Saturday, 4 July 2009

Pain, maybe gain, and a bloody big mess if they get it wrong: Barnet’s Future Shape

On Monday 6 July Barnet council’s Cabinet are likely to endorse the latest Future Shape report. As you would expect, the objectives of this controversial and already expensive exercise, looking at how Barnet council might reconfigure service delivery in the future, are presented in glowing terms in the report:
1. A new relationship with citizens
• developing a deeper understanding of community needs, aspirations and capacity
• connecting citizens with each other to encourage self-help
• enabling citizens to choose and personalise services
• working with the public to change harmful behaviours

2. A one public sector approach
• collaborative leadership; beyond organisational boundaries, with democratic accountability at the heart of it all
• retain only those things that add value to the public
• joint strategies to decide how resources are used
• jointly commissioning services through specialist ‘vehicles’ to achieve better outcomes

3. A relentless drive for efficiency
• developing the space to think strategically and commission services
• ensuring a greater proportion of expenditure is preventative
• working with public, private and third sector partners to lower costs
• trading and gaining revenue through value added services
How it’s shaping up has changed from the original conception, that much is admitted, when the Future Shape vision was of a small, ‘strategic hub’ at the centre of the council, with councillors and senior officers ‘freed up’ to think about the most important issues facing Barnet, such as climate change and obesity (that’s what they said!), and the vast bulk of council services placed at arm’s length in a ‘special purpose vehicle’, rather like Barnet Homes is now. Many back-office functions would be bought in from the private sector. (That last part of the vision remains, with hints that a big contract with a company like IBM is being considered.)

The enormity of how much work it would take to achieve such a vision has slapped the Future Shape team in the face since then; that and the recession. For instance, on page 11 they report:
The Vehicle Group are due to report in October but have already identified that a single ‘vehicle’ for the delivery of all Council services, as was proposed previously, is not feasible.
It’s the recession, stupid

And why that is, is explained on page 18:
What has changed since the inception of the Future Shape Programme
In the intervening period, between May 2008 and June 2009 a number of changes have emerged that are additionally in need of a response
• Recession and the deterioration in the public sector funding picture
The recession and higher public borrowing means increased pressures on public services. Barnet’s Tories - and they are far from alone in this – believe that one way to save money is outsourcing, getting private companies to run services, which they can sometimes do more cheaply than the private sector - although often through driving down employees’ wages and conditions, and by delivering an inferior service. However, a key problem for the council is that however much they might want to privatise, sometimes there is no private company out there that can do what they want:
The recession has also had an impact on private sector providers. Historically the private sector has fulfilled a need for additional capacity in local government by investing substantially in partner authorities and securing pay back for this investment over a number of years. But the number of providers is shrinking with some in real trouble and others seeking a much shorter return on investment. Additionally the appetite for the market to take on risky ventures outside of areas of core competence has diminished. The Cabinet report of May 2008 sought permission to explore the idea of a ‘Special Purpose Vehicle’ to procure and arrange the delivery of services on behalf of the Council. The recession has severely curtailed the capacity of the market to be able to respond to such a challenge.
There is another dimension to this problem that raises serious worries about the Future Shape programme; this is spelled out on page 6: continuity risk, and the financial implications of a disruption in critical services being delivered from outside the council ...
ie, what happens if a business delivering a service goes bust, or simply decides it wants more profits than it is getting? This nature of problem was seen recently when National Express pulled out of the East Coast rail franchise.

A rather long and alarming list of further things that could go wrong is included in Appendix 2 of the report, ‘Risks’.

The future of the working groups

The Vehicle Group (to be renamed Commission Group) was one of seven working groups that began work in spring 2009. Explicitly, council trade unions and Barnet residents were not represented as such on those bodies. The working groups will continue in the next phase of Future Shape - joined by an eighth, the ‘People Stream’, which recognises, well, that people – Barnet staff – are going to be quite important in what happens in Future Shape. But the report does not give clues as to how the groups will function henceforth, whether their membership will change – as I believe they must. They have had handpicked council staff members on them but have mainly been guided by the Future Shape team which is headed by secondees from British Telecom, and much of the input to the reports that are available now has come from consultants PricewaterhouseCoopers (PwC), who are being handsomely paid for their work.

If the council is serious about involving citizens and ensuring proper governance and democratic accountability under any new configuration of service delivery, they have to involve residents, as residents, now. And consult properly with council unions, as there are serious implications for staff in what is being considered: outsourcing, with transfer of staff to new employers should be done under conditions that are not worse than what they have now; there is no case for cutting the number of staff employed. Services cannot be delivered well on a shoestring by staff with too much work to do.

Is the gain really worth the pain?

The report gives fairly sketchy ideas at this stage of how much money could be saved; it’s never admitted that they might ‘invest money to save’ and end up losing money, but that surely must be a risk. A lot of money is going into the Future Shape development programme itself; then the gains that are offered seem to be fairly modest and, at this stage, possibilities not promises.

Spend less and get more?

One idea permeates the hype around Future Shape, as it did the sheltered housing warden cuts passed recently at the Cabinet: services never suffer, even when they cost less; in Barnet-world cuts almost always seem to lead to better services!
Could the opposite actually be true?

One passage in the report (page 19) boasts of a relentless programme of cuts over several years:
Barnet has reduced costs by £80.9m over the last 8 years, an average of approximately £10m per annum.
And yet the report says that one of the reasons Future Shape has to happen is because of ‘static’ or falling satisfaction levels with council services; at the same time it cannot quite work out why there should be falling satisfaction (page 18):
Deterioration in public satisfaction
Whereas at the outset of the Future Shape Programme the available data suggested that satisfaction was static, latest figures show that between 2006 and 2009, public satisfaction with local authorities fell from 52% to 45%. In Barnet the figure has dropped from 57% in 2006/7 to 51% in 2008/9. Perceptions that the Council provides value for money have also deteriorated.

In 2008/9 one third of residents agreed the council provides value for money, an 8% drop since this question was last asked in 2006/7. This is despite ever improving results in the ‘industry standard’ CPA ratings and despite a general increase in people’s satisfaction with their local area; up on average for 75% to 79%. In Barnet this figure has increased from 78% to 80%.
Decreased satisfaction, I contend, is related to cuts. You can’t go on forever cutting and getting better services; it doesn’t stack up. The wily public have noticed that!

Overarching anxieties

The latest Future Shape report shows the council sobering up somewhat, and it has pushed the deadlines for major changes back a long way. But what is envisaged is groaning with risks for the quality of services in Barnet in the future; real content would have to lie behind the fine promises, and I doubt the council’s ability to deliver this, especially given the signs that they are prepared to:
- Buy cheap services that might represent ‘value for money’ but that are poor quality
- Sacrifice staff levels, wages and conditions
- Disrupt the representative function of councillors
Author’s note: This blog is only a start in assessing the Future Shape report. A longer version of this document will be available on the Barnet trades council website soon. And please forgive any spelling mistakes – I’ll sub this post tomorrow, but I felt I must put something up!

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