I have a confession to make: I can't bring myself to read the Open Public Services White Paper. Whenever I try and steel myself to pick it up, all I can think of is David Cameron tearing the social contract into tiny pieces whilst laughing maniacally. That is not a pleasant mental image.
Instead, I've read Vince Cable's 2009 book about the credit crunch, titled 'The Storm'. He wrote it in haste to try and explain the causes of the financial downturn, back when the idea of Liberal Democrats in the cabinet would have provoked disbelieving laughter. Reading it with the benefit of hindsight is very interesting.
When I borrowed this book from the library, I thought it would display the vast extent of Cable's hypocrisy once he become a government minister. I was surprised to find that some of his 2009 viewpoints accord quite closely with the coalition's stated programme. The book articulates Liberal Democrat ideology much more clearly than any of their election campaigning ever did. Cable's view is liberal in the old-fashioned sense of the word; pro-markets and anti-state in principle, but agreeing that there is need for a strong legal, regulatory, and fiscal policy basis for markets to operate within. Superficially, this agenda seems to differ from the Conservative Party (who dispute the need for a strong legal, regulatory, and fiscal policy basis, painting it all as red tape) and the Labour Party (who are more pro-state, insofar as they actually invested in public services). That's a vast oversimplification, which credits UK political parties with an ideological coherence that they don't have, but it does point to a certain sympathy between Conservative and Liberal policies. Labour at least pretended to put people before markets.
Cable clearly articulates the need for reduced UK public spending to get rid of the so-called structural deficit (a disputed term, I should add). This is now the coalition's favourite soundbite. He also emphasises the need for stronger regulation of banking. The current government have talked about this at some length; their actions have conspicuously failed to live up to their words. Remember Project Merlin and how banks continue to ignore it? Remember when banks were allowed to pay unlimited bonuses? I don't think that this was what Cable had in mind in 2009. That said, his concern was the need for multilateral reform, given the international nature of the crisis. He has been making the right noises, just without supporting action.
There is a seemingly minor but critical distinction to be made between Conservative and Liberal Democrat economic policy: in his book Cable proposes public sector cuts once stimulus has got the private sector growing; Osbourne's approach is predicated on cuts to the public sector acting as the stimulus. The former nuance has clearly been subsumed under the great coalition carnival of cuts. As I've said many times before, I doubt such sudden and deep cuts will turn out well for anyone, least of all the most vulnerable in society, the economy, and the Liberal Democrats as a political party.
'The Storm' makes it clear that unbalanced housing policy contributed significantly to the economic crisis. Cable notes that the hysterical pursuit of home ownership (influenced by political, financial, and media hype) brought about a destructive house price bubble. To avoid it happening again, a more-balanced housing market with greater proportions of social and private rented property is needed. That is definitely not what the present Housing Minister and his ministry are working towards. Interestingly, Cable suggests that a period of deflation could help to prevent a second property bubble. In 2009, this was a real possibility and deflation did actually occur (if you go by RPI). These days, inflation is above 4% and being driven by food and fuel prices rises over which the government has very little control. Both markets are dominated by cartel behaviour and global in nature, as other chapters helpfully explain.
This book is definitely at its best when looking at the global picture; the rise of China and India as economic powers, the perversity of richer countries borrowing heavily from poorer, and trends in energy and food markets are all summarised neatly. I strongly take issue with the relegation of climate change to an afterthought, though. Nonetheless, 'The Storm' is well worth reading and covers a lot of ground within 157 pages. Ultimately, though, it is fatalistic. The UK is waning as economic power, many contributory factors to the downturn remain beyond UK policy control, and even if we get our domestic policy in order recovery will remain difficult.
Cable sensibly doesn't try and predict the future; he didn't foresee the alarming prospect of Greece, Ireland, Italy, and the US threatening to default on their debts, for instance. Rather, he presents a frankly depressing vision of where things were in 2009 and the main problems that needed to be addressed. It's now 2011 and those problems remain unfixed; rebalancing the housing market, investing in education and research to strengthen the economy, economic rebalancing away from financial services, and promoting fairness by using the tax system to reduce inequality. I haven't seen evidence of the coalition government making progress with any of that, despite frequent name-checking of the latter two aims.
