All change with reorganisation?

As reorganisation raises its head, APSE’s Mo Baines explores the issues that are once again back on the agenda.

It is widely anticipated that alongside a promised Comprehensive Spending Review the Autumn season may bring about a much talked-about White Paper on devolution.  The two matters are intrinsically linked with the perilous state of local government finance driving the move for reform. Most would agree that if we had a blank piece of paper the current structures of local government in England would not make it past first draft. 

Seismic reform of local government structures has already taken shape across the UK, with the development of unitary local government in Scotland and Wales in 1996, and Northern Ireland in 2014. England has a much messier landscape with existing unitaries, counties and districts, coupled with piece-meal new unitaries coming from locally driven proposals, alongside new combined authorities with elected mayors.

With a Government elected on a promise of ‘levelling up’ against significant gaps in local government finance, it is hard to see how this can be achieved without a genuine debate on the most effective resources, structures and powers available to local councils.

A recent report by PWC on behalf of the County Councils Network highlighted a further dynamic – that of scale. When reorganisation proposals have the potential to split an existing county into two or three new unitary authorities, PWC’s report argued that the resulting duplication of services such as children’s and adult’s services across multiple new organisations would be expensive as well as exacerbating existing issues of staff recruitment and retention in hard-to-fill posts. The PWC report suggested that a single unitary option, likely to involve drawing up districts into an existing county, would be the most financial effective model producing savings of around £3 billion. Government Ministers have also stated that they would expect unitary population sizes to be above 300,000 – 400,000. 

But is it all about finance and does the economies of scale argument really add up? It is easy to make assumptions that bigger is better for some services, but knowledge of local areas and optimum efficiency is not necessarily synonymous with operating at a larger scale. For example, in services like refuse collection the achievement of route optimisation is dictated by the area size and distance to waste sites. In a reorganised boundary this can work against service efficiencies if the collection area is too large, meaning operationally it would need to be broken down into manageable service units. 

There are also implications for local knowledge and loss of organisational intelligence and memory. Similar arguments can also be found with the delivery of other services, such as care services, street- scene and public realm, not to mention unpicking some of the big contractual complexities of PFI contracts in areas like street-lighting and waste disposal.

From APSE’s perspective it is clear that reorganisation alone will not necessarily improve local outcomes. Whilst local authorities have a key role to play in acting as stewards of local places -  including a coordinating role between the different actors and partners - such relationships will not necessarily align to new unitary structures. In any event, without accompanying new powers and duties it is hard to envisage how this stewardship role would be enhanced, for example holding to account bodies which may impact on local health or educational outcomes.

Cognisance must also be taken of the relationship between electoral democracy and the accountability of larger institutions. Compared to most of Europe, England already has relatively larger municipal councils so why pick the figure of 300,000 to 400,000? Especially when existing larger unitary authorities are often criticised for being too remote and cumbersome. In any event the issues of reorganisation should not be divorced from the role of councillors; not only are they often the bedrock of local political organisation, councillors are also the closest democratic link with their local constituents, with functions and responsibilities in terms of both how local services operate, and accountability for those service successes and failures. 

Moreover, as the recent health pandemic has highlighted, the fluidity and reactivity of local services and the ability of councils to quickly change direction to meet local needs and emerging issues is not a matter that can be understated. A core question would be could a much bigger local institution make those same responsive decisions as a smaller body or indeed would a bigger institution have more capacity to take more immediate responsive actions? Coupled with the identification of place in terms of the nuances of locality, whether a market town or a coastal area, alongside the debate as to the shape of local governance and accountability, then it is clear that reorganisation should not be viewed as an easy option.

There is also a huge question over workforce matters. Whilst cost assumptions can be made based on new structures, numbers of employees and against assumed service costs, for many local councils having completed job evaluation schemes, these assumptions are made against their existing workforce costs. Whilst it may be justifiable to transition staff to new structures and maintain the ‘rate for the job’ upon transfer, there will be a longer term need to potentially re-run evaluations to equal pay-proof new structures and organisations. This of itself will create added costs and complexities, potentially raising issues of pay protection and testing the tolerance of pay and grading structures in a new organisation, particularly once faced with issues of full workforce harmonisation.    

Finally, APSE would also urge consideration of so-called alternative models of delivery which has in effect led to cost inflation and inefficient use of public funds regardless of structures. For example, in adult care the exposure of the service to market forces in areas like residential care homes has led to concerns, following the health pandemic, about the viability of private markets delivering care services. Reorganisation may present opportunities to look again at the viability of genuine public sector models that could be delivered on a sub-regional basis, enabling more efficient models between public authorities to be developed. Whilst the structure of the organisation is important so too is the delivery model of public services. Simply changing structures alone will not necessarily address some of the inherently difficult issues in people focused services, which have, over the last few decades, been delivered through outsourcing models that look increasingly precarious and most especially following exposure of these services to the impact of the pandemic.