Post NPM: from ‘Total Place’ to community budgets
In this section, we will illustrate post NPM policies—in which the NPM emphasis on specialization among service providers is abandoned in favour of ‘generalist’ service provision—by examining developments in local government.
Under the Labour government, the relevant policy was known as Total Place and involved a series of pilot projects designed to get different bodies in the local area (the council, police, fire service and hospitals, for example) to work together across institutional boundaries. The coalition government has instituted even greater delegation of responsibility to local areas through the financial tool of ‘community budgets’. This has been accompanied by a significant reduction in the accountability mechanisms applicable to local authorities, for example, through the relaxation of legal constraints on their powers under the Localism Act 2011, and the abolition of performance indicators. These changes have been presented as a means of giving local authorities greater discretion to change the way they work and to participate in shared service delivery arrangements.1. Total Place
Total Place was launched in 2009.[1237] It involved a set of thirteen pilot projects covering some 11 million people. These pilots brought together 63 local authorities, 34 PCTs, 12 fire authorities and 13 police authorities. The government defined Total Place in the following terms:
Total Place involves local public services working together to deliver better value services to citizens by focusing on joint working and reducing waste and duplication.[1238]
The pilot areas adopted two main strategies. First, the various public bodies analysed what resources they were spending in the local area and how they were spending those resources. This was intended to highlight examples of duplication and waste. One result of this has been increased sharing of ‘back office' functions between public bodies.
Thus, it is now the case that some district councils share a chief executive and senior officers with local NHS bodies.[1239] Second, the bodies engaged in ‘mapping' exercises designed to examine a citizen's ‘journey' through the system. These exercises were intended to highlight problems faced by citizens in getting help from public bodies and dealing with many different agencies. For example, in Leicester and Leicestershire, a project was set up to provide a single point of contact for local public services, so that citizens would be able to get the help they needed by calling a single number.[1240] This also cut costs because the councils were able to reduce the number of different call centres they operated.Central government's role in promoting Total Place focused primarily on the obstacles facing different local bodies where they wanted to work together. For example, a major part of local council spending was ‘ring-fenced': in other words, councils were legally obliged to keep it separate from their general funds and to use it for specific purposes. Of course, this provides a way of protecting particular services, but it also limits the flexibility councils have to use their resources in novel ways. In the 2010 budget, the then Labour government announced that £1.3 billion of local authority funding would cease to be ring-fenced. The government also took the view that some of its own performance monitoring of local government, through the Comprehensive Area Assessment (CAA) run by the Audit Commission, got in the way of joint working between local authorities and other bodies. It therefore proposed to reduce the number of performance targets that would be monitored in areas with successful Total Place projects.[1241]
2. New ‘freedoms’ for local authorities
The coalition government has continued the Total Place idea, but under new policy labels and in more radical ways. To quote the Secretary of State for Communities and Local Government, Eric Pickles:
Credit where it's due, Total Place...
was a step in the right direction... But... in the end it was far more talk than action. As I've said before, it was a bit like your Dad letting you go down the disco. And then hanging around outside all night cramping your style.[1242]A key characteristic of the government’s approach is the removal of various kinds of regulatory constraints on local authorities’ activities, with a view to freeing them up to reorganize the services they provide either internally or in collaboration with other councils or public bodies. The changes have three main elements: the extension of local authorities’ legal powers under the Localism Act 2011; the grant of greater financial freedoms; and substantial reductions in audit and assessment requirements. We will consider the place of private contractors in these developments towards the end of the section.
The coalition has used financial tools as its main mechanism for pursuing and developing the Total Place agenda. In 2011, the government piloted ‘community budgets’ in 16 areas of England.[1243] These are place-based budgets which pool public funding for a local area drawn from a range of different sources. The pilot projects have focused on services for so-called ‘problem families’ and involved bringing together money from local government budgets, Department for Education money for ‘early intervention’ projects for children, and European Social Fund money for job creation via the Department of Work and Pensions. The aim is to increase the number of areas with community budgets for problem families in future years.[1244] The government is also planning to pilot community budgets for other specific policy issues and, more radically, community budgets that put all public resources for a local area together into a single ‘pot’.[1245]
This has been accompanied by a significant move to reduce the financial constraints on local authorities. One of the coalition government’s major criticisms of Total Place was that it did not go far enough in giving local authorities flexibility in how to spend their resources because of the ongoing use of ring-fencing in budgets.
