad' not to club together and hire private auditors when the regulatory quango disappeared.
‘There are still lots of barriers which make it hugely expensive to share services,' said one delegate. ‘I hope the Government is on the ball and it encourages councils to go for shared chief executives.'
Some corners of the public sector had proved to be more responsive to calls to share services and join forces than others, it was stated.
‘At the moment, the police are running away,' said one person, while another delegate added that the Department for Work and Pensions had been somewhat less than enthusiastic about taking part in joint call centres or one-stop shops.
One person also added that their and another local authority had a ‘negligible response' from the CLG about the two councils' plans to work together.
One big area for shared management is health. Several councils have joined forces with health care trusts and some now share chief executives.
Local government could learn a great deal about planning, said one delegate. He cited the example of a London trust which was able to change the way it dealt with people with diabetes, and save money at the same time.
He said by employing more specialist nurses and changing the way GPs worked, the trust was able to cut the £16m it spent on people with diabetes every year by £4m. The changes to working practices also had a tangible benefit for patients, with emergency admissions to hospital for diabetes-related problems falling in the borough from an average of seven a year to just one.
One delegate wondered whether the current generation of councillors could actually deal with the reality of cutting budgets. ‘We are all aware of the financial restrictions, but the rank-and-file councillors still think the rabbit will be pulled from the hat,' he explained.
One of the biggest stumbling blocks to sharing services between two local authorities, according to one contributor, was IT.
‘I have just spoken to our IT staff to get two councils on the same IT platform,' said the delegate.
‘But it could be between 18 months and two years away.'
Someone else added that he still needed to have two e-mail inboxes, one for each authority, despite having a shared role
In one example, a delegate admitted that trade unions had initially been quite hostile to the idea of sharing services with another authority. ‘Staff saw it as a subtle takeover,' said the representative.
However, he said that after some intense negotiations, some union officials decided they would rather see the service shared with another council than outsourced to the private sector.
And finally, there is also the matter of the crushed velvet trousers. As one delegate remarked, he used to own a pair. The flared trousers were ‘of the moment', and he wondered if all this talk of shared management structures would suffer a similar fate...
The participants
Geoff Alltimes Chief executive Hammersmith and Fulham LBC and PCT
