Is it Our NHS or Their NHS?

I'll start with a little celebration. A senior finance officer from our local NHS presented to Bradford's Health and Wellbeing Board. Now if you'd made a habit of reading Twitter or The Guardian you'd be very worried at the content of this presentation - the pain, the stress, the cuts....AUSTERITY!

The officer opened with this (I paraphrase from my notes but it's close enough):

"The NHS has £800 million to spend across the three CCGs. This number is not going down but is rising. However, it's not growing at the pace we think we need to meet demand."

This, dear reader, is the truth about the NHS. When you see parades of nurses waving banners about 'saving the NHS', you're led to believe - it's implicit in the protest - that the health service is suffering draconian cuts when the truth is that the rate of growth for the NHS simply doesn't keep up with the growing pressures. And every report, each presentation we see from the officials of the NHS repeats the need for system change - words like co-production, self-care and prevention dominate the pages of PowerPoint flashing up on the screens. And this is great.

There is, however, another theme and it is this that explains the 'Save Our NHS' campaigns and the heartrending tales of cuts and awful austerity. It cropped up in today's presentation - the first three lines in the list of economies to be made were all about workforce efficiency, pay restraint and savings in administrative staff. It's not 'Our NHS' we're saving, it's 'Their NHS' - the anger about cuts and austerity is mostly a response to the NHS applying the same cost management practices that private business and, latterly, local government have used.

This isn't to say that all is rosy in the NHS or even that it is grossly overmanned but rather that a system predicated on annual increases in costs significantly above inflation is simply unsustainable. It's not a solution - as some seem to think - to create a hypothecated tax unless you plan on making the rate of that tax increase by 5% each and every year. The solution lies in stabilising the cost base and this, whatever those banner-waving NHS employees may say, means cost controls. And the NHS's biggest cost is wages.

What we're seeing with the NHS Action Party, with the doctors' strikes and with the sanctifying of all NHS employees, is an endeavour aimed at drawing the public into defending the interests of the health service's employees. For many this is right - these are deeply caring, highly skilled people - but it covers up the truth. The reality is that, without different ways of working including those involving fewer staff, the NHS is not sustainable. None of this is about privatisation, market forces or some sort of dark and evil Tory conspiracy to destroy 'Our NHS' - it's simply a necessary process aimed at ensuring that, so far is practical and possible, we retain that central idea of a health service free to all without favour at the time they need that service.

Here in Bradford the forward look at NHS finances tell us that, without changes to the way we work, there will be a deficit of over £200m by 2022/23 - this scales up to a national deficit of £20 billion. It doesn't require much analysis to conclude that this simply can't be met. So the result is that we have to make these cost savings and since over 75% of NHS costs are wage related, the biggest chunk of those savings has to come from staffing. The impact of strikes, protests and campaigns won't be that these reductions don't take place but rather - as with almost every campaign of this sort in recent history - with the resultant cuts being more extensive, more painful and more damaging.

If you want it to really be Our NHS then you need to start by rejecting the militant 'Save the NHS' campaigns and instead support a considered, rational and planned approach to reforming the NHS. This means better use of technology, it means partnership with the private, charitable and voluntary sector, it mean promoting the idea of healthy ageing and it means working with local councils to improve case - at home and in the community - for the elderly and disabled. It cannot mean supporting current structures, systems and staffing levels - if we do that we will be the losers as the NHS fails to meet our needs and the needs of our neighbours.

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It's time that NHS management started earning those big bucks they get paid

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It's a couple of weeks before the latest 'comprehensive spending review' so we can all understand the explosion of shroud waving, sorry tales of budget cuts and screams of 'crisis, crisis'. Indeed I've indulged (I think rightly) in a little bit of this myself.

However, we need to think very carefully about what we mean by 'crisis' - as in 'the NHS is facing financial ruin':

By next year, hospitals’ deficits may have escalated to such a degree that the NHS could face widespread financial collapse.

Now it's true that hospitals (and the writer is Chief Executive of a hospital trust) are facing something of a problem. We saw recently that the total deficit has reached over £800m and that most of them report continuing pressures on delivery. But Christopher Smallwood, the writer here, is just scaremongering as part of a timely lobby.