The government therefore abolished ring-fencing in local authority budgets in 2010 with the exception of funding for schools and for public health responsibilities.[1246]The removal of constraints did not stop there. The government has also made significant changes to local authorities’ legal powers. It is a long-established principle that local authorities, as creatures of statute, must be able to identify specific statutory authority for their actions.[1247] This has not, on the whole, proved difficult, since local authorities in fact have wide-ranging statutory powers. However, there have been some successful challenges to the vires of certain local authority actions, particularly during the 1980s when authorities engaged in some risky financial transactions in an attempt to combat the effects of budget cuts.[1248] The coalition government has taken the view that local authorities might be inhibited from adopting innovative ways of working because of the constraints on their legal powers. Section 1 of the Localism Act 2011 therefore contains a ‘general power of competence’ which is worth quoting at length:
(1) A local authority has power to do anything that individuals generally may do.
(2) Subsection (1) applies to things that an individual may do even though they are in nature, extent or otherwise—
(a) unlike anything the authority may do apart from subsection (1), or
(b) unlike anything that other public bodies maydo.
(3) In this section ‘individual’ means an individual with full capacity.
(4) Where subsection (1) confers power on the authority to do something, it confers power (subject to sections 2 to 4) to do it in any way whatever, including—
(a) power to do it anywhere in the United Kingdom or elsewhere,
(b) power to do it for a commercial purpose or otherwise for a charge, or without charge, and
(c) power to do it for, or otherwise than for, the benefit of the authority, its area or persons resident or present in its area.
In one sense, this provision is less radical than it seems. Central government has extensive powers because of the Crown’s inherent common law capacity to act.[1249] However, in a modern democracy founded on the rule of law, any move away from the principle that a public body must have a statutory source for its powers should be seen as a backward step.
There are some constraints on the new power under the Localism Act 2011. Where the general power overlaps with a pre-existing statutory power conferred on local authorities, and that pre-existing power is subject to limits, those limits also apply to the general power under the Localism Act 2011.[1250] Thus, the new power cannot be used to get round pre-existing constraints on local authorities’ activities. However, s 5(1) of the Act contains a broad Henry VIII power for the Secretary of State:
If the Secretary of State thinks that a statutory provision (whenever passed or made) prevents or restricts local authorities from exercising the general power, the Secretary of State may by order amend, repeal, revoke or disapply that provision.
This means that pre-existing restraints or, for that matter, subsequent restraints can be removed by ministerial order.
Sections 3 and 4 of the Act place limits on the extent to which local authorities can charge for their services and on their use of the general power for commercial purposes. Nevertheless, the new power is striking in its breadth. A particularly surprising feature is the grant of power to local authorities to do things ‘otherwise than for... the benefit of... [their] area', [1251] which seems to go against the very purpose of local government.
Finally, the coalition government has been highly critical of the detailed performance management regime put in place by the Labour government. As we saw above, the Labour government was itself proposing to reduce the number of targets applicable in areas pursuing Total Place policies.
But the coalition government has gone several steps further: it has abolished the CAA altogether, along with the Audit Commission, the public body responsible for its monitoring and management.[1252] It claims that the CAA inhibited innovations in service delivery because the need to meet its targets dictated to local authorities what to do. And, of course, there are savings to be made at both local and national level if CAA data no longer need to be collected and processed.It seems highly likely that private firms will play a role, in some councils at least, in redesigning services in response to these new flexibilities. Indeed, this process had already begun in some areas before the new regime came into force. According to press reports, the most radical such proposal was Essex County Council's planned £5.4 billion eight-year contract to design and run a wide range of council services.[1253] The council initially awarded two smaller contracts to IBM to run its ‘back office' and procurement functions, with the prospect of further contract awards over time. [1254] A similar plan to outsource multiple services to a single private provider, including both ‘back office' functions and the provision of some services to the public, seems to be ongoing in the London Borough of Barnet, though it has met with an angry response from unions representing council workers.[1255] In both cases, it is possible to discern a combination of deep and post NPM strategies at work. The post NPM element is the award of a contract for multiple services, with the requirement that the contractor achieve savings by redesigning the services to make them more efficient. Once this has been done, a deep NPM element emerges in which the contractor either supports the council in procuring different aspects of the redesigned services, or simply subcontracts for those services itself.
