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.

Tuesday, 12 August 2014

Camden's cuts challenge - post 3 - Camden's 4 spending tests for Budget 2015

Alongside the Outcomes-Based Budgeting approach set out in the last post, we wanted to create a framework for spending decisions which could be more easily understood by the public than last time.  

In the 2011 Budget, like others, we adopted a general test to 'protect the most vulnerable' and, generally speaking, then proceeded to cut all service budgets by approximately 20% (except for early years, which we cut by only 10%).

Through the next round of budget cuts we wanted  to take a less hurried approach, setting out how decisions would to a greater or lesser extent meet the tests below.  So in order to provide clear principles against which options, recommendations, and choices regarding investment decisions can be measured, in July the Council proposed a number of Investment Tests. These Tests are consistent with the aims of the Camden Plan and Finance Strategy and will act as reference point for  residents through the autumn that will inform many of the difficult decisions  as our funding continues to decrease.      

The idea was developed as a response to the tests set out in Fabian Society Commission on Future Spending Choices last year.   

The four Investment Tests are as follows:

Test 1: Tackle Inequality 
Inequality blights lives and creates a financial burden for taxpayers in future years. Camden's Equality Taskforce sets outs how growing inequality has social costs and is unfair. Tackling inequality and ensuring Camden is a place for everyone is at the heart of the Camden Plan. A key test for spending decisions will be 'how does investment reduce inequality among our residents'?

Test 2: Focus On Outcomes 
The financial strategy will implement a new way to budget resources based on aligning our spending choices to the outcomes we want to achieve. Services will work backwards from the outcomes set out in the Camden Plan, and then ask how these can be realised by working together across the council, and with other partners and residents. The Council will work more creatively with local people to achieve our goals, make greater use of technology, and be better at sharing assets with other partners to make them go further. Investment decisions will be made that will have the greatest impact on improving the lives of Camden's people. The key test will be ‘How does investment meet these outcomes?’

Test 3: Invest in Early Intervention Where Possible and In The Capacity to Act Decisively Where Necessary 
The Council will save money in the long-term by focusing on prevention and the cause of problems wherever possible, rather than just managing acute demand when it arises. This is cheaper, more sustainable, and leads to better results for everyone. However, we recognise that we will need to maintain some acute services to help resolve serious problems, even when the focus on early intervention reduces demand. We will make better use of the council's data and work to ensure early intervention is targeted where it has the biggest impact. We will reach beyond the end of the Camden Plan taking on board climate change, our demographic changes and the impact of the Digital Revolution. The key test will be ‘How does investment focus on prevention’?

Test 4: Make Every Pound Count
Left unchecked, organisations can become risk-averse or make perverse decisions. Making every pound count means improving productivity by providing effective solutions to residents’ issues. Problem-solving for the benefit of local people and getting it right first time will be hard-wired into everything the Council does. The Council will continue to make the best use of its assets, protect the public's money at all times and seek out opportunities to generate income to support public services. The key test will be ‘How effective is the investment?’

Camden's cuts challenge - post 2 - Outcomes-Based Budgeting

My first post on Camden's new strategy to meet another round of austerity budgets was set out here.  This set out the scale of the challenges and new measures we have undertaken to meet them.

Camden's new Outcomes-Based Budgeting (OBB) approach ensures that not only does the Council meet its financial challenges but that it still delivers the core objectives set out in the Camden Plan.  As the chart below illustrates, it marks a departure from traditional 'incremental' budgeting, especially when combined with a new approach to 'systems thinking.' 

Whilst the traditional approach to budgeting focus on incremental changes in detailed departmental categories of expenditure, the OBB process creates the potential for more innovative solutions just when we need them. 

So for example when we consider how we support communities, one option is that rather than simply investing in services run from many public buildings in one area, we'll look at how we can work with partners and other agencies, social enterprises and community organisations.  

While reducing investment is undoubtedly a difficult decision, it is preferable to closure and enables the council to save money while maximising the impact of the reduced investments that we make.

The Council has undertaken an evidence based analysis to collate the activities performed by each team across the Council, and to map how these activities contribute to the delivery of key strategic outcomes.  As well as the outcomes listed explicitly in the Camden Plan officers have used the data analysis to add outcomes that fully capture the work of the organisation, e.g. the core requirements to fulfil statutory obligations and provide good governance.

Each outcome was allocated a specific Delivery Lead in the council, who has worked in conjunction with a support team consisting of officers from operational services, Finance, Strategy, and Performance to develop alternative medium-term investment choices through which the Council could seek to achieve our strategic outcomes under a range of funding reductions - 'low', 'moderate' and 'substantial.' 

Over the summer preliminary meetings have been held with Cabinet members and officers to develop proposals to meet the £70m deficit based on this new model.  

Such is the challenge that all discussions we have had contain proposals for reducing, changing or stopping services.

