Talking about tomorrow today


By Rob Whiteman, CIPFA CEO

The political uncertainty of the last three years appears to be coming to a head - a new Prime Minister may handle the next milestone of 31 October as a break to Brexit negotiations, resulting in an immediate exit. While this may end the uncertainty that is damaging investment decisions, it may escalate into a constitutional crisis between Parliament and government that leads to government meltdown. We have no administration in Northern Ireland. Might such stasis occur in Westminster too?

Given the context, CIPFA believes that both the Comprehensive Spending Review and the Fair Funding Review should be deferred. Alongside colleagues, we will continue to lobby government for top-up funding for public services. In the meantime, while the outgoing Prime Minister appears very keen on making a significant settlement for schools, the new Prime Minister may instead wish to apply fiscal headroom to tax cuts. It’s all a bit wild!

In the midst of it all, it’s more than just a cliché to say that local government has reached a crossroads. Through difficult decisions and imaginative transformation, austerity has led to fundamentally altered council services. We also see sometimes positive, and at other times strained, relationships with other parts of the public sector. Compounding this pressure is a material growth in service demand and increasing pressure to deliver quality services in the midst of cuts. A patchwork of new structures of local governance have emerged in some places to better manage these challenges, including combined authorities, integrated care partnerships and unitary reorganisation.

We see five key themes driving the next few years:

  1. Are new structures of local governance working? What’s the evidence so far for the patchwork of combined authorities, integrated care partnerships and unitary reorganisation? What’s next with this agenda?
  2. Though stronger than much of the public sector, the financial context nonetheless requires local government to enhance its financial management and resilience. World class organisations actively manage their liabilities and resources, enhancing value over the medium term with strategies to support and deliver transformation. Tools range from a successful improvement model through to robust investment and commercialism. At the extreme other end, less strong organisations live from hand to mouth via frenetic short-term decisions without strong evidence to do so. We must close the gap, and CIPFA believes the new Financial Management Code will help to do so by supporting sound, objective, and often difficult financial decisions whilst appropriately managing risks.
  3. Governance has at times taken a bit of a battering in the name of expediency. CIPFA would like to see that options and Wednesbury-reasonable decisions (a standard of unreasonableness used in assessing an application for judicial review of a public authority's decision) are always taken on good and public statutory officer advice with independent commentary provided by public audit. How do we strengthen local governance where needed?
  4. Many councils have made effective use of commercial investment to generate much needed local revenue. Whilst the new guidance on the Prudential Code will address the few cases of excessive risk taking, will councils now more routinely bid against each other on opportunities? Will this affect potential returns? How do we best guard against this?
  5. We live in a time of declining public trust in institutions, both in business and in public sector organisations. Local government as a whole has done admirable work over the past ten years to reinvent itself in a way that reduces spend and protects vital services, but change has not always been received well. Local leaders face a conundrum. How can they ensure the continued health of local government finances and deliver sustainable services, but recapture and retain the faith of their communities in their ability to achieve this? Whilst councils need to get things done, what tools are working best? Many councils appear interested in complementing accountability through the ballot box with participatory budgeting and citizen assemblies to enhance public buy-in. This is not simply a nice-to-have, but is key to successful change management. While statutory consultations are a must-have, they might not always connect with the entire community. We must nurture a culture in which information is freely available to those who need it in a form that is both timely and meaningful.
With these and doubtless other questions or propositions in mind, CIPFA has begun a 12 month campaign, launching with the publication of our conversation-starter Talking about tomorrow: shaping successful local services.

The year-long debate will invite councillors, officers and citizens to address the challenges of effective service delivery, explore what can be done to restore trust in local systems and ask how techniques to manage resources can really add value. Our aim will be to identify a set of recommendations that answer these questions, but we can only achieve this with the sector’s help and widespread collaboration. I invite you to join the conversation.

This article first appeared in The MJ.

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