3. Accountability issues
The implications of post NPM policies for accountability are, if anything, more troubling than those of deep NPM. This has become particularly apparent as the coalition government’s radical approach to post NPM has emerged. Traditional mechanisms of accountability are being abandoned in favour of much less obvious or certain replacements.
The post NPM agenda focuses on giving local authorities greater freedom to decide how to deliver services. This is no bad thing in itself, and indeed is likely to be regarded by many as a beneficial reversal of many years of excessive meddling from central government in local authorities’ affairs. However, it is important not to over-estimate the extent of the change in central-local relations that is likely to be brought about by these reforms, for two reasons. First, the trend of stripping local authorities of key responsibilities continues in many policy areas, so although they are being given more freedom to make decisions, the scope of their policy responsibilities may still be in decline. Developments in education, such as academies and free schools, are a good illustration of this.[1256] Second, central government retains its most significant lever over local authorities’ behaviour: its control of the purse-strings. And in a time of austerity, local authorities’ new-found freedom will be limited by substantial budget cuts. It is a freedom to spend as they see fit, but only to spend what little money they are given.
The reforms discussed above to local authorities’ legal, financial and administrative accountability have been presented in terms of removing opportunities for central government control, in other words, as reforms to internal accountability from local to central government. However, the changes will also limit local authorities’ external accountability to the public in significant ways. After the Localism Act 2011, it is almost impossible to envisage how an aggrieved council tax payer might frame a successful application for judicial review on the ground that a local authority has acted ultra vires. Of course, we should not expect the courts to act as the primary accountability mechanism for local government, but they have acted as an important ‘emergency brake’ in the past.[1257] Similarly, the abolition of the CAA will reduce the amount of information available to the public to help them assess their local authority’s performance.
The government would probably respond to these criticisms by pointing to other ways in which local authorities can be held to account. The ‘redesigning services’ agenda is driven by the traditional NPM desire to improve the responsiveness of public services to their consumers, for example, by making services easier for users to navigate. And, of course, local authorities remain accountable to local people through the electoral process. Nevertheless, it is not obvious how voters will find out whether or not the local authority is delivering better services, particularly if they have no direct personal experience of those services.
Where a local authority chooses to provide services jointly with other bodies, or to contract out on a large scale, the problems are compounded by the difficulty of discerning who is responsible for particular decisions. For example, if the pooled community budget for ‘problem families' in a particular area is overspent, a dispute may arise between the various public bodies involved as to who is responsible for the deficit. One response to this might be to say that it is up to the project partners to reach a clear agreement at the outset that addresses some of these concerns: who is responsible for auditing the accounts, who sets the quality standards, and so on. The drafting of such agreements will require careful thought, but—in the rush to embrace new techniques—there is no clear government guidance on the matter.[1258]
Finally, and perhaps most worryingly, joint provision and contracting out in this area seem to limit the role of elected councillors in significant ways. Imagine the scenario in which there is widespread public dissatisfaction with local service provision and the political control of the council changes at an election. It is not clear whether the council's new leaders will be able to renegotiate agreements with other public bodies in pooled budgeting arrangements. Their ability to renegotiate or terminate contracts with private firms will depend on the drafting of those contracts and any break clauses they contain, and their ability to place new contracts will be constrained by the public procurement rules.[1259] Of course, elected officials have always operated in a constrained environment in which a variety of factors may limit their ability immediately to reverse the previous administration's policies, but under post NPM they may find themselves unable to take any action until a particular agreement is due for renegotiation. Again, therefore, the role of the state is compromised by these developments.
F.