Monday, 4 August 2014

Camden's cuts challenge - post 1 - the background to our next Budget

This will be the first in series of posts over the next few months where I will give some observations on the very difficult process Camden councillors and others are going through when setting the budget for local public services over the next 3 years.

First of all, a recap and some background.

In 2014/15 the Council will spend around £858m. This is bigger than lots of corporate businesses and we provide hundreds of important services.   The majority of council funding (72%) has historically come from central government. In recent years there has been significant change to the services Councils provide, for example, with the transfer of Public Health from the NHS in 2013/14, and to the way we get our funding.  

The Council has limited or in some cases practically no control over much of the money it spends. Of the £858m total spend, for example, £195m is spent on Housing Benefit payments according to government eligibility criteria, and £185m is ring-fenced for Schools spend.  Council Tax makes up only a small portion (10%) of the overall money we receive to provide services.

Over the last four years, austerity measures have changed the shape and size of Britain’s public services. 

The Government’s Comprehensive Spending Review 2010 was the beginning of the largest cut in government spending for local authorities since the Second World War.  

Despite an improving economic picture nationally, local government has never faced a tougher financial climate with all local authorities forced to make difficult decisions about how to continue to deliver for local residents. 

The scale of public spending retrenchment the country faces means that local authorities across the UK have to make exceptionally tough choices; removing or reshaping some services in order to protect others.

I strongly suspect the government has not fully understood the impact of another 3 years of full austerity to local public services - will cuts announced from 1 April 2015, weeks before a General Election.

Here's how it plays out in Camden.  

In 'phase one' (up to 2014/15) like-for-like external funding from Whitehall reduced by 28% from 2010/11 levels. 

By 2017/18 the cumulative like-for-like reduction with 2010/11 funding is expected to be around 48%. The stark reality of our financial settlement means we will need to save an extra £70m a year by 2018: a total of £163m off our budgets - the 8th worst impacted in England.

In the first phase of these cuts, most local authorities focused on traditional cost reduction approaches and the delivery of operating efficiency gains. Camden opted for a different approach making large reductions in some areas (including some support services) in order to protect others.  

To a large extent Camden’s approach was resiliently delivered and the aim to protect the most vulnerable largely achieved, see for example research undertaken by the LSE (but also see Young Foundation for a different perspective).  

While these cuts were made using long-term (rather than just annual) budgeting - and a focus on protecting the most vulnerable - they were in a recognisably traditional form - 20% of all service budgets.  However, during this process we became concerned that traditional savings reviews lacked the sophistication to look beyond predicted budgets and explore all activity that contributes towards an outcome. 

Note that our situation is worsened by the increased pressure of an ageing population and rising demand for key services (more on this in later posts).    

Anticipating that further austerity budgets would challenge this approach - could we carry on 'salami-slicing?' - we started to develop a different approach which would allow us to target money on where its impact mattered most.    

So in 2012 Camden's approach to austerity became more focused on core values and objectives, as a result of the development of the Camden Plan.  This laid out our ambition to address some of the most challenging social issues that we have struggled with for decades, while continuing to deliver high quality services for local people.  From 2012 our future spending decisions were therefore informed both by the need to balance our budget and by the wider aims and aspirations presented in the Plan, namely:
  • developing new solutions with partners to reduce inequality, 
  • creating and harnessing the benefits of economic growth,  
  • ensuring sustainable neighbourhoods, 
  • providing democratic and strategic leadership and 
  • delivering value for money services by getting it ‘Right First Time’. 
In 2013 we launched the Equality Taskforce - a version of the 'Fairness Commissions' undertaken elsewhere - which went further than the Camden Plan in examining how, with limited funding, public services could best impact on inequality.  

The Taskforce identified that preventative services with a specific focus on attainment, housing, employment, and community resilience were key levers by which inequality could be reduced. Through intervention in these areas it was proposed that the Council and its partners could have a real impact, securing improvements including increased availability of quality affordable housing, improved achievement at school and increased local employment prospects.

Developing a sense of 'real impact' of spending triggered a move away from traditional departmental budgeting and towards Outcomes Based Budgeting - where all funding is treated as 'investment' towards delivering the outcomes agreed in the Camden Plan.

This methodology therefore led to proposals which we think will facilitate a better use of Council 'levers' such as housing, procurement, technology and governance arrangements with other local public services. 

This process has culminated in a basket of proposals for Camden's elected representatives to consider which would simultaneously address our need to reduce expenditure and continually improve the services we provide for residents.  Proposals are currently being reviewed by Cabinet members in 'clusters' of outcomes, for detail to be surfaced with the public before our Cabinet and Scrutiny meetings in December this year.  Our general approach is set out here, highlighting future decisions and when we will be discussing principles and proposals with the public. 