I still think that Vince Cable has acted hypocritically and consider his callous attitude to Southern Cross unforgivable. However all politicians (indeed all humans) are hypocrites sometimes and working in a coalition inevitably requires compromise. The astute analysis in 'The Storm' demonstrates that Cable must realise how ineffective and downright dangerous most of the policies he has to support are likely to be. As the economy stalls, the euro totters, and America seems doomed to be downgraded, I wonder if he thinks such compromise was worth it?
I did find one prediction in the concluding chapter of Cable's book: 'There is a long period of austerity ahead'. It's hard to argue with that.
Showing posts with label budgets. Show all posts
Showing posts with label budgets. Show all posts
Tuesday, 19 July 2011
Wednesday, 22 June 2011
Who Cares
This was not an easy post to write, but has been on my mind for a while. Social care recently made the news due to the possible collapse of Southern Cross, which cares for 31,000 frail elderly people in 750 homes around the country. Prior to that story breaking, I suspect much of the public knew little about how social care works in this country, unless they needed to ask for it. The government's online portal Directgov largely bundles social care into its 'Disabled People' section, but its remit is wider than that. As well as the disabled, care should be available to all other vulnerable people who need it: the elderly, children, even whole families. The responsibility for this lies with upper tier (county) and unitary councils, not the National Health Service. However practically all councils have contracted out elements of care to the private sector, for example paying for elderly people to stay in private care homes like those run by Southern Cross.
The British population is an ageing one. Government statistics state that between 1984 and 2009 the number of people aged 65 and over in the UK increased by 20% to 10.1 million. In 2009, 16% cent of the population were aged 65 and over. The number of people aged 85 and over more than doubled over the same period to 1.4 million and the percentage aged under 16 fell from 21 per cent to 19 per cent. People are living longer, which is cause for celebration. However, the public sector is not keeping pace with demographic change. It is inevitable that as the population ages, the cost of social care for the elderly will rise. It is already one of the largest chunks of county council expenditure, generally second only to education provision.
To date, the government's approach to social care strikes me as disgracefully negligent. The Department of Communities and Local Government took the largest budget cut of any government department in the Spending Review; their administration and programme budget reduced by 51% over three years and their capital budget by 74%. This is the department that funds local government, and naturally the cuts were passed on. Cambridgeshire County Council, for example, needs to cut £116 million from its budget in five years, including cutting 25% of social care funding. Yet Communities and Local Government takes no responsibility for social care, as it ostensibly belongs to the Department of Health. Unless I've misunderstood somehow, having completely seperate government departments funding and setting policy for such an important service is incredibly dangerous and counterproductive. CLG's sudden reductions in grants to local councils are putting vulnerable people in need of social care at great risk.
That's the national picture, horrifying in a dry statistical way. Contrast this with a personal experience. My Grandfather was born in 1920 and worked for the National Health Service as an administrator from the end of the Second World War until his retirement. He is 91 years old and my Grandmother, who is 85 years old, can no longer care for him, as she has been doing for many years. He is incontinent, can barely walk even with a frame, and has dementia. He was taken into hospital three months ago with an infection and has remained there since. The infection has cleared up, but the frailties of 91 years cannot be cured. The county council's social services have determined that my Grandmother cannot take care of him alone and he needs overnight care. However the county council do not provide overnight care at home. Whether this is a long-standing policy or a recent cut I'm unsure, but the result is that my Grandfather needs a place in a nursing home.
All the affordable care homes within a reasonable distance are full and have waiting lists, leaving my Grandfather in hospital limbo. He cannot be discharged as he cannot be cared for at home, so for the past few months he has been a textbook bed-blocker. Although he is generally quite content, this is an extremely upsetting and difficult situation for my family. My Grandfather does not need to be in hospital, but there is an acute shortage of the kind of care that he does need.
This is the reality of social care for the elderly today. There aren't enough places in nursing homes for people that need them. Even when places are available, quality of care is variable and sometimes totally disgraceful. Southern Cross demonstrates the ugly side of privatisation - when companies fail their customers suffer. A public service responsible for the lives and wellbeing of the frail elderly should never be allowed to fail. It should not be the case that you can only have a comfortable, secure old age if you can pay at least £500 a week for the privilege. I am ashamed that I didn't realise how bad things had become, and how much they may worsen as cuts continue, until my Grandfather needed care.
