Reorganisation hopefuls should focus on place over structure

Delays to announcements about the future of local government reorganisation have left councils frustrated, but Jonathan House argues structural changes alone are not the answer. 

This article originally appeared in the Municipal Journal on 4 October 2017.

It had been widely suggested that there will be an announcement on the future of local government in Dorset during September. With no such announcement forthcoming, it seems current arrangements may be maintained for a little while longer.

Should this be the case, supporters of local government reorganisation (LGR) will no doubt point to an opportunity missed – a chance to transform public service provision across the county and its conurbations passed over. However, the prize of transformation remains within the gift of the councils concerned.

By focusing on place, as opposed to structure, they could still achieve a step change in the outcomes they are able to deliver.

Proponents of LGR argue there is an inherent logic to the unitary model. They suggest it is difficult to envisage why, when faced with a blank sheet of paper, anyone would design a system of governance and administration in which accountability was shared between different organisations with overlapping responsibilities. Of course, the same could be said of the way in which a range of other public service bodies are configured.

Others would argue that the structure of local government is not the issue.

Critics of LGR have frequently referred to the exercise as a distraction – tantamount to rearranging the deck chairs on the Titanic.

Others have gone further, arguing the process has the potential to undermine established and successful examples of partnership working

Our experience of working with local authority clients has taught us that structural change, on its own, is unlikely to deliver the levels of transformation to which many councils aspire.

Some of the leading councils we are working with are considering alternative options, focusing on opportunities to transform the places they serve as much as the landscape of administration. They are making new strategic choices for their areas and exploring new ways of working with their partners.

A focus on place-based transformation offers significant opportunities for local authorities. It can be used to concentrate attention on the outcomes that matter, the genuine needs and aspirations of residents and the ‘place branding’ that will help localities to differentiate themselves and be competitive across a range of indicators.

For example, our work with Demos on the Good Growth for Cities Index highlighted the importance of balancing investment in growth and public service reform. A focus on place can help to build alignment around a vision of the future in which the legal status of statutory bodies is a secondary factor.

Pursuing an agenda of this type can be complicated. Using data to generate real insight into the needs of particular community groups requires capabilities in which many local authorities have only recently begun to invest.

The results of our 2017 annual survey of local authority chief executives and leaders – The Local State We’re In – revealed only a third of respondents are confident that their council uses data analytics effectively to inform decision-making and strategy.

Our survey also showed that while six out of 10 respondents agree that councils should be more responsible for facilitating outcomes rather than delivering services, only four in 10 fully understand how to measure outcomes and only a quarter know the cost of securing outcomes across their place.

Similarly, fostering consensus around place ambitions requires considerable investment in relationship building. The sustainability and transformation plans (STP) process has exposed the difficulty of achieving this across many health and care economies – over half of respondents to our survey feel their council has not been fully engaged in the development of their STP.

In spite of these challenges, more councils are recognising the real answers to delivering place-based transformation lie in the power of their relationships with partners, communities and residents.

Alignment is much more likely to occur where decision makers have spent considerable time building relationships based on trust and mutual respect. In some instances, it may be desirable to consider formalising these relationships. In others, a non-structural solution may offer more immediate benefits.

Many councils are responding positively to this agenda. At a strategic level, the more advanced councils are carrying out more in depth analyses of the needs of their place – focusing on delivering real insight about what is happening at a local level and improving their understanding of what has made other places successful. They are building alignment around a compelling vision for their place, as well as modelling the impact of interventions that will help them generate inclusive growth.

On a more practical level, leading councils and their partners are critically assessing their opportunities to share functions and work more closely together. They are working with others to enhance their capabilities around data and analytics, as well as considering joint investments in digital and technology.

Many organisations are aware of what they need to do to improve their operating models, but the sector is only just beginning to realise the value of whole system operating model change.

The prospect of LGR in Dorset, as well as a number of other areas across the country, remains an exciting opportunity. However, structural change on its own is unlikely to deliver the improvements that are so desperately needed. It is our focus on place that we should be giving the highest priority.

Jonathan House | Partner
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