The above is set out in the July Medium Term Financial Strategy.  The next set of decisions outlining preliminary efficiency savings will be in early September.

My next posts will look at Outcomes-Based Budgeting in more detail, Camden's new 'investment tests' for spending, demographic pressure and make some early observations about the depth of the cuts to front line services.   

Monday, 14 July 2014

Camden to boost low pay

Labour-run Camden has just announced plans to ensure that the lowest paid Council workers receive a fairer level of pay, while ensuring that the gap between lowest and highest paid remains at a ratio of less than 1:10.

As part of the introduction of new pay, terms and conditions arrangements in April 2013, a longer-term commitment was given by the Council that work would be undertaken to revise the bottom pay zone.

Recognising the importance and value of good employment conditions in delivering quality public services, the Council is immediately set to increase the lowest pay band for staff from £16,413 to £18,297.

These changes will take effect from 1 January 2015.

In addition, by 2018 every member of staff delivering public services to the residents and business of Camden will have a Minimum Earnings Guarantee of at least £20,000 per annum.

The move sees cleaners, kitchen assistants and school crossing patrol officers receiving an increase in their salary.

Labour councillors and the new Green Councillor passed this motion - opposed by the Camden Tories.

Camden workfare pledge
This council is committed to ensuring high workforce standards and therefore expresses its concern at the inflexible Coalition Department of Work and Pensions concept of 'workfare', which requires job seekers to work almost a full week in return for benefits.  
Camden council as an employer has developed an active labour market programme to promote employability including a successful approach to local apprenticeships - with a commitment to create 1000 apprenticeships over our term to help young people and women 
find high quality work in Camden and elsewhere.  We are committed to the London Living Wage to combat poverty pay and are campaigning against zero-hours contracts.  
This council is concerned that there is no evidence workfare assists job seekers in finding work and in fact working a 30-hour week makes that more difficult; that workfare is replacing paid work; and that workfare stigmatises benefits claimants and locks them further into poverty.  Workfare also runs counter to the movement to introduce paid internships in the private sector.
This council believes that work should pay and therefore opposes the introduction of schemes which force job seekers into unpaid work or face losing their benefits.
 This council pledges not to use any workfare placements and will also encourage contractors not to use the schemes.

Monday, 9 June 2014

Cowan is right to call-in Tory land deals with low affordable homes %

The new administration is totally right to ask for a review of these sites. I'm not sure how the 'spite' accusation is stood up. 
The new Labour administration in Hammersmith and Fulham, led by Steve Cowan, is totally right to ask for a review of development sites signed off by the outgoing Tory administration there, despite the public attacks in him by some sore loser local Tories (see also this).

To be fair to Steve - he's been arguing about the kind of deals struck by the Tories in developments like Earl's Court for some time, via his blog The Cowan Report.  This is because he knows elsewhere in London Labour authorities have been striking better deals with more social benefit to existing residents (rather than just the kind of residents the Tories would like to see).

King's Cross development was negotiated with new businesses
and 42% affordable housing.

Take the King's Cross development in Camden - negotiated by the Labour council in 2006 and signed off by the Labour Mayor of London - contains 42% affordable housing (700+ units) - new shared ownership homes and student accommodation - a public swimming pool, new primary school, new public library, community space as well as business and private residential (see the full s106 here).

Camden's Community Investment Programme is using council land to spur regeneration and raise money by building private homes - but we are also building over 1100 new council homes and repairing 13,000 flats, 54 schools and building new community facilities.

It's not just Hammersmith and Fulham.  The iconic Battersea Power Station in Wandsworth, proposes only 1300 homes with no affordable homes.  The massive Mount Pleasant site in Clerkenwell, with a 12% affordable housing scheme currently on the table in front of Boris Johnson, who was challenged about this when he made a secret visit there last week.

Now deals where there is a smaller percentage of affordable than a borough's policy sets out are regularly negotiated.  Camden's development at Liddell Road, West Hampstead contains no affordable housing, for example - but Camden council is using the proceeds to fund a new primary school local people need and the council is under an obligation to provide.

At first look the Conservatives seem to have given the developers are very good deal indeed, considering the high residential value captured here - but what we don't see is the social benefit they claim to have gained.

So we ask:

(a) why was there no need for affordable housing, given London's housing crisis?

(b) what solid community gains there were negotiated from developers which would make up for this (e.g. new schools, public libraries etc) and what the reasons were for this trade-off?  

These are legitimate questions: affordable housing is Londoner's number one concern.

Look at the King's Cross development in Camden, negotiated by the Labour council there - 42% affordable housing - and shared ownership homes - a public swimming pool, new primary school, new public library, community space as well as business and private residential. 
The new administration is totally right to ask for a review of these sites. I'm not sure how the 'spite' accusation is stood up. 
Look at the King's Cross development in Camden, negotiated by the Labour council there - 42% affordable housing - and shared ownership homes - a public swimming pool, new primary school, new public library, community space as well as business and private residential.
At first look the Conservatives seem to have given the developers are pretty good deal, considering the high residential value captured here.
At first look the Conservatives seem to have given the developers are pretty good deal, considering the high residential value captured here.