I was utterly sickened by Vince Cable's statement that the government wouldn't consider bailing out Southern Cross. Eight hundred and fifty billion pounds was spent bailing out the banks. £850,000,000,000. It was apparently worth propping them up despite their refusal to reform, but putting £230,000,000 towards the care of 31,000 of Britain's most vulnerable people is considered unreasonable. To put that in the clearest possible terms, the rent bill that Southern Cross is struggling to pay is less than 0.03% of the cost of the bank bailout. Southern Cross clearly acted in a financially irresponsible manner; so did the banks. But banking is not an essential public service, and care of the elderly is. I defy Vince Cable to look into the eyes of a ninety-one year old man and tell him that care homes don't deserve a bailout. I defy him to look into my eyes, the eyes of anyone with a frail elderly relative that they love, and say that care homes can be allowed to go bankrupt. Why should Vince Cable even make such a statement? He is Secretary of State for Business, Innovation and Skills. How does that position give him the authority to talk about care of the elderly?
The Council of Europe’s Commissioner for Human Rights recently criticised the UK's privatised social care model for failing the most vulnerable, which was reported with unusual forthrightness in The Telegraph. The government cannot continue to ignore social care and treat it as purely a problem for local councils. Major reform and investment are needed. As a society we need to face up to old age and give the elderly the care and dignity that they deserve. This is not a party political issue and there is no question of whether we can afford to care for our older generations. It is our fundamental responsibility as a society to do so.
I love my Grandfather and have so much to be grateful to him for. He helped to instill in me a social conscience and awareness of the importance of learning from history. He deserves so much better than his current situation and it makes me very angry that there's little I can do to improve it. Even if a care home place does finally turn up for him, it's incredibly worrying to think that he might get poor care or that the home could go bankrupt. At least my Grandfather has a wife, children, and grandchildren who love him very much and are doing our best to get him what he needs. I hardly dare think of how frail elderly people with distant or disinterested relatives, or no-one at all, cope with the current system.
National action is needed now to save social care from collapse, but I fear that the current government will continue to put austerity first. The Coalition insists that cutting public spending is their absolute priority. I disagree with this for many reasons, but what it really boils down to is that I think human rights are more important than the mirage of What Is Best For The Economy. Comfort and dignity in the last years of your life are rights, not products. In a country as rich as the UK this should go without saying. My Grandfather and his generation were my age when the government brought the welfare state into being. He worked throughout his life with the belief that the government would take care of him in his old age if he needed it. It's despicable to take away that safety net now that he does need it and no longer has the ability to fight for it. Those of us who can stand up for the right of the elderly to be cared for must do so. Not just for those who need it now, but to secure our own future wellbeing.
The British population is an ageing one. Government statistics state that between 1984 and 2009 the number of people aged 65 and over in the UK increased by 20% to 10.1 million. In 2009, 16% cent of the population were aged 65 and over. The number of people aged 85 and over more than doubled over the same period to 1.4 million and the percentage aged under 16 fell from 21 per cent to 19 per cent. People are living longer, which is cause for celebration. However, the public sector is not keeping pace with demographic change. It is inevitable that as the population ages, the cost of social care for the elderly will rise. It is already one of the largest chunks of county council expenditure, generally second only to education provision.
To date, the government's approach to social care strikes me as disgracefully negligent. The Department of Communities and Local Government took the largest budget cut of any government department in the Spending Review; their administration and programme budget reduced by 51% over three years and their capital budget by 74%. This is the department that funds local government, and naturally the cuts were passed on. Cambridgeshire County Council, for example, needs to cut £116 million from its budget in five years, including cutting 25% of social care funding. Yet Communities and Local Government takes no responsibility for social care, as it ostensibly belongs to the Department of Health. Unless I've misunderstood somehow, having completely seperate government departments funding and setting policy for such an important service is incredibly dangerous and counterproductive. CLG's sudden reductions in grants to local councils are putting vulnerable people in need of social care at great risk.
That's the national picture, horrifying in a dry statistical way. Contrast this with a personal experience. My Grandfather was born in 1920 and worked for the National Health Service as an administrator from the end of the Second World War until his retirement. He is 91 years old and my Grandmother, who is 85 years old, can no longer care for him, as she has been doing for many years. He is incontinent, can barely walk even with a frame, and has dementia. He was taken into hospital three months ago with an infection and has remained there since. The infection has cleared up, but the frailties of 91 years cannot be cured. The county council's social services have determined that my Grandmother cannot take care of him alone and he needs overnight care. However the county council do not provide overnight care at home. Whether this is a long-standing policy or a recent cut I'm unsure, but the result is that my Grandfather needs a place in a nursing home.
