The UK Experience by Malcolm Morley *
Sir Peter Gershon’s review of public sector efficiency published earlier this year is now starting to really focus the minds of all public sector managers. Assumptions that 2.5 per cent savings annually for the next three years can be generated through more efficient procurement and streamlined working will test all Councils.
In preparing for this challenge, Councils are still awaiting guidance/clarity from Central Government on many issues. What is clear, however, is that failure to meet the Government’s expectations will impact on the Council’s Comprehensive Performance Assessment (CPA) categorisation and consequently on the public’s perception of the Council, as well as its freedom and flexibility to act as Local Government. Significant issues for all Councils.
Given the CPA implication, Councils have had to start their strategic thinking so that action can follow clarification of issues as soon as possible. The issue of partnership working to aggregate purchasing power and to acquire economies of scale has been taken to a new prominence in many Councils.
In developing the approach to the challenge of making savings through partnership working, Councils have identified the following questions to be answered:
- What is the scale of savings through partnership working in service areas?
- What impact do national and local priorities have on the scope for making savings in service provision?
- Does the Council have the corporate capacity to access the potential savings available?
- Can purchasing power and economies of scale be realised in practice while protecting the quality, branding and local differentiation of services?
- Do partnerships currently exist to achieve the savings required and can the Council gain access to them?
- Do the Council and potential partners have the willingness to work in partnership to generate savings that are sustainable over the longer term?
- What partnership vehicle needs to be in place to enable the savings to be realised, such as Joint Committee, Arms Length Management Organisation, Public Private Partnership, Public Public Partnership?
- What timescales are desirable and possible for the realisation of the savings?
Once the suitability and feasibility of savings have been established they will then be tested for acceptability.
As all Councillors and managers know the acceptability test is often the most difficult. Many smaller Councils often feel constrained by their corporate capacity in both front and back office services. Many larger Councils often have high central cost structures.
The Gershon Review has provided a real stimulus for smaller Councils to identify the potential to address their corporate capacity issues through partnership working that reduces their support costs to enable them to invest in front line services.
Similarly larger Councils have the opportunity to leverage their support costs to help smaller Councils and themselves. Leveraging their support costs will enable larger Councils to invest more in front line services.
The logic and potential are clear. The key to all of the above, however, is the willingness of Councils to work in partnership together and with other organisations whether they are in the public, private or voluntary sectors.
* Malcolm Morley is Chief Executive of Harlow District Council and can be contacted via the Editor, email info@lgfocus.com.au The views expressed in this article are not necessarily those of his employer.
