The changes hitting local government pose a number of new legal challenges. Councils must get to grips with them if they are to do more than just ‘muddle through’.
When the government announced the Comprehensive Spending Review in the autumn of 2010, many commentators, practitioners and political leaders anticipated a massive and immediate impact on local authorities. Radical responses were expected; major changes to the portfolio of services delivered and procured; significant redesign of a range of services and activities; and the merging of authorities.
The reality has been rather different. Whilst there have been cuts to services and jobs, increases in charges and other detrimental changes, the majority of local authorities have managed to balance their budgets (or almost balance them) without the level of change that we were predicting fifteen months ago. Many authorities have simply done what they have always done when faced with budget pressures – ‘muddled through’; taken money from reserves; frozen recruitment; salami sliced service budgets; increased charges and eligibility thresholds for accessing services; ended agency payments; and other familiar but not very imaginative actions.
Some have gone a few steps further and taken decisions unilaterally to change employee terms and conditions; close services such as some libraries; disproportionately reduce funding for the voluntary and community sector; and renegotiate contracts for services and commodities. A small number of authorities have begun to be more strategically radical in their approach. In general, however, the response to the CSR has been ‘same old, same old’. This bodes very badly for the future.
There is a very high risk that many of the authorities that have not yet adopted radical and longer term approaches to the CSR will find that they are going to be hit hard by the unintended consequences of their short term actions. For example, undermining the voluntary and community sector’s capacity will result in more pressures on local authority services and less resilience across communities; and cutting terms and conditions for staff will reduce staff morale and motivation which will make it much harder to undertake successful change programmes.
These authorities could, as a result, find themselves having to make even deeper and more damaging cuts in future years as they run out of tactical, short term options. Reserves can only be spent once – hence the absurdity of not using them to invest in changes that will result in long term savings rather than to fill short term revenue gaps. The current CSR period has between one and two years to run and there can be no certainty that the Chancellor will stick to his original 2010 targets. The prospects for local government for the 2013/14 CSR are bleak, with the likelihood of still more cuts, and most certainly no increase in overall local authority funding.
Major change programmes take time to design and implement, and even longer to bear fruit. Therefore, programmes not started in the next year to eighteen months are going to offer little to mitigate the 2013/14 CSR settlement. Change programmes which can preserve and improve service outcomes are complicated and will take longer still, but these are precisely the type of programmes that local authorities need to pursue – and should have been pursuing with great vigour.
As it changes local government must not abandon its values and objectives. It can continue to ensure opportunity for local people, their safety and community wellbeing. It must remain accountable to local people. It should remain an excellent employer and expect the same of its suppliers and partners. The mantra ‘more for less’ should be abandoned forthwith, and replaced by ‘different – in different ways – with much less.’
Given the national government’s policies, demographic change and the rising demand for core services, responsible councillors and councils must recognise that they cannot simply sit back as the tide comes inexorably towards them. Councils can decide to be proactive or reactive. They can choose to be strategic or to be incrementally defensive. However, those who find themselves in the latter category are likely also to find that they have lost control – both of their own destinies and those of their communities. The downward spiral to despair and destruction of local services and local communities is likely to prove nasty.
And yet – the reduction in central guidance and national targets, together with new powers such as the power of general competence, actually offer local government a series of opportunities: to be creative in responding to local needs and the aspirations of local communities by working with the business, voluntary and community and wider public sectors in new ways. Local authorities can demonstrate bold successful ‘leader of place’ behaviours, shaping the economic, social and environmental future with their communities. No two places or two local authorities will adopt precisely the same approaches. They should do what is right for their place and not wait for central government to tell them what to do.
This will require courageous and effective political leadership in order to make extraordinarily difficult political choices and influence others to act collaboratively. Excitingly, the next few years offer the possibility of a renaissance of politics in local government with a real move from local administration to local government.
Officers and in particular local authority lawyers have a responsibility to creatively support politicians in taking control and reshaping their authorities and their places. Legal officers will have to explain the new powers available to local authorities and encourage politicians to use these powers fearlessly and courageously. They will need to encourage politicians and their officer colleagues to push the boundaries and use new ‘freedoms’ to the maximum in order to secure better outcomes.
And as local authorities seek new ways of working with public sector partners, the local voluntary and community sector and businesses, so too will legal officers be called upon to find the means to do so. These will include new contractual forms; flexible outcome focused partnership agreements; and governance arrangements – all of which will be vital components to securing desired outcomes whilst protecting democratic accountability and probity. Local government will need advice on localism and on greater devolution of power and resources to communities and the voluntary sector in ways that enable these policies to be realised rather than stifled.
Local government lawyers will have to ensure that procurement avoids being over-bureaucratic and is opened up and allows for dialogue with providers from all sectors. They should be the champions of the new Social Value Act and procurement aimed at delivering wider policy goals. They will need to understand and advise on social investment opportunities and alternative funding arrangements. They will have to practice commercial skills and be able to identify, evaluate and manage risk, and provide the necessary advice to politicians and senior officers to enable them, in turn, to make informed judgements.
Over the next few years, major change is inevitable. This means adopting adopting a ‘yes we can’ culture to ensure that this change is radical, and delivers long term sustainable change in accordance with the political objectives of local people and their political leaders.