The inference in these arguments is in two parts - first that hospitals are the NHS and second that the problem is a consequence of cuts to the NHS budget. Neither of these two suggestions are right - hospitals are responsible for just about half of NHS spending and expenditure on the NHS is programmed to rise (funnily enough by the £8 billion the NHS said it needed and the government promised).

The problem here is that while the Department of Health has a specific amount of cash allocated though the national budget, this doesn't apply to hospitals - NHS Providers in the jargon - which operate on a tariff system and mostly get paid according to how many operations (or whatever) they undertake. As one consultant put it to me - 'each time a new patient arrives in hospital for an elective procedure it's "kerching, kerching".

The problems with this system are many and varied but the most egregious is the widespread belief in hospital management that fewer patients means less money for the NHS. The managers (who really should know better) think that because their hospital gets less money this means that the whole system has less money. And this gives rise to one of the more pernicious criticisms of extending the choice of providers in the health system - 'cherry-picking':

Around half of all NHS-funded hospital care – about £40bn a year – is paid for through a national tariff, where hospitals are paid a set rate for each patient, depending on the treatment given. As private hospitals generally do not treat complex or emergency patients, critics claim private contractors can profit by “cherry picking” easier patients.

What you need to understand here is that we're being told (by those same people complaining of inadequate funding) that the NHS should commission more expensive provision through general hospitals because otherwise those hospitals, in some way, would be less viable. Instead of purchasing elective surgery from the lowest cost provider meeting the necessary high standards, we are commissioning from general hospitals on the false premise that the more cost-efficient approach would cost the NHS more money.

The central issue for the NHS - and one of the reasons it has failed to meet (or even tried to meet, in truth) its efficiency targets - is that the dominance of general hospitals over the system has made it nigh on impossible to develop a market of specialised providers or to shift low-risk procedures into primary care. The moment these systems start to reach the point where their impact on the system is positive (ie releases more money for other NHS activity) the result is NHS Trust deficits giving the impression that there is some sort of crisis. This may or may not be the case but so long as the hospitals' budgets assume utter market dominance, we will continue to fail in making any meaningful efficiencies in the NHS. And there'll be this gun pointed at the government's head:

The choice is stark: more money every year or a sustained decline in the standards of healthcare and a financial collapse. How much more money? Even if the efficiency gains achieved in the next five years matched those of the past five, the government would need to increase annual budgets by £2bn-£3bn a year between now and 2020 to preserve standards. But since the NHS cannot continue to raise productivity at this rate, at least £4bn a year extra will be necessary, starting in April.

When I look at what local government - for all its faults and failings - has delivered over the past five or six years, I am forced to assume that these same opportunities exist in the NHS. But I - like the government and the public - would like the management of the NHS to make those changes without the blunt instrument of actual cash budget cuts. So far that management has avoided anything that requires structural changes and have resisted - to cries of "no privatisation" - any substantial attempts to use the private sector to help develop a significant and innovative delivery of high quality elective surgery and treatments.

I'm prepared to defend the high salaries of NHS management but that, I think, gives me the right to tell them that they need to up their game. If we're going to pay NHS Trust bosses £200,000 or more then those bosses need to start showing the creativity, innovation and invention those big bucks are paid to secure. And the message to people like Christopher Smallwood is to stop waving shrouds and start to make the case for a dynamic, flexible and responsive system - even if it means there are fewer huge general hospitals and more small, specialised and independent providers.

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So how much power do your councillors have?

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It's not new to say that local government isn't really master of its own destiny. Nor would I be the first to observe that local councillors - the people we elect to make decisions about that local government - have even less control over that destiny. Most thoughtful local councillors know that the big decisions about funding are outside local control and also that many of the ways in which that funding is distributed are not within the local council's gift either.

Back in 1961, when my Dad was first elected to the Municipal Borough of Beckenham, local councils undertook duties placed on them by national governments (e.g. refuse collection) but the funding for those duties, as well as the other things a council chose to do, was entirely raised locally through the rates or through charges. There was no revenue support grant, no centralised setting of business rates and no national fee levels. It was down to the councillors.

