Working together

So Camden and Islington are going to share a chief executive from next May. I must say that I find these sorts of arrangements to be gimmicky. It's seems that two heads is not better than one but I can't believe the savings is worth the aggravation. And I've never known a chief executive who felt their job only filled half their time.

Let's say both councils save the cost of half a chief executive. That must be about £125,000 a year, which is a small contribution towards the tens of millions of savings that need to be made. In fact, I doubt that the councils would save as much as half a salary. Won't the combined chief executive get a pay rise for being responsible for twice as many staff, etc and won't there be a temptation for each council to have a deputy chief executive who will be in charge when the chief executive is in the other place?

Surely the level of savings that are needed in public bodies can only be achieved by more radical models of working together. What's happened to all the potential from Total Place? It seems to me that public bodies have all retreated into their individual shells to work out how to inflict the cuts on themselves but perhaps if they took a more outward-looking approach to the current situation they would see something different. Here's an idea that a friend and I were chatting about over coffee earlier today.

Why aren't councils within a city-region asking one of their number to run a library service across the whole city area on behalf of all the councils. And perhaps they could transform the service away from a branch network to a system like Amazon's DVD service where a citizen orders some books and they are delivered by post or courier and only when they have given the books back can they borrow some more. The combined library service could also subscribe to the electronic library resources that are used in universities thereby giving citizens access to masses of electronic information. It would be radically different from what people are traditionally used to but we live in times that are radically different from when free public libraries were conceived.

Still haven't found what I'm looking for

I've not posted here for a while as a result of holidays and work but I've turned my attention back to writing now. Not least the writing of my textbook. Anyway, as part I why I have been writing I have been looking for budget info for government departments. It's harder than you'd think to find it in these days of the internet and openness and transparency. I've looked all over the Dept for Transport's website and can't find its budget for this year. I can find budgets for the executive agencies and I can find annual reports but not a budget or business plan for the department as a whole. As far as my book goes I can write about another department but if I were really interested in the DfT's spending plans I'd have to use old technology: I'd have to write and ask for it.

Learning from Canada

I have just returned from a great holiday in Canada (and Seattle, WA) so that seems a good reason to mention this article about how the UK Government was looking at the Canadian government tackled its own budget problems in the second half of the '90s.

You can get the full report from the Institute of Government website here. I guess the most important thing is to learn the lessons from others' experience and these are neatly summarised by the Institute for Government as:

• "it is a societal project – it involves an open and inclusive approach that engages the whole of government, and not just a small number of people working in relative secrecy.
• "a large scale programme makes possible reforms that alone would not normally be possible
• "speed is important if there is a high level of consensus in society – it creates light at the end of the tunnel
• "a high degree of prudence was built around Programme Review
• "luck – the Canadians were lucky there were no major external shocks during the time
• "it is possible to lead ambitious reforms and make choices in a principled and defensive way, rather than just make easy, unsustainable cuts."

Will abolishing the Audit Commission really save £50 million a year?

I find the Government's expectation to save 25% of the £200 million a year spent by the Audit Commission hard to believe. In the mid-90s I worked for Ernst & Young carrying out audits on public bodies under the auspices of the Audit Commission. At the time the firm couldn't charge its usual fees for the work because it was obliged to charge the rates set by the Audit Commission but the fees would have covered more than the direct costs of carrying out the work and it meant that there was extra audit work in the summer, a time when there are fewer private sector accounting year ends. The firm were not able, however, to carry out the non-audit consulting work that they often do for private sector clients because of Audit Commission rules.

Some years after I left the firm, Ernst & Young gave up their Audit Commission work but there are a handful of firms that continue to deliver about 30% of audits. Will these and others bid for an increased share of the audit work?

The cost of the Commission is charged to its clients, of which there are about 1,000 principal local authorities and health bodies. There are some xxxx parish councils, too. Let's assume that all the principal bodies can in future select their own auditors but the current arrangements are retained for parish councils (that district or metropolitan district council's auditors will undertake the audit of all the parishes within the district). The 80:20 law suggests that £160m in fees is earned from 200 organisations, at an average of £800,000. These organisations could expect competition from first and second tier audit firms and perhaps they might make savings. That all depends on whether the firms are willing to carry out the audit work at rates that are lower than the Audit Commission has maintained them. I suppose it is possible given the squeeze in the economy. I suppose, too, that audit firms might take a more aggressive view about audit fees if they believe they can earn extra income from non-audit work but the government and public sector organisations are supposed to be squeezing out their use of consultants. 

And what about the smaller organisations, the 800 with an average fee of £50,000? Will they see the same level of competition? Or will they see their fees rise because £50,000 to audit a district council and 10-15 parishes isn't going to leave a lot of scope for profit. It may not be provable but I suspect that smaller council audits are subsidised by the larger audits. Large councils will often allow the audit team to have office space rent-free all-year-round,  offices from which smaller council's audits can be managed.

There are a number of issues here that the NAO (one presumes it will be the NAO) will have to consider before the Audit Commission is abolished in 2012/13.

No halfway house

I agree with what Tony Travers says in this article about whether ministers will  leave the regulation and improvement of failing local authorities and health bodies to market solutions. When things go wrong AND there is significant publicity about it, ministers like to be seen to take firm action. A press release from a minister along the lines of, "I believe the governance and audit arrangements that XYZ Council have in place and that have led to this dreadful situation will ultimately correct the situation" isn't going to satisfy anyone.

No taxation without representation

The tradition of local elections in May where voters may register their approval or disapproval about the council tax bills they have received has been seen as insufficient for the best part of 30 years, which is why governments have had various mechanisms for restraining the level of increase. However, the government is now consulting on a method that would put the power to local people by requiring proposed increases about a centrally-dictated level to be the subject of a local referendum. If it becomes law I will certainly be curious to see whether some towns decide to have higher taxes in return for higher spending.

Also, it was an interesting choice of example by Eric Pickles in this article. In fact, rather than being halved, domestic refuse collection now collects more waste than it did in 1997 (because we keep on consuming and consuming) and simultaneously it has managed to increase the tonnage and the percentage that is recycled. One might suggest that such a front line service has been transformed for the better not the worse.