Friday, 30 May 2014

Taxi for the Lib Dem! Why the Lib Dems lost in Camden

The demise of the Camden Lib Dems at the 2014 Camden poll seemed to catch their councillors and activists by surprise, but their thumping was long-expected.

Lib Dems decimated in Camden
The editorial in the New Journal captures at lot of their misfortune, but here's my take:

1.  Believing their own hype.  The political culture of the Liberal Democrats is based around the creation of local 'super-heros' who will fix your potholes or gesture out late rubbish collections with pointy fingers, and promoting this impression in their Focus leaflets.  All good work for those  Most councillors from other parties find the suggestion that Lib Dems work harder on casework or are 'more connected' locally very patronising and wrong - and is not something ever shown objectively in casework figures.  If there was a difference then there would be a substantial personal vote at election times - yet sampling the ballots and the results themselves show that this didn't materialise when it mattered.  That didn't stop the Camden Lib Dems believing their own hype and self-promoted local celebrity rather than thinking more profoundly about their local offer and message. After hubris comes nemesis (a.k.a. pride comes before a fall) as they say in Greek tragedies. 

2.  They talked to the same people maybe a bit too much.  Labour mounted a massive operation for months on the doorstep - at time speaking to over 3000 a month. This is vital in Camden where there is so much churn that you don't just get your views from the same people on the same community groups, important as they are.  The Lib Dems even struggled to find enough candidates to stand, even roping in partners of sitting councillors to make up numbers.  Their party was hollow.

3.  Nothing to say on the 'big issue' - housing.  Affordable housing and cheaper rents are the top concern of Camden residents.  Neither the Liberal Democrats nor the Conservatives had any real policies on the housing crisis and by lacking them appeared sectional and out-of-touch to everyday concerns.  Labour pledged to build 6000 homes, take action on private landlords and empty homes.  What we said locally was backed up by Ed Miliband, while the Lib Dem leadership seemed to have given up on London from the beginning of the campaign.  (As an aside, the Conservatives failed to make inroads - and Labour made real gains in Tory targets Fortune Green Belsize, Swiss Cottage and even Hampstead Town - because they also lacked policy spectrum on housing beyond traditional channels such as repairs and leaseholder charging).   

4.  Nick Clegg alienated progressives - but it wasn't just him.  Contrary to the public 'Clegg Out' calls by local Lib Dems following last week's defeat, Nick Clegg unpopularity goes beyond his own person - although he is of course symbolic.  Blair is right in his analysis but I'd go further: the Lib Dems essentially fought the 2010 election from the left of Labour - specifically and deliberately doing this in a number of areas, including North London.  But people aren't just angry at the Lib Dems because of their deal with the Conservatives, nor their welshing on policies like tuition fees.  There's also a general sense that the Lib Dems in power have made a series of catastrophic decisions which has set back the progressive cause a generation.  Their amateur-night handling of the PR referendum and Lords Reform blew once in quarter-century opportunities to change the nature of British politics - in both instances it was apparent that they had been comprehensively played by the Conservatives.  The trust issue with the electorate isn't just linked to Clegg but Laws, Cable, Alexander in fact anyone who could credibly be leader.  Dissatisfaction with compromises played a part, for sure, but there was also the question of competence... and that's a real killer.

5.  A bit too much Labour-hatred.  The success of the Lib Dems in North London over the last decade was partly a result of their progressive appeal, yet their very political language in 2014 was a turn-off to the very voters they attracted before. In the Kilburn Times, for example, they pledged to 'topple' Labour, implying they were up for a new Coalition with the Conservatives. This is not where people were at, and in doing so (via leaflets as well) they gave clear signals to the electorate that a vote for the Lib Dems was a vote for the Coalition in Westminster.  As the CNJ argues: maybe a bit more distance and independence would have been wise.    

6.  North-west frontier tactic didn't work.  Trying to create an artificial divide between people living in the three wards in the north west of Camden (erroneously dubbed the 'north west frontier') and the rest, was rejected by the NW6 electorate.  Claiming that the area was neglected by street cleaning services couldn't be stood up by the facts and the charge that all services were being relocated to King's Cross also didn't hold any water. Camdeners voted for parties with Camden-wide policies.   

7.  The writing was on the wall in 2012.  The London Assembly list results in Camden in the 2012 Mayoral elections placed the Lib Dems in 4th place to the Greens
. The warning signs were there to see but rarely picked up in the national or local press - and certainly not by the Lib Dems themselves.  

That's quite a lot to fix there...