All the affordable care homes within a reasonable distance are full and have waiting lists, leaving my Grandfather in hospital limbo. He cannot be discharged as he cannot be cared for at home, so for the past few months he has been a textbook bed-blocker. Although he is generally quite content, this is an extremely upsetting and difficult situation for my family. My Grandfather does not need to be in hospital, but there is an acute shortage of the kind of care that he does need.
This is the reality of social care for the elderly today. There aren't enough places in nursing homes for people that need them. Even when places are available, quality of care is variable and sometimes totally disgraceful. Southern Cross demonstrates the ugly side of privatisation - when companies fail their customers suffer. A public service responsible for the lives and wellbeing of the frail elderly should never be allowed to fail. It should not be the case that you can only have a comfortable, secure old age if you can pay at least £500 a week for the privilege. I am ashamed that I didn't realise how bad things had become, and how much they may worsen as cuts continue, until my Grandfather needed care.
I was utterly sickened by Vince Cable's statement that the government wouldn't consider bailing out Southern Cross. Eight hundred and fifty billion pounds was spent bailing out the banks. £850,000,000,000. It was apparently worth propping them up despite their refusal to reform, but putting £230,000,000 towards the care of 31,000 of Britain's most vulnerable people is considered unreasonable. To put that in the clearest possible terms, the rent bill that Southern Cross is struggling to pay is less than 0.03% of the cost of the bank bailout. Southern Cross clearly acted in a financially irresponsible manner; so did the banks. But banking is not an essential public service, and care of the elderly is. I defy Vince Cable to look into the eyes of a ninety-one year old man and tell him that care homes don't deserve a bailout. I defy him to look into my eyes, the eyes of anyone with a frail elderly relative that they love, and say that care homes can be allowed to go bankrupt. Why should Vince Cable even make such a statement? He is Secretary of State for Business, Innovation and Skills. How does that position give him the authority to talk about care of the elderly?
The Council of Europe’s Commissioner for Human Rights recently criticised the UK's privatised social care model for failing the most vulnerable, which was reported with unusual forthrightness in The Telegraph. The government cannot continue to ignore social care and treat it as purely a problem for local councils. Major reform and investment are needed. As a society we need to face up to old age and give the elderly the care and dignity that they deserve. This is not a party political issue and there is no question of whether we can afford to care for our older generations. It is our fundamental responsibility as a society to do so.
I love my Grandfather and have so much to be grateful to him for. He helped to instill in me a social conscience and awareness of the importance of learning from history. He deserves so much better than his current situation and it makes me very angry that there's little I can do to improve it. Even if a care home place does finally turn up for him, it's incredibly worrying to think that he might get poor care or that the home could go bankrupt. At least my Grandfather has a wife, children, and grandchildren who love him very much and are doing our best to get him what he needs. I hardly dare think of how frail elderly people with distant or disinterested relatives, or no-one at all, cope with the current system.
National action is needed now to save social care from collapse, but I fear that the current government will continue to put austerity first. The Coalition insists that cutting public spending is their absolute priority. I disagree with this for many reasons, but what it really boils down to is that I think human rights are more important than the mirage of What Is Best For The Economy. Comfort and dignity in the last years of your life are rights, not products. In a country as rich as the UK this should go without saying. My Grandfather and his generation were my age when the government brought the welfare state into being. He worked throughout his life with the belief that the government would take care of him in his old age if he needed it. It's despicable to take away that safety net now that he does need it and no longer has the ability to fight for it. Those of us who can stand up for the right of the elderly to be cared for must do so. Not just for those who need it now, but to secure our own future wellbeing.
Wednesday, 16 February 2011
Numbers Game
If yesterday's Cambridgeshire County Council meeting was dramatised as a Hollywood movie, the trailer would sound a little like this:
Fifty-four councillors...
Nine and a half hours...
Two arrests...
£161 million cuts over five years...