Between then and now something changed. My Dad always blamed the 1970 Local Authority Social Services Act for starting the rot but whatever the cause we moved from a situation where local government was controlled locally to a situation where, for most councils, what they do is defined by national regulation and the necessary funding provided by central government. In 2011 local government spent £147billion and £103billion of this - 70% - was central government grant funding (one caveat here - this is a net spending figure not a gross spending figure, the £147bn is the call on tax revenue from local government).

Not surprisingly governments have sought to control this level of expenditure (it is about a quarter of total government spending after all) and to try and direct the way in which the money is used. To understand how this budget works we can divide the activities funded through local government into three areas: education; social services and social care; and municipal services (bins, potholes, parks and so forth). This is an oversimplification but helps to explain how local government actually works.

For education the local council (as 'local education authority') is two things - a route for money to be paid to schools and the provider of services to those schools. The bulk of the funding is in the form of the Dedicated Schools Grant (DSG) - the formula for distributing this grant is defined nationally but administered through a schools forum rather than, as in times past, a committee of the local council. The schools forum is not an elected body, it is not accountable to the council and its membership is institutional (schools, LEA, unions, colleges, etc.). Put simply, local councillors do not control the funding of schools. So when you blame your local council for not improving education try to remember this fact.

In the case of social services and social care local councils provide services in response to demand - or 'need' if you prefer the approved social care word. The budget is what the US Federal Government would call "relatively uncontrollable". In any given budget period the council has to estimate how many people will require social services and/or social care. That's how many children might be taken into care, how many disabled people will require support, how many of the elderly population will need home helps and so forth. Since education funding is effectively outside the local authority this is the biggest area of council spending. And while councils have some funding flexibility, at bottom they have a duty to meet the need identified.

Municipal services consists of everything else the council does - this includes statutory services such as planning, libraries, youth services and the registrar of births, marriages and deaths. As well as those things we tend to think of as what councils do - empty our bins and maintain the roads, run parks and provide swimming pools. Councillors do have more discretion over these services and over how much funding they receive. For some things - swimming pools and public lavatories, for example - the council has absolute control and can open or close them as it wishes.

The truth of all this is that 80-90% of the spending and activity undertaken by your council (or councils if you live in the shires) is simply given - determined by regulation, set out in statute or otherwise required by central government. And three-quarters of what your council spends comes in the form of central government grant - with all the strings and restrictions that come with this. Ministers and bureacrats down in London will always want to make sure that, wherever possible, the agenda of the national government is met by the local council. As a result we have had restrictions of borrowing, limits to tax-raising powers such as rate capping, the use of regulation or ring-fencing to direct spending and, if all else fails, simply removing any power for councillors to control or change what the council does. We even got an instruction this year to hold a 'named vote' on setting the council tax!

So when, as we did in Bradford yesterday, councillors get together and "set the budget" bear in mind that what you're seeing is a finely tuned political row about a few million quid out of a budget totally over a billion. The budget debate - "we've found £200,000 to invest in saving kittens", "the Tories are casting old people into the darkness by reducing the walking stick budget by £50,000" and "Labour are failing youngsters by removing the swing seat cleaning service" - this debate isn't really about the budget at all, it's about the tiny bit of the budget that our system of local government allows us to control.

Sometimes it makes me wonder?

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On the setting of council budgets...

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Bradford Council is about to set its budget for 2014-2016. I can hear your excitement at the prospect, the sounds of cynical snorts echo through the grand rooms of City Hall, even the odd snigger is heard. "Budget! Useless shower, what do they know about budget!"

All eighty-nine of us Councillors will troop into the Council Chamber at 16:00 tomorrow clutching our agenda and our copies of the budget. Few will have read the budget.

Your cynicism has turned to rage as you splutter - "what d'you mean, haven't read the budget?".

Absolutely most won't have read the budget because the Labour-controlled executive only published said budget yesterday - 48 hours before we get to vote on it. This was the last possible moment at which they could publish - leaving the rest of us with little or no time to read, absorb and propose amendments in time for the deadline for submission of those amendments (10:00 on the morning of the full council meeting). Bearing in mind that the Finance Director has to sign off any amendments.

