Monday, 20 October 2014

Leese on London: DevoManc beats London's governance structures

The Leader of Manchester Council on London's constitutional settlement vs DevoManc:
London under its current structures can't do what Greater Manchester can do which is not only to support job-creating growth but also reorganise public services around people, their families and the places they live rather than in traditional service silos. London's problem is that it has a two tier structure. The Mayor is responsible for economic development, transport, police and not a lot else if you exclude self-promotion. The thirty two London boroughs and the City of London Corporation are responsible for all the other things a council like Manchester does.

Thursday, 16 October 2014

Camden's cuts challenge 8 - Camden Graph of Doom

Camden's 'Graph of Doom'
While the last round of cuts (2010-2014) was difficult the Council was able to protect services by developing alternative solutions.  This time we must go further.  We are reviewing over 100 different council services. Those that don’t face substantial reductions could face fundamental change.

The table to the side illustrates this in a new way - our version of the Barnet 'Graph of Doom'. Our projections based on decreasing revenue grant from the government, changes to local government finance and demographic pressures mean that by 2020 we will have effectively run out of money for all other services apart from the core services of waste/recycling, adult social care and safeguarding children.

The ways we can address this include:

  • cutting costs generally via outcomes-based budgets
  • controlling demand for services (e.g. changing eligibility)
  • automation and new technology (e.g. digital self-service for all those who can use internet)
  • ensuring that these core services are made as efficient as possible and reducing spend (services not 'gold-plated')
  • raising revenue and income such as commercial rents, fees, Council Tax (note many government rules restrict this)
  • growing our business rate base from new sites on brownfield land or new employment space created, for example, in taller buildings and guarding against any loss of businesses (note that the office-to-resi planning changes go directly against this and there is a trade-off with other needs like building new homes)
  • Delivering more services and solving problem sub-regionally, as advocated by London Treasurer's this week.
All of these involve difficult decisions and trade-offs.  

Tonight Camden hosts a roundtable event to discuss the future of public services and how they can be delivered differently in the future.

In the face of unprecedented reductions in public service expenditure, growing inequality and uneven economic growth across Britain, there is increasingly active discussion about how public services should be delivered in the future, by whom, and at what ‘level’. The broad direction of travel is towards greater decentralisation, with budgets, governance and responsibility for delivering outcomes devolved to local authorities, Local Economic Partnerships (LEPs), other local partners and communities themselves.

Camden is proud to provide some of the best public services in the country. We want to continue that tradition and believe that the public service reform agenda means that we have to find radical new ways of delivering services for local residents: an ongoing commitment we have made in the Camden Plan. 

Tuesday, 7 October 2014

On the Mansion Tax - Londoners support but estate agents and Tories don't

Proposals for a new Mansion Tax start to address the unfairness of property taxes in this country, but we need to see the detail.

Property taxation in the UK is outdated and arbitrary: Council Tax bands are set by Whitehall and reflect prices set in 1991 but they can't change without a wholesale revaluation, a massive exercise which SW1 politicians bottle.  

The current system does not take into account the huge hike in values enjoyed by many homeowners and recent property investors.  

No one yet knows the full detail of the proposals, like at what point the tax will be paid, but there should be consideration for those likely to be cash poor and asset rich, like some pensioners.

But reducing the deficit or paying for public services should be a duty for everyone, not just low and middle earners.   

The majority of Londoners support the Mansion Tax but estate agents Knight Frank, (who presumably profit more from the international market in London than any increase in sales a Mansion Tax would bring in terms of commission) don't and neither do the Tories (although according to the Yougov poll, their support is split).

In the past Camden Labour has argued that any Mansion Tax should be used to support council house building in the areas it is raised from.  We've proposed that Stamp Duty should also be spent locally for new homes:  this is opposed by the government, as too is our increase in Council Tax on furnished homes left empty by speculators.

Due to the high costs associated with the top-down re-organisation of the NHS and rising waiting times we understand why hospitals needs more funding, but in line with the principles set out by the recent devolution debate it's fair that should be a link between money raised in Camden and money spent on local services.

Wednesday, 10 September 2014

Camden's cuts challenge - post 7 - outcomes-based budgeting is for bad times and good

Another advantage of moving to outcomes-based budgeting is it's ability to react both to austerity and to more favourable settlements. 