ONE BUDGET
The full details of Cambridgeshire County Council's budget can be found here. I've been trying to digest what they mean. The meeting really did last until 8pm and was repeatedly held up by hecklers. Amongst all this kerfuffle, the council meeting discussed the budget by five service areas.
Children and Young People's Services will no longer be universal, but rather targeted at the most vulnerable. This includes Connexions, Youth Service, and Children's Centres. Services that are currently provided to all schools will also be targeted in this way, notably transport to school. Subsidies for music activities will end. Capital funding for new schools has all but disappeared, so the need for more school places 'may mean mobile provision in the medium term'. Non-urgent repairs and improvements to schools are to be delayed until more money becomes available.
Community and Adult Services take up the largest proportion of council spend, as it includes care for the elderly, disabled, and abused. Almost all adult social care services are already outsourced, so there is little the council can do to reduce their cost other than asking providers to find efficiency savings. The emphasis is on trying to prevent the need for costly care, by encouraging continued independence. The so-called 'offer to users', in other words the extent of support available, will reduce by 25%.
Community and Adult Services also includes libraries, which will see a 40% cash reduction in their budget over five years. 13 libraries in the county are under review; if they cannot be integrated with other local services or run by communities, they will close by April 2012. The frequency of mobile library visits will be reduced by 50%.
Environment Services cuts include the complete phasing out of bus subsidies, reduced road maintenance, fewer road safety campaigns, and the removal of universal road safety education in favour of targeting 'accident clusters'. The Trading Standards service will be restructured and reduced. Spending on the environment and climate change will be cut by nearly half a million.
Corporate Services includes the back office stuff like coroners, customer service, scrutiny, and democratic services. All of those areas are being reduced, as well as communications, emergency planning, and IT (which will cease to exist as a separate team and be cut by 35%). This rather unsettling phrase sums it up: 'there will be a move towards greater self-sufficiency and uniformity'. Opening hours for contact centres will be reduced, with the aim of ensuring as many people as possible get information online. The council will stop publishing magazines, reduce building maintenance by 38%, and stop any work on energy management. Several offices will be closed.
The final service consists of everything shared with Northamptonshire County Council, in a scheme that was designed to save money before anyone even knew to fear Eric Pickles. It covers things like legal services, human resources, finance, and procurement. Cost savings will be squeezed from here too, by reducing management and improving use of technology.
The documents available to the public don't specify which services the 450 council employees are being made redundant from. The answer is all of them.
Councillors obviously had incredibly difficult decisions to make, faced with £50.4 million savings to be found in a single year. Towards the end of this epic meeting, though, they really misjudged the public mood by overwhelmingly voting against a 5% cut in their allowances, proposed by the single Green councillor. If life was indeed a Hollywood film, at this point someone would have stood up and made a stirring speech about how we're all in this together and the motion would have carried. However this is the real world and the meeting did not end on such a happy note. So if you live in Cambridgeshire, make the most of your local library, rural bus services, specialist teaching, and transport to school now. Soon they will be replaced by the Big Society, or not.
Fifty-four councillors...
Nine and a half hours...
Two arrests...
£161 million cuts over five years...
ONE BUDGET
The full details of Cambridgeshire County Council's budget can be found here. I've been trying to digest what they mean. The meeting really did last until 8pm and was repeatedly held up by hecklers. Amongst all this kerfuffle, the council meeting discussed the budget by five service areas.
Children and Young People's Services will no longer be universal, but rather targeted at the most vulnerable. This includes Connexions, Youth Service, and Children's Centres. Services that are currently provided to all schools will also be targeted in this way, notably transport to school. Subsidies for music activities will end. Capital funding for new schools has all but disappeared, so the need for more school places 'may mean mobile provision in the medium term'. Non-urgent repairs and improvements to schools are to be delayed until more money becomes available.
Community and Adult Services take up the largest proportion of council spend, as it includes care for the elderly, disabled, and abused. Almost all adult social care services are already outsourced, so there is little the council can do to reduce their cost other than asking providers to find efficiency savings. The emphasis is on trying to prevent the need for costly care, by encouraging continued independence. The so-called 'offer to users', in other words the extent of support available, will reduce by 25%.
Community and Adult Services also includes libraries, which will see a 40% cash reduction in their budget over five years. 13 libraries in the county are under review; if they cannot be integrated with other local services or run by communities, they will close by April 2012. The frequency of mobile library visits will be reduced by 50%.