I shan't bore you with the details of the Labour budget. Suffice it to say that they've done what we expect them to do - make cuts they don't need to make for maximum political impact and charged local residents as much as they possibly can for the pleasure of not receiving services they used to receive.

What bothers me is that, for all the council leader's protestations about the 'budget process', this is how we've always gone about the task of setting a budget in excess of £1 billion. A flurry of activity as we argue the toss over a few million quid. As my grandfather once said about the budget for Penge Urban Distrct Council (of which he was Chairman): "the amount of time spent on an item is in inverse proportion to that item's cost".

So Bradford Council's gross budget is around £1.2 billion. And we are scrabbling around down the back of the sofa looking for about £1.5m so we don't have to withdraw youth services from any community where the youth aren't actually running riot. And £65,000 to keep the public loos open in Haworth (a place that gets several million visitors every year).

At the end of the meeting we will have fulfilled our responsibility - setting a Council Tax for 2014/15 (and, yes, Labour propose an increase) and agreeing the associated budget. The problem is that none of the Councillors and few, if any, Council Officers will have read the whole of this budget. I know that, having done my best to wade through the budget, I will have missed something. And, at some point in the year something will come up and the response will be: "oh, it was in the budget" accompanied by a finger pointed at the offending line.

I could say that this is no way to run anything but, given the scale of Bradford Council, I can't see any way in which setting the budget can be anything other than 'top line'. And this means that, rather than the 'budget management' approach most councils adopt, we should use a priority-setting approach. At the planning stage, regardless of statutory duties and the exercise of statutory powers, we should ask what it is we think the council must do, what we think is nice to have and what is essentially a waste of time or money (or both).

There will be some things the council sees as a waste that have to be done because some numpty down in London says so ('equalities impact assessments' spring to mind here) but, by deprioritising them, we reduce the cost to the minimum needed to meet the duty. In contrast, there will be things we consider absolutely essential but which aren't a duty (providing public lavatories, for example).

The hard part of this approach to budget setting is that your decisions - I'd close down the essentially useless smoking cessation services, for example - will result in criticism from those associated with the service. A climate change department (Bradford has one of these) would be down near the bottom of my list of essential council services but the greens and 'save the planet' obsessives may take a different view - very loudly.

Most of the time the result of this process is that no-one is satisfied but equally there isn't enough dissatisfaction to result in big protests or (much more concerning for councillors) people voting you out of office. The result is that essential services are run on the same rickety basis as 'nice to have' services and bureaucracy we can do without. A sort of shared pain.

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On consultation...

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Local government is encouraged - in that gloriously passive aggressive manner beloved of the Department for Communities and Local Government - to "consult" on the setting of budgets. And Councils, carefully and studiously adhere to this requirement setting about extensive and carefully planned consultations.

This evening I attended one of those consultations. Not in Bradford but elsewhere to see what it looks like from the perspective of a consumer of consultation rather than a producer. The Council in question has gone to a lot of trouble - a structured and engaging process, lots of nice technology and a slightly patronising presentation that had the merit of not quite saying "this is all too complicated for ordinary humans to comprehend."

I understand that this show had been on the road - popping into different locations across the borough in question to do the consultation with folk for whom going into the town centre is a rare (even unlikely) occasion. Tonight it arrived in town complete with the Council leader, Chief Executive, Director or Finance and a collection of other councillors and officers. The Council in question has made a genuine and substantial effort to "consult".

And they engaged with about 30 members of the public (including several like me who are offcumdens and only there because our professional life requires it). And this - the lack of public - underlines the problems with consultations. Let's assume that the consultation roadshow stopped at twenty places, each generating 30-50 members of the public. That's 1000 people who have taken part in the consultation out of a population of over 200,000. Those people are not representative - indeed the chances of them having (as I did) a vested interest in one or other aspect of the Council's work is, I suspect, pretty high.

There is no way that - however hard the Council has tried - this consultation can represent the views of the local populace. And this begs a question about the whole process - the perceived need for this "consultation". It seems to me that this "need" reflects the loss of confidence in representative democracy rather than any improvement to the processes of government.