Compared to salami-slicing (cutting a % from each service), an outcomes-based approach to budgeting is evidence-led, and means that resources are allocated in order to achieve agreed priorities.
A traditional salami-slicing approach to allocating savings means that all areas receive a similar proportion of cut, regardless of the consequential effect on services or on the contribution of the service to key outcomes. 

It’s a short-term approach that can lead to long-term problems. Services can become unsustainable over time as they respond to repeated ‘one off’ savings requirements rather than undergo strategic reform.  They can also become ‘top heavy’ with too many managers and senior staff, not responding to the revised needs of an organisation that has shrunk significantly over a few years.

Austerity means it’s more important than ever to target resources in the areas they are most effective, not just doing less of everything.

But conversely, an outcomes approach to budgeting links resource allocation directly to strategic objectives based on evidence of what succeeds.  This evidence base means that there is a strong correlation between the resource allocated and the expectation of what outcomes will be achieved.  

Therefore if the funding envelope changes the organisation can respond by varying the scale of investment in order to achieve more of an outcome or to achieve it quicker, or if required to scale back investment in outcomes that are of less high priority, and can do this with an understanding of what the effects will be. 

Camden's cuts challenge - post 6 - how we are talking to local people

No plan to tackle the massive cuts can be put forward without speaking to residents and local organisations.

Here's a short video explaining the challenge and what we will be doing over the next month:

September and October
During this period we will set out the scale of the challenge and start a discussion about how services might have to change, e.g. how we deliver them differently for less money and how we focus resource better.

This will involve a range of initiatives:

Public meetings - including local budget meetings/AAGs and forums for specific groups.

Service user group - we've already set up meetings with various groups to specifically explain the cuts and how they relate to them (e.g. Learning Disabilities Forum, Youth Council, Faith Forum etc).

Roadshows - these have started and will continue through to October in locations ranging from supermarkets to libraries and community centres.   Camden in Focus events run by the housing department have already started in Regents Park, Kings Cross and West End Sidings.

Written submissions - every household the chance to give their initial views and send their thoughts back by a free-post pull out in the Camden Magazine.

Online -  there are a number of ways for residents to give their views online, including an online survey tool created by local tech initiative VoxUp.

Meetings are all being advertised in a range of ways including the Camden Magazine, posters, direct emails and letters to interested groups and residents and tweets.  We'll try and reach as many people as possible but please help to spread the word.

Feedback will inform our proposals to be published in advance of the December Cabinet meetings.

November - December
We will be clearly and transparently communicating to residents what they have been telling us through September and October.  Actual proposals to balance the budget will be published in the normal way before the 17 December Cabinet meeting and public scrutiny from councillors at the Council will happen on 16 December.

January onwards
This will be when we start the process of formal consultations on specific service changes - we can't say exactly what the timetable will be because those decisions haven't yet been made.

Camden council will set the first of three annual budgets which will close the £70m gap by 2017.

Tuesday, 26 August 2014

Camden's cuts challenge - post 5 - why set a long-term budget?

To deal with the extremely challenging financial deficit, as in 2010 Camden is proposing a three year financial strategy.

This means that the three annual budgets set by Camden's Full Council will follow a long term plan outlined in December 2014. 

Long-term planning has numerous advantages over the year-on-year approach tradtionally used by some councils.

First, it means that council spend a significant portion of any year scrambling to find and agree the required spending cuts to balance to following year's budget. This is not an effective use of strategic resource and prevents leadership focusing on the things that matter most for residents.

Second, Annual budgeting can also mean that resources reduced in an ad hoc way across the board. Long term budgeting allows the organisation to consider the funding available for a service and make sure that decisions are made in a more informed way.

Third, long term budgeting provides much greater degree of certainty and allows the organisation to plan and implement changes in a logical and planned way. For example, in Camden we have focused 2015/16 savings on efficiencies so that we have more time to plan for the more radical or challenging savings required in the years beyond.

Fourth, it also matters to our public servants.  The level of austerity cuts mean that significant job losses are inevitable.  In the 2010-14 period we lost 970 posts and large numbers beckon again.  Long term budgeting means that most affected staff will only go through one significant change process in the period.  Under an annual approach they may be subject to the uncertainty of service reviews more often, possibly each year.  To maintain the our services with experienced and committed employees our approach will provide a better way of doing things.  