Environment Services cuts include the complete phasing out of bus subsidies, reduced road maintenance, fewer road safety campaigns, and the removal of universal road safety education in favour of targeting 'accident clusters'. The Trading Standards service will be restructured and reduced. Spending on the environment and climate change will be cut by nearly half a million.
Corporate Services includes the back office stuff like coroners, customer service, scrutiny, and democratic services. All of those areas are being reduced, as well as communications, emergency planning, and IT (which will cease to exist as a separate team and be cut by 35%). This rather unsettling phrase sums it up: 'there will be a move towards greater self-sufficiency and uniformity'. Opening hours for contact centres will be reduced, with the aim of ensuring as many people as possible get information online. The council will stop publishing magazines, reduce building maintenance by 38%, and stop any work on energy management. Several offices will be closed.
The final service consists of everything shared with Northamptonshire County Council, in a scheme that was designed to save money before anyone even knew to fear Eric Pickles. It covers things like legal services, human resources, finance, and procurement. Cost savings will be squeezed from here too, by reducing management and improving use of technology.
The documents available to the public don't specify which services the 450 council employees are being made redundant from. The answer is all of them.
Councillors obviously had incredibly difficult decisions to make, faced with £50.4 million savings to be found in a single year. Towards the end of this epic meeting, though, they really misjudged the public mood by overwhelmingly voting against a 5% cut in their allowances, proposed by the single Green councillor. If life was indeed a Hollywood film, at this point someone would have stood up and made a stirring speech about how we're all in this together and the motion would have carried. However this is the real world and the meeting did not end on such a happy note. So if you live in Cambridgeshire, make the most of your local library, rural bus services, specialist teaching, and transport to school now. Soon they will be replaced by the Big Society, or not.
Friday, 24 September 2010
Can't Someone Else Do It?
Not long ago, Suffolk County Council announced their intention to outsource everything that they do. I have a personal interest in this as much of my family live in Suffolk, but also find it an interesting idea conceptually. For the sake of argument, why not outsource all services and just leave a few council employees in a commissioning role? There are a number of implications:
When thinking this through, you start to wonder why have a county council in the first place. The two-tier local council system in much of England is very unwieldy and creates a lot of duplication and wasteful political manuvering. Not that many people are aware of how local services are carved up between district and county councils, because it's arbitrary and not particularly interesting. For reference, Suffolk County Council and its peers have the following responsibilities:
Many county councils also do the following:
The variety and complexity of these services, and their interdependencies with services provided at district level, have resulted in county councils employing many thousands of people. Suffolk's decision to divide all these services up into packages and outsource them in three phases is (to borrow a phrase from Sir Humphery Appleby) brave. Given the overriding need for 30% budget cuts, some outsourcing is inevitable. There are areas of duplication that could be cut, nice-to-have projects that are no longer affordable, and great potential for pooling resources with other public sector organisations (sharing HR and admin functions with other councils, for example).
What Suffolk is proposing is an order of magnitude more ambitious than that. It has decided to entirely divest itself of all services within the next two years. It would be amazing if that timeframe is even legally possible. I strongly feel that the council should proceed more slowly, first piloting the outsourcing scheme with smaller and less risky services. Contracts will need to be negotiated very thoroughly, be open to public view (this is definitely not current practise), and include clear penalties for inadequate quality of service.
Suffolk's report into their 'New Strategic Direction' suggests that outsourcing everything will strengthen local democracy, make services more responsive, and give communities more capacity to take control of their lives. All three claims look dubious to me. The report talks of councillors providing strategic direction, but in reality once contracts with companies are signed, they will have no further influence. Unless the intention is continual contractual review and renegotiation (time-consuming, inefficient, & wouldn't address the public-private legal expertise imbalance), for years at a time local councillors would have no grounds to interfere with the way services are managed. I've never met a local councillor who would be satisfied with that. In fact, I think most would be apoplectic.
Moreover, there are some services that I'd be uncomfortable with outsourcing as a matter of principle. The protection of abused children and vulnerable adults should not be something that companies profit from, there is too much of a moral hazard at stake. Company law states that private companies have a duty to maximise returns for their shareholders; this duty is not overriden by the moral imperative to protect children and adults at risk.