Today, rather than our role of representing the people who elect us in the decision-making of the Council, us local councillors are told we are "community leaders". Instead of representation our role is to act as some sort of cheerleader for endless processes of "engagement" and "involvement". Yet, despite this change, 90% of the population remain neither engaged nor involved in these processes. And the result of this disengagement and non-involvement is that consultation processes become captured by the interested rather than reflecting of public concern (let alone opinion).

The odd thing is that us councillors are told our authority is undermined by low turnouts. Yet around 4,500 folk took part in electing me - almost certainly more that will take part in Bradford's budget "consultation". And in the course of the year I will speak to hundreds of those folk - listening, arguing and, if you must, "consulting". All that these requirements to consult do is to further undermine the role of the councillor.

We replace electoral accountability with consultations that fail to reflect the views of most people, can be manipulated by the interested and that are controlled by council officers. I see no point or purpose to them.

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Local Councils increase reserves (what was that about cuts?)

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The LGA is weeping crocodile tears about Council's using reserves to manage the process of budget reductions (we should really call it 'rebasing' but that is rather too much of a jargon term for little old me). Apparently prudent local councils (who have stashed away £17 billion for a range of rainy days) will run out of money if the "cuts" continue:

...the LGA has said that the £17bn saved in cash reserves by the most prudent authorities will be used up in five years time if employed for the management of Government austerity measures. 

Of course a council may choose to use some of its reserves to extend the period over which the budget is reduced from its current base to a new base. This allows for fewer redundancies, gives space for effective service redesign and allows for the impact of any service reductions to be ameliorated. It is - in a period of savings - good budget management. Which explains of course why Bradford's Labour leadership has chosen to keep the reserves and cut the services. I call it the machismo of cuts.

But the LGA then comes up with a whining little reason why Council's shouldn't spend reserves:

This will leave councils without funds to invest in growth promoting infrastructure projects or support any further financial risks...

Pretty scary! Especially when we see the actual situation - what has really happened to reserves during this period of massive budget cuts:

Over last year, town halls outside of the capital were found to have added £2bn to their reserves, while authorities within the Greater London Authority furthered their reserves by £0.6bn. 

So it seems that, during a period of severe budget cuts, local councils have managed to squirrel away yet more cash for ill-defined and often unspecified future purposes - "strategic revenue reserves" and "change programme funds" abound providing senior officers and politicians with handy little slush funds to bung at preferred schemes and vote-buying campaigns. 

But the boss of the LGA - a Tory for heaven's sake - still bleats on about how this is all terrible:

'Councils are working extremely hard to shield frontline services from the 28% cut to the money they receive from Government. But cash reserves can only dampen the impact, not fill the gap. If councils plundered their reserves to cover the cuts, the cupboard would be bare within five years and there would be nothing left to invest in the growth promoting projects Britain desperately needs.’

So tell me Cllr Cockell, why aren't councils investing in these 'growth promoting projects' now? Why are councils continuing to hoard cash - Bradford has over £170 million, Manchester getting on for £250 million - against some proverbial rainy day? What are revenue reserves for if it's not to allow effective restructuring and the proper management of a reducing budget?

This is just special pleading - I would say ignorance but I simply don't believe that the leadership of the LGA are ignorant. This is deliberate wibble, an attempt to wangle a little more cash out of the government this autumn. That is all.

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People want their Council to fix the roads...

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Perhaps not a surprise to those politicians and bureaucrats actually plugged into real life:

A poll by May Gurney suggests the British public believe highway maintenance and improving local road networks should be the top priority for councils.

The research found 41% of the population wanted local roads improving compared with 33% which wanted better services for the elderly.

 

Perhaps Bradford's leaders will come to regret that 50% cut in highway maintenance then?

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You mustn't scrutinise budgets...

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Bradford's Children's Services Scrutiny Committee took an item on the 2011/12 budget for the service and made a resolution:

Resolved –

(1) That the Strategic Director, Children’s Services be requested to progress the resolution of Council with regard to monitoring how the Pupil Premium was spent and report back to this Committee at the meeting on 29 November 2011.
(2) That a report on the budget savings 2011-12 made to date; the risks in achieving the remainder of those savings and details of specific pressures on the service be presented at the meeting on 29 November 2011.
(3) That a detailed breakdown of efficiency savings be provided at the meeting on 29 November 2011.