Fifth, It also fits with our new approach to budgeting, described in a previous post.  Our outcomes approach to budgeting links funding directly to evidence of what succeeds. This evidence-base means that there is a strong correlation between the resource allocated and the expectation of what outcomes will be achieved. Therefore if the funding changes the organisation can respond by varying the scale of investment in order to achieve more of an outcome or to achieve it quicker, or if required to scale back investment in outcomes that are of less high priority, and can do this with an understanding of what the effects will be. This just isn’t possible with the repeated use of a one-off approach to delivering savings.

Finally, a long term budget is a response to the length of austerity budget which, by 2017, will be in their 7th year.  Critics of the public sector often make comparisons with the private sector, but tell me how many private firms deal with the same amount of reductions without being taken over, merged or fail?  None of these options are open to councils charged with delivering services, often universally, often by law. 

Of course, the political pressure on Labour councils from the left will be to avoid setting long term budgets (a.k.a. implementing cuts) in the expectation that an incoming Labour government will 'turn the taps back on.' 

I've argued elsewhere that this is unlikely.  The Labour frontbench is looking at how we can spend money better - looking at all of the money available locally, rather than just by local government grant and how it can be better planned. 

This doesn't mean we can't make a strong case and protest about the cuts and their impact. Certainly a Labour government should reverse the unfair redistribution of funding away from poorer areas to richer ones, as highlighted by the Guardian yesterday.  

Fundamentally local council services compete with hospitals and schools for resource.  Sadly, it is likely that both Conservatives and Labour will maintain some sort of ring-fence protecting health and education funding within their deficit reduction strategies in the next few years.  

So if non-protected areas such as local government are likely to continue to bear the brunt of deficit reduction plans - then we need better long-term plans in place to spend the money we have and control other local funding as well. 

Thursday, 21 August 2014

Camden's cuts challenge - post 4 - poll discussion: who is to blame for the cuts?

Yesterday I wrote for Progress on cuts and the need for more decentralisation of powers from Whitehall.  Those in Labour local government who have been working hard throughout the summer on next year's budgets know that this round of cuts promises to be more punishing than the last - because most of the early efficiencies have already been taken and there is much more pressure on services.

Urban and deprived areas have been hit the hardest, due to changes in government funding formula, meaning that these areas will see more reductions or substantial changes in services like local libraries, street cleaning, homelessness, apprenticeship schemes and youth work. 
There will also be significant job losses.  
‘Salami-slicing’ funding from services hoping they will survive won’t work - it’s more likely that where services don’t change, they could close.
What do the public think? A YouGov poll released today asked people about who they thought responsible for the continuing cuts.  The results are not as clear cut as you might think - 
  • 40% think "Central government is mainly responsible, because it is cutting sharply the money it gives to the council where I live
  • 26% think "My local council is mainly responsible, because it could achieve most of the savings it needs by cutting costs, without cutting services"
  • The remainder are not aware of cuts/don't know.
Labour and Lib Dem voters in 2010 are more likely to blame central government, much Tories less so.  There's also a gender gap and a slight difference in awareness between London and other regions.

Locally here in Camden this poses an interesting dilemma for the retreating Lib Dems - their attack on council cuts, evident in the run-up to the election is out-of-step with people who vote for them.  For the Camden Conservatives, it's more straightforward - the people who vote for them are more likely to think that it's all the fault of the Town Hall (interestingly more Tory voters also feel that they haven't experienced any cuts).    
The poll underlines what some have suspected: outside of the SW1 bubble, in a different economic context and with 'round one' of the cuts over, don't assume people will see responsibility for austerity as intensely as they did in 2010 - or even that awareness is that high.
Next to the economy and the NHS, funding for local public services threatens to become part of the dominant narrative of the 2015 election for Labour.  There is, of course, an inter-play between all three: simply put, extra money for the NHS means less money for other areas of spending, like local government.   ‘Turning the taps back on’, as some argue on the left, raises a question about management of public finances which is central to that of economy competence.  (Note that the high point of spending for local services was in 2008, seven years from the 2015 ballot).
With over 70% of funding for local services reliant on central government, and that funding being cut dramatically - it's not just Town Halls who have a job to explaining how local public services are funded, Westminster politicians will.