Suffolk County Council are to be commended for taking the Big Society to its logical conclusion, and thus focussing the debate about what local authority cuts will really mean. Reading their report, though, makes it clear that the full implications of outsourcing have not been considered. Local Councillors don't seem to get that they are making themselves impotent and irrelevant, as well as ridding themselves of the people who set up their meetings, write papers, type up minutes, and make them coffee. I presume that in the fullness of time they will start doing these tasks themselves, before eventually realising that their jobs have become pointless. Whereupon they will outsource themselves to a local newspaper columnist, and the privatisation of Suffolk County Council will be complete. According to their timetable, this can be expected in September 2012.
For further comment on the Suffolk experiment try the Guardian, BBC and East Anglian Daily Times.
EDITED TO ADD I've just found a very interesting blog post on this by Flip Chart Fairy Tales.
- Cost.
The tacit assumption here is that the private sector can provide services more cheaply than the public sector. This may or may not be true. Yes, the private sector is profit motivated and therefore supposedly more efficient. But companies will not provide a service if they can't make a profit. If local services are privatised, council tax revenues will pay for private sector profits. Is that something people are ready to face up to? - Quality of service.
This will be entirely dependent on contractual negotiations. I mean no disrespect to local government procurement, but the private sector have better lawyers and fewer scruples. I've undertaken procurement before, and it is a tricky business even when the contract is relatively small and short-lived. For a recent example of what happens when contractual negotiations go wrong, see the saga of the Cambridgeshire Guided Busway. - Local Enterprise.
The outsourcing debate involves frequent reference to social enterprises and community groups doing things for themselves. But let's not kid ourselves. A multi-million pound road maintenance contract is going to go to the lowest bidder, and that's going to be a big company with economies of scale. Outsourcing will not necessarily cause a flowering of local enterprise. Local authorities are not legally allowed to favour local companies over others when undertaking procurement, and in the current financial situation the lowest bidder is going to win. The lowest bidder is unlikely to employ a lot of local people, or indeed a lot of people period. - Partnership.
County councils don't work in a vacuum. They have a constant need to talk to district councils, police, health services, and local residents, to name but a few. Indeed, they have legal duties to do so. Although working in partnership is time-consuming and can often seem very unwieldy, when it doesn't happen the results are often disastrous. Witness the recent cases of vulnerable children slipping through the cracks as social services failed to communicate with police and healthcare colleagues. When two (possibly competing) private companies are involved, can a reasonable level of partnership working happen? Can co-operation be secured contractually, or will the private sector just pay it lip-service? - Accountability.
This is by far the biggest issue. If all local services are contracted out, accountability will be entirely contractual in nature. The private sector is not democratically answerable to local people, except through the media. Where does this leave local councillors? They will in effect be entirely useless, and might as well not exist. Their constituents will come to them with the usual complaints about bin collection, potholes, and leisure centres, which they will have absolutely no way of addressing (beyond suggesting that they call the relevant company's helpline).
When thinking this through, you start to wonder why have a county council in the first place. The two-tier local council system in much of England is very unwieldy and creates a lot of duplication and wasteful political manuvering. Not that many people are aware of how local services are carved up between district and county councils, because it's arbitrary and not particularly interesting. For reference, Suffolk County Council and its peers have the following responsibilities:
- Building & maintaining schools
- Caring for vulnerable children (fostering, adoption & children’s homes)
- Caring for vulnerable adults (the elderly, disabled, & seriously ill)
- Building & maintaining roads & cycleways
- Collecting rubbish from homes & businesses, recycling it, & managing waste sites
- Building & running libraries & community centres
- Registering births, deaths, & marriages
- Managing (some) green open spaces
- CCTV & community safety
- Electoral services
- Implementing trading standards & investigating fraud
- Providing advice on planning policy & planning applications
- Archaeology & conservation of the historic environment
- Prevention & response to surface water flooding
- Pest control & animal welfare
- Management of public rights of way
- Planning the future need for all the services listed above
Many county councils also do the following:
- Support economic development in the local area
- Encourage more sustainable living by promoting recycling, non-car travel, etc
- Regeneration projects
The variety and complexity of these services, and their interdependencies with services provided at district level, have resulted in county councils employing many thousands of people. Suffolk's decision to divide all these services up into packages and outsource them in three phases is (to borrow a phrase from Sir Humphery Appleby) brave. Given the overriding need for 30% budget cuts, some outsourcing is inevitable. There are areas of duplication that could be cut, nice-to-have projects that are no longer affordable, and great potential for pooling resources with other public sector organisations (sharing HR and admin functions with other councils, for example).
