Thursday, 25 August 2011

"More in sorrow than anger, guv" - the machismo of cuts or the protection of services?

Many thousands of words have been expended on the “cuts”. On whether they are necessary, on the pain that results from their imposition, as to whether they impact disproportionately on poor people or ethnic minorities or women (and, for all I know, on the fairies living at the bottom of social workers’ gardens).

In all this discussion I worry that little effort is directed to the strategies followed by public bodies – and especially by local councils – in response to the settlement “imposed” by a chubby former Worth Valley councillor. Most of these strategies – at least in the north – seem predicated on delivering the maximum amount of reduction in 2011/12. And this is achieved, in part, through the closing of “front line” services – swimming pools, libraries, resource centres and lollipop ladies.

There is no doubt that councils have to make significant cuts – described by some as a process of “re-basing” rather than mere reduction. The question is how we decide to achieve that new base level of budget – by draconian cuts this year, by a process of reductions during the lifetime (three years) of the recent local government settlement or over a long period of time altogether. For most councils all three of these options are available.

The advantage of cutting this year is that it gets the pain out of the way and allows a drastic pruning of services such as leisure provision and libraries. And most councils have wanted to restructure these services for some while but, because of the political pain involved, have not done so. Bradford’s facilities review in leisure and sport was first commissioned in 2002 and went through assorted iterations without ever being implemented. No council leadership wants to be the one to close swimming pools and sports centres after all!

However, the downside of rapid cuts is that decisions to close or reduce services are inevitably ill-considered. And the requirements for user engagement, consultation with affected employees and the scrutiny-delayed council decision-making process mean that – as we’re discovering in Bradford – it’s actually pretty difficult to deliver the savings needed in just one year. It looks likely that – without further front-line cuts – Bradford’s budget will be overspent in 2011/12. I am sure the same situation applies to many other authorities seeking to deliver reductions amounting to 10% or more of the net revenue budget.

The result of this strategy will be that the scale of cuts in years two and three of the settlement period will need to be greater than anticipated – risking further years of pool closures, higher charges for care and redundancies. The aim of taking a quick hit followed by a smooth, managed reduction to the new base won’t be achieved.

Some councils – Leeds appears to be an example of this – have taken the approach of, in effect, borrowing from future revenues to reduce the need for cuts in 2011/12. The same reductions are made over the same period as we see in Bradford but the smoothed profile allows for greater consideration and planning in service reductions. Closure or service curtailment is less ill-considered.

Under this approach – as is the case for the “cuts now” approach – the council concerned protects its reserves position and its capital programme. So far as long-term developments are concerned it is more-or-less business as usual. Thus Manchester protects its ‘flagship’ Town Hall project and maintains a range of separate funds alongside the core revenue reserve – after three years the reserves position of the city will change little as a result of cuts. There will still be over £200 million in reserve funds – roughly half of which will be available for spending.

My contention is that a council could use a proportion of available reserves to allow for the “re-basing” to take longer – perhaps five years rather than three. This would mean that many of the decisions to close services in 2011/12 are not necessary – we have a far longer period to consult, to plan and to design structures for future service delivery. Rather than witnessing a frantic rush to find community-led solutions to libraries this could be planned and implemented across the library estate – achieving front-line cost savings without the disruption of threatening the closure of the services.

Similarly, the “restructure” programmes many councils are implementing would be less risky and there would be more opportunity to discuss the things that are essential, the things that are nice to have if we can afford them and the things that, frankly, are an extravagance. 

It may be right to close some facilities, to stop providing some services but this shouldn’t simply be to save some cash. It is right for councils, for example, to get out of the business of providing old folks’ homes – we don’t do it very well and it costs a great deal more for us to do it when compared to the best of the private and not-for-profit sectors. But it would still be right if the government had given us a massive increase in grant.

I find it pretty hard to justify closing centres for disabled adults just to effect some savings in this year’s revenue budget – especially when we’ve best part of £100 million sitting in the bank. This money – there for a rainy day – could allow a restructure of the council, the reconfiguration of services and the stripping out of duplication, waste and indulgence over a longer period. And at the end of that period Manningham might still have a swimming pool and Denholme a library.

But the options put before councillors were driven by predetermined departmental spending limits rather than a medium term financial strategy worth the name. Councillors will have spent hundreds of hours trawling through lists of “cuts” prepared by officers and will never have stepped back to look at the whole picture – to ask about income as well as about expenditure, to discuss priorities and to consider what needs to be provided by the council and the size of a ‘re-based’ budget.

Above all, no-one will have asked whether the cash reserves – tens of millions at most top tier councils and hundreds of millions in some cases – might be used to reduce the immediate impact of cuts, to allow replanned services and to ensure that the reduction of unnecessary bureaucracy takes priority over the closing of services to the public.

I might be wrong. I’m happy to be shown how such a strategy would be mad, bad or dangerous. But I’m not happy to see disabled people losing services because the council can’t move quickly enough to get rid of layers of surplus management, to start sharing back office functions with neighbouring authorities and to make better use of the flexibility and innovation in the private and voluntary sectors.

It seems to me that the machismo of making cuts – "more in sorrow than anger, guv" – has triumphed over a desire to concentrate on making sure the public we serve get the services they deserve for all those taxes they pay.


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