This blog is one of two reflecting on the CIPFA conference.
My overarching reflections were that:
1. The financial precipice ahead is very real (and actually not that far ahead)
2. We shouldn’t be constrained in our thinking about how we future-proof local government – we need to be bold and creative
3. This means we must step out of our comfort zones and embrace new ways of thinking and working.
My thoughts are based on a range of conversations with people from across the sector, and from reflections on some of the sessions I attended. There was a sense of ambition and commerciality, but, sadly, in some cases, I felt that the promised ‘innovations’ being presented were not as ambitious and game-changing as they could have been.
At the moment, there is much talk about being more “commercial”, often framed as “running the business of local government well”. But there are no businesses out there like a local authority, with the diversity of responsibilities, exposure to political as well as business risks and the legislative limitations of being a public body. So, in a time when something different is needed, is the sector geared up to innovate on a big enough scale to truly achieve sustainability?
One area where the innovation seems to be concentrated is on the creation of Alternative Delivery Models (ADMs). An ADM does offer a viable, more “commercial” option. Some see them as a solution, as they enable a sharper focus on objectives and greater flexibility in how to achieve them. That said, a simple change of structure and governance will not achieve the “something different” that is required.
To achieve a different outcome, financial or otherwise, an ADM needs to create a difference, and whilst energies go into the financial business case, governance and legalities, unless it can create a shift in culture in the right way, it will not deliver.
We can learn a lot from those that have gone before, and there were some successful examples shared at the conference. What stood out to me were the things that those presenting, including Wolverhampton City Council and those representing Edsential (an organisation spun out from Cheshire West and Chester and the Wirral), said made a difference to the success of an ADM.
As an SME ourselves, these were familiar insights. The skills to run an SME are unlikely to be within the armoury of the service manager – managing cash flow is one example. Working as an SME, rather than as part of the Council, financially, there is a much more real sense of “sink or swim”. The service now must balance the books for service delivery to continue to be viable. Rightly or wrongly, would such a sense of exposure be beneficial in local government services, where overspends still feel “notional”, and where the financial precipice can be pushed to the back of someone’s mind?
I certainly don’t think that ADMs are the answer to all problems, and I strongly advise against the focus on the delivery model before focusing on what you are looking to achieve. From my perspective, what we really need is a focus on delivering our priorities, underpinned by financial grip and knowing what value we are achieving for the money we spend. However, in order to achieve the change we need, let’s not shy away from Local Government operating in a way that doesn’t feel very “local government” anymore.