What Suffolk is proposing is an order of magnitude more ambitious than that. It has decided to entirely divest itself of all services within the next two years. It would be amazing if that timeframe is even legally possible. I strongly feel that the council should proceed more slowly, first piloting the outsourcing scheme with smaller and less risky services. Contracts will need to be negotiated very thoroughly, be open to public view (this is definitely not current practise), and include clear penalties for inadequate quality of service.
Suffolk's report into their 'New Strategic Direction' suggests that outsourcing everything will strengthen local democracy, make services more responsive, and give communities more capacity to take control of their lives. All three claims look dubious to me. The report talks of councillors providing strategic direction, but in reality once contracts with companies are signed, they will have no further influence. Unless the intention is continual contractual review and renegotiation (time-consuming, inefficient, & wouldn't address the public-private legal expertise imbalance), for years at a time local councillors would have no grounds to interfere with the way services are managed. I've never met a local councillor who would be satisfied with that. In fact, I think most would be apoplectic.
Moreover, there are some services that I'd be uncomfortable with outsourcing as a matter of principle. The protection of abused children and vulnerable adults should not be something that companies profit from, there is too much of a moral hazard at stake. Company law states that private companies have a duty to maximise returns for their shareholders; this duty is not overriden by the moral imperative to protect children and adults at risk.
Suffolk County Council are to be commended for taking the Big Society to its logical conclusion, and thus focussing the debate about what local authority cuts will really mean. Reading their report, though, makes it clear that the full implications of outsourcing have not been considered. Local Councillors don't seem to get that they are making themselves impotent and irrelevant, as well as ridding themselves of the people who set up their meetings, write papers, type up minutes, and make them coffee. I presume that in the fullness of time they will start doing these tasks themselves, before eventually realising that their jobs have become pointless. Whereupon they will outsource themselves to a local newspaper columnist, and the privatisation of Suffolk County Council will be complete. According to their timetable, this can be expected in September 2012.
For further comment on the Suffolk experiment try the Guardian, BBC and East Anglian Daily Times.
EDITED TO ADD I've just found a very interesting blog post on this by Flip Chart Fairy Tales.
Tuesday, 10 August 2010
Striking A Balance
In the spirit of austerity, I've been on staycation for a week. I spent half the time with my family in the wilds of East Anglia. Although I was deliberately trying to keep my brain off matters political (I virtually stopped checking the Guardian website, even), the change of scene did make me consider how localism and the Big Society might operate differently in rural and urban areas.
But that post hasn't quite formed in my head yet. At the moment it's the holiday season, so the office is quiet and edicts from politicians have slowed to a trickle. This provides a helpful opportunitity to consider the implications of what's been announced so far. To this end, I've discovered a fun new toy, the Essex County Council Budget Maker.
This webpage sets out the fact that to keep up the 2009/10 level of service for the county, Council Tax would have to rise by 14.1% to balance out the government's cuts in grants. Apart from being somewhat politically contentious, this would be impossible. The June Budget froze council tax for next year. So, what to cut? My approach was to go through the service headings and shave what I'd consider a reasonable amount off each. I tried to protect care for young & old people, as well as skills budgets (vital given current levels of unemployment), but didn't increase spend on anything.
My budget was completely unaffordable; it would have required a 6% rise in council tax. Somewhat depressed, I then systematically shaved a percentage point off every sector until I got it in balance. I was harshest to Olympic Legacy (22% cut), Essex Championed (17% cut - these functions strikes me as something that could be integrated into other services) and transport infrastructure (12% - no major investments for a while). Despite those high cuts, schools took a 4% hit, as they're by far the biggest cost in the whole budget.
In my view, Essex County Council have hit on a very useful communication tool here. Recent research shows that most of the population still don't realise how deep cuts will bite. Their widget lets you play with a large council budget, bringing home just how difficult the prioritisation decisions of local councillors and senior officers are going to be. I wonder if Cambridgeshire County Council would consider creating one of these?
In the meantime, I suggest that you have a go yourself.
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