ACTION: Strategic Director, Children’s Services

Now you'll agree that this all seems perfectly reasonable - the Committee has asked some sensible questions about an important matter. However, the Council's leadership think otherwise and the Chairman is now told that such a resolution is outside the remit of the Committee since it might stray into the discussion of a budget for 2012/13.

What utter nonsense. On stilts. What is the point of scrutiny if it can't scrutinise?

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"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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The NHS budget is growing - so why are they sacking nurses?

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Nothing, absolutely nothing makes the case for NHS reform better than this piece of shroud-waving from the nurses' union, the RCN:

Last November the RCN identified 27,000 likely NHS job losses during the next three years – but has now raised the estimate to 40,000.

Based on 9,650 posts at risk across 21 NHS trusts, 54 per cent of looming job losses involve clinical staff such as doctors, nurses and midwives.

The proposed job cuts analysed were a mere ‘snapshot’ of Britain as a whole, the RCN said.
Its chief executive, Dr Peter Carter, said: ‘Cutting thousands of frontline doctors and nurses could have a catastrophic impact on patient safety. Our figures expose the myth that frontline staff and services are protected.’

This reduction comes at a time when (along with international aid, for some bizarre reason) health spending is the only part of government spending not facing budget cuts. Here are the figures for resource 'departmental expentiture limits' from 2010/11 to 2014/15 (i.e. the budget excluding capital spending):

2010/11    £98.7bn

2011/12    £101.5bn

2012/13    £104.0bn

2013/14    £106.9bn

2014/15    £109.8bn

So the effect of an increase in funding for health care is the sacking of 40,000 employees (a suspiciously round number, by the way, so probably nonsense), half of whom according to the RCN will be from the clinical and medical staff. Part of the problem may lie in inflation but most of it can't - the NHS is incompetent, wasteful, inefficient and poorly led at every level. And the reason for this is that the consumers of healthcare - that's us the population of the UK - cannot exercise that consumer power. The various health unions - RCN, BMA, RCP and others - direct their attention to government. These organisations have been enormously successful:

NHS expenditure on doctors has doubled in the past five years. In 1999 the NHS spent £3 billion on their pay, increasing to £6 billion in 2004. The pay rise has not been matched by any significant increases in productivity.

And this has continued:

The figures show that, in 2000, the mean earnings of a consultant were £71,900. But by 2009 this figure had risen to £120,900 – an average yearly increase of 5.9 per cent. In contrast, across the whole of the pubic sector salaries rose over the same period by 4.5 per cent. For the private sector the rise was 3.7 per cent.

Staffing accounts for around half the total NHS budget and about 70 per cent of hospital costs. The Office for National Statistics recently estimated that productivity across the NHS as a whole fell by 3.3 per cent between 1995 and 2008, an annual average decline of 0.3 per cent. This was partly due the huge influx of new money in the early 2000s.

It seems to me - and the evidence supports this contention - that huge increases in "investment" have not brought the intended improvements in healthcare. Not that the NHS is always bad - thankfully around 64% of people surveyed are "satisfied" or "very satisfied" with the service rising to 80% with GP services. But this still means that nearly four in ten people aren't satisfied with the NHS and one in five are less than pleased with their GP.

Reform is needed - not moving procurement responsiblity about within the NHS family but shifting power to the consumer, to the patient. The last government set in train a fundamental shift in social care for adults - moving commissioning from bureaucrats to users through what is called 'personalisation'. While medical interventions are different there is a great opportunity to apply this principle to healthcare. At the same time the process of giving institutions - hospitals, clinics and so on - independence need speeding up. The lessons from the academies programme in education - real improvements from granting schools greater local autonomy - need to be learned and we need to stop viewing the NHS as a single monolithic service provider.

But most of all, we have to kick the BMA, RCN and RCS out from any positions of influence - these are simply trades unions and have no interest in the public. As with all trade unions their job is to secure the best deal for their members - nothing else. The government and health management should deal with them on that basis.

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Only £20 million in reserves, who are you trying to kid Cllr Priest? A little more on Manchester's budget.

