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Cuts, Leadership and Democratic Management

December 1, 2010

Originally posted on 1st  December 2010 on the Research Republic blog.

The Association of Chief Executives of public services began its annual conference last Wednesday with the shock of the Comprehensive Spending Review (CSR) still resonating.  They discussed “closing, merging and doing much more with much less”, while the plenary speech considered the imperative of engagement with the private and third sectors. As the Guardian’s Janet Dudman commented yesterday, the sombre tone of the conference is understandable: the Association’s members “run the bodies that now face abolition and merger”[1].

David Clark, head of the Society of Local Authority Chief Executives and Senior Managers, noted wryly after the CSR’s release that Secretary of State Eric Pickles had failed to address his customary note to Councils, which usually underlines the benefits of the government’s plans, to their Chief Executives[2]. What the Secretary’s dead letter contained was a description of the “settlement” as lessened funding for greater freedom. The “emphasis must be on creativity and innovation”, he concluded, and so “councils must really put every aspect of service delivery under the microscope”[3]. But what do creativity and innovation mean to a public manager facing a 28% reduction in the government’s revenue support grant, except short form for ‘desperate measures’?

However, even this blackest of clouds has something of a silver lining. Few Local Authority leaders and managers will miss the Audit Commission or indeed the 4,700 central targets that have already been scrapped, and the Secretary of State cites plans to roll back many other data reporting requirements. This is not merely the ‘carrot’ complementing the ‘stick’ of cuts, as Peter Hetherington has suggested[4]: the ‘settlement’ points to changes that have been emerging for some time, but have now become starkly visible.

The first is the realisation of a dramatic shift in power and responsibility to the local level – which in many ways has not been acknowledged in its scale. The Local Government (Power of General Competence) Bill currently being debated in parliament expands the Local Government Act of 2000, giving each council powers to do “anything which it considers is likely to be of benefit”[5] for their localities and citizens. It is a mistake to see this move as mere compensation. The original Act, as the Local Government Association (LGA) argues, “was intended to provide flexibility for new, innovative services and initiatives and the development of new service delivery architectures”[6]. However, as Jon Coaffe notes, previous drives towards the local have often hidden centralising impulses in the form of an auditing, evaluation and scrutiny regime, as well as ‘earned autonomy’ tied to performance[7]. These pressures have too often curbed innovation efforts. A 2009 case brought against the London Borough of Brent prevented it from partnering with London Authorities Mutual Limited (LAML), a collectively-owned insurance firm set up to provide insurance for ten boroughs in total. “Both localism and council efficiency efforts received a rude setback”, writes Mark Smulian, when the case became a legal battleground over whether councils were permitted to set up partnerships such as LAML at all[8].

Underlying the interconnected challenges of localisation and innovation is a fundamental question of legitimacy. A consensus is emerging that a fundamental change is underway in the relationship between state and citizens, and as the recent response of students to cuts in higher education demonstrates, strong antipathy towards this new settlement is simmering under the surface. However, British citizens have complicated relationship with the welfare state. Recent data from IPSOS MORI suggests that while few respondents are eager to participate in delivering them, 58 per cent of the public wants to be engaged with shaping public services.  However, survey results in the study indicate that enthusiasm for “‘shaping how public services are provided’ is contingent on knowledge about the ‘opportunities that were available’ for involvement and there being ‘help and advice on how to’ be more involved with services’[9]. Dismantling the welfare state is, at this point, still unthinkable for the public. There remains great potential for drawing on social resources to support and contribute towards new approaches to social needs – but public services will have to lead the way.

The LGA argues that before the partnerships controversy, “councils were extensively involved in finding more economical ways to provide services through shared arrangements, particularly for back office and support services”[10]. Democratic Management allows them to go further. Its emphasis on co-production in the design, delivery and evaluation of public services means that collaboration with the public, the third sector and other public services becomes an integral part of an organisations mode of operation. Deborah Szebeko, director of the ascendant consultancy thinkpublic, has strongly advocated a model of “self-improving public services” that “have the skills and tools to engage, listen and innovate rapidly by listening to citizens and frontline staff”[11]. This highlights the importance of integrating engagement both inside organisations and in their outward relationships. However, Dudman suggests that considering the relationships between staff and management in the public sector – which even before austerity measures were often strained – the “difficulty for senior managers is that taking what might otherwise be seen as sensible steps to cope with the cuts crisis leaves them vulnerable to ridicule”[12].

The demands of localism and innovation converge on the public manager. The Centre for Cities, responding to the CSR, has expressed its concern for local councils in these terms:

While they will be able to make the reductions most suitable to their local area, much of the blame for where cuts land will fall on them. Strong leadership will be vital not only to make difficult decisions, but to communicate these to the electorate and to the public sector workforce that remains[13].

For this reason, the “tools and platforms” Szebeko advocates may not be enough: what is required is a profound shift in the culture of public sector organisations. Some of the necessary skills managers will require to this end have been sketched out by The Work Foundation in a recent paper – they include handing over ownership to staff, fostering autonomy, focussing on the cohesion and internal dynamics of teams, and perhaps most strikingly, “co-creation of vision and strategy”[14]. But surely the call for “a deeply connective philosophy” to help leaders “see how the people and systems in an organisation fit together” is essentially a call for democracy?

Dudman laments that public managers will face “difficult conversations” after this week’s conference. Only a democratic shift towards democratic practices can authorise managers to lead their organisations through straitened times. We suggest that the concept of democratic management offers the skills needed to negotiate such encounters, and to turn them into discussions of a future for their organisations and the communities they serve.

[1] Dudman, J. (2010), ‘Sensible steps to cope with cuts leave public sector managers vulnerable’, The Guardian, 24th November.

[2] Clark, D. (2010), ‘CSR – Lost in the post’, David Clark’s blog at SOLACE, 22nd October.

[3] Pickles, E. (2010), Letter to Leaders of Local Authorities in England, 20th October.

[4] Hetherington, P. (2010), ‘All councils are the opposition in this era of cuts’, The Guardian, 23rd November.

[5] The Local Government (Power of General Competence) HL Bill (2010) 55.

[6] Ibid.

[7] Coaffe, J. (2005), ‘New localism and the management of regeneration’, International Journal of Public Sector Management 18(2), pp 108-113.

[8] Smulian, M. (2009,) ‘Laml ruling sends councils back to the drawing board on co-operation’, Public Finance, Undated.

[9]2020 Public Services Trust (2010), ‘What do people want, need and expect from public services?’.

[10] The Local Government (Power of General Competence) HL Bill.

[11]Szebeko, D. (2010), ‘Point of contact’, The Guardian Public, 15th June.

[12] Dudman, J. (2010).

[13] Larkin, K. (2010), ‘The implications of the Spending Review for cities’, Centre for Cities.

[14] Tamkin, P., Pearson, G., Hirsh, W. and Constable, S., (2010) ‘Collective leadership for sustainable high performance’, Paper to the Principal Partner Exchange Forum, The Work Foundation.

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