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Danny Alexander, number two at the treasury has joined in the criticism of Labour Councils and, in particular, Manchester City Council. Mr Alexander points to Manchester’s levels of reserves as an area of concern:

In an attack on local authorities which he accused of sitting on reserves of more than £2.6 billion, the Liberal Democrat minister claimed that Labour preferred to blame the Government for job losses and cuts to services rather than dip into “rainy day” funds.  He singled out Manchester City Council, which this week announced cuts of £109 million while running a reserve of £108 million.

And Manchester’s response is a classic of spinning nonsense:

Councillor Bernard Priest, executive member for finance at Manchester Council, said, however:

"There has been some suggestion that Manchester City Council has somehow been hoarding a massive war chest of reserves while having to lay off staff.  I want to make it perfectly clear – this is untrue. Our reserves had been set aside to pay for necessary projects, such as new school buildings, job-creating projects in the city centre and the essential refurbishment of Central Library.

“However, our voluntary severance and early retirement package is primarily being funded through raiding these reserves. We are sensible with what we keep aside for a rainy day and it is about £20m. This is exactly what our auditor tells us we should have in the bank."

Before I make a further comment about those reserves – and Mr Alexander understates them – let’s be clear that Cllr Priest is talking absolute nonsense, confuses capital funding with revenue funding and is either being misled by officers or else shouldn’t hold the position.

So Manchester City Council’s reserves (and this doesn’t include the City’s £120million plus shareholding in the Airport of course). These are figures from March 2010 – the most up-to-date comprehensive statement of reserves available publicly:

Capital Receipts Reserve (£14.7m)

Major Repairs Reserve (£1.9m)

General Fund reserve (£23.0m)

Housing Revenue Account Reserve (£49.0m)

Collection Fund Adjustment Account (£2.7m)

Unused Dividends Reserve (£4.0m)

LMS Reserves (£19.2m)

Development Fund Reserve (£4.0m)

On-Street Parking Reserve (£1.8m)

Service Improvement Fund Reserve (£5.1m)

Capital Fund Reserve (£48.1m)

Town Hall Reserve (£18.6m)

Public Lighting PFI Reserve (£6.9m)

Insurance Fund Reserve (£17.3m)

Closed Schools Reserve (£3.6m)

Community Care Reserve (£2.6m)

LAGBI Reserve (£5.7m)

Cleopatra Reserve (£1.1m)

Area Based Grant Reserve (£5.8m)

Planning Delivery Grant Reserve (£5.0)

B of the Bang Replacement Reserve (£0.3m)

Pension Contribution Reserve (£4.6m)

Other Revenue Reserves (£6.8m)

All this adds up to £258.2m – an awful lot of money sitting around in an organisation claiming to be strapped for cash! Without touching the housing and education provisions (although one assumes they could be directed to these areas) or the capital programmes there is £56.7m available. This is some £30m greater than the amount Cllr Priest thinks prudent to retain and could have reduced the negative impact of this year’s settlement on local people and local services.

And one final thought – Manchester and Bradford have similar populations (483,800 and 477,800 respectively). Take a look at the budgets:

Manchester (gross): £1,795m

Bradford (gross):      £1,283m

Manchester (net):  £678.9m

Bradford (net):       £433.5m

So per capita government grant in Manchester is £1403.30 but a measly £907.30 in Bradford!

The budget Manchester City council might have set.

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Much furore has surrounded the publications – amidst great fanfare – of Manchester City Council’s budget proposals for 2011/12. These proposals have been flagged up as terrible, draconian and are accompanied by appropriate hand-washing and wring from Sir Richard Leese, the Council leader:

People should blame the coalition for “ideological” cuts, he said. 

 “A responsible government would never have done this. We would not have been cutting as fast or as deep as we have been forced to do.

What follows is – so far as I can from the selective and selected information published in this Council’s Executive Papers – an attempt to show how Manchester City Council might set a budget with minimum impact on ‘front-line’ services.

But first let’s set the real measure of the reductions relative to Manchester City Council’s spending. We do not yet have the final accounts for 2010/11 (not surprising given that the year hasn’t ended) so – given that the published 2011/12 budget documents do not include this information – we will use 2009/10 final accounts as an indication of the City Council’s total spending. These Accounts show that total expenditure in that year was just a shade short of £1.8bn. It is safe for us to assume that the outturn for 2010/11 will be of the same magnitude (source: Annual Statement of Accounts 2009/10).

According to the published budget documents, there is a shortfall of £109m for 2011/12 – representing a reduction of approximately 6% in total spending. It is this reduction that has been the source of the furore. However, we need also to take note of some other information relevant to our discussions of this budget:

1. The Council had already planned savings amount to £40m for 2011/12 as part of a medium term financial strategy agreed in February 2010 – before the budgets of 2010 and, of course, before the General Election
2. Just over £30m of the grant reduction faced by Manchester comes from the ending of Working Neighbourhoods Fund (WNF) – this was a time-limited funded established as a successor to Neighbourhood Renewal Fund (NRF) and targeted to areas with the highest levels of worklessness. The fund was planned to end in March 2011.

So £70m of the £109m savings are already accounted for in the Council’s medium term strategies. True the end of WNF will result in the closing of some valuable programmes and activities and the tight financial situation makes mainstreaming difficult. Nevertheless, this reduction has to have been planned – assuming a modicum of financial good sense in Manchester.

Within the budget documents, the Council identify a further reduction of £11m in the cost of the ‘corporate centre’ which can be taken with additional savings (12-15m) in procurement and containing price rises to reduce the shortfall to around £13m. Still a significant sum perhaps resulting in some front line pain but not the screaming cuts decried by their proposer, Sir Richard Leese!

And now for the final revelation- Manchester City Council has nearly £270m in ‘useable reserves’ (Annual Accounts 2009/10) – money set aside for various prudent purposes. These reserves are provision for a rainy day, so-to-speak! And if now isn’t a rainy day, I don’t know what qualifies! Some of these reserves could be directed to smoothing the impact of service reductions, on developing community delivery and bringing voluntary organisations into service delivery and on ‘spend-to-save’ initiatives.

It seems to me that Manchester City Council had no need to make the sort of cuts it has proposed today. I will add the caveat that I am not party to all the financial information – only that provided by the Council in its public forums. And I’m not saying that any service changes aren’t needed – merely that the proposals seem to be about maximising the pain rather than making a steady, planned and strategic shift in the Council’s operations.

Feel free to rip into my calculations, question my assumptions and challenge whether or not there are service cuts in what I propose. But while you’re doing that think of the people of Manchester who seem to be facing targeted and painful service cuts – either to provide substantial cash headroom for future years or else so Sir Richard Leese can make a big political point.

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Bradford Council transparency - hiding behind the lawyers

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Back in October 2010 my esteemed Colleague, Cllr Glen Miller asked the Council's leader about the matter of opening up the Council's expenditure to public scrutiny. Essentially, we are looking to join Hillingdon, Windsor & Maidenhead, Worthing and other local councils in publishing on-line all items of expenditure in excess of £500.

However, our leader demurs, choosing to hide behind lawyers. In the formal written answer he said:

There are over 9,000 records detailing expenditure over £500 that need to be published. Whilst we are technically ready to publish (the website page and extracts are complete), legal advice says that unless we can be certain that all records do not form part of a Commercial Confidentiality clause in the contract then the Council could face a legal challenge until the request becomes law, which is expected in January 2011.

So the Council's lawyers are worried that we might be sued for being honest about our spending. One does wonder how those other authorities have managed! However, Cllr Greenwood - for he is our leader - elaborated further (after a load of waffle about protecting women's refuges) in a verbal response to Cllr Miller's supplementary question:

Supposing we breach commercial confidentiality then we are subject to being sued so I looked at it. In principle I think we should do it. If the law comes in then you have got the defence of the law.

This is of course complete nonsense - even after the requirement to publish comes in, Council's have to protect commercial cofidentiality. And let's be very clear, saying that we paid Bloggs & Co three grand to do some groundworks at a park - or indeed paid anything to any company - is not a matter of commercial confidentiality. It is right to either aggregate or redact names in the case of payments to individuals (for example, a discretionary grant for someone to attend a dance school) but, as already noted, other local authorities have managed this without complaint or mishap.

This is a case of hiding behind lawyers - the leadership and senior officers simply don't want to publish the full information about how they spend our money. Even though we could publish the information tomorrow.

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