Local government is facing a period of significant change driven by budget cuts and rising demand for public services. By 2020, councils are likely to look very different than they do today
The first wave of change is already happening in local government, and in some areas it will probably continue into 2012. In this stage, local government as a whole will focus on traditional cost cutting as councils deal with two years of very steep cuts. This means redundancies, reductions in service levels and conventional outsourcing where it can deliver rapid savings.
The second phase of change probably kicks in at some point in 2012. This phase will be defined by most local authorities moving some way down the road towards a slimmer strategic core, with more services delivered at arm’s length through a wide variety of delivery bodies.
But within this shift there will be some important variations. Some councils will try to maintain their current organisational form, reviewing and modernising their in-house provision, often with a renewed focus on democratic structures and citizen voice. A second group – probably the largest – will be pragmatists. These councils do not have a grand vision, but will review services piece by and piece and see what emerges.
A third group, composed primarily of large unitaries and counties, will move to a much slimmer core and will deliver almost all their services through some form of outsourcing, whether a trading body, a regulated market or a traditional outsource. A final group of Labour councils will aspire to become co-operative councils, although it remains to be seen what this means in practice outside of the London Borough of Lambeth.
But the commissioning council model is probably not the end-state of reform. Instead, it seems likely that for many councils it will be an important milestone on a longer journey. Beyond 2015 most councils will have established a new mode of operating and be seeking new directions for development. Some councils will find that their role has not fundamentally changed a great deal – areas like Barnsley and Blackpool will still have a pressing need to try to improve the quality of life for parts of the country that have been left behind economically.
Others will be testing the traditional spatial, financial and service delivery boundaries of local government. The new frontier for innovation will be less about redesigning individual services and more about questioning the fundamentals of what a local authority is. As many local government services – particularly in areas like adult social care – become personalised and managed through regulated markets, councils will also start seeking new roles to secure well-being for their areas. We expect to see new models of federated, residual, lifestyle and commercial councils emerging.
Considering this, we present three distinct scenarios for the kind of world local government may find itself in.
1. California: this is a world in which coalition policy more or less works – the public has become more assertive and active and local government has faded into the background of people’s lives. Weakened councils may find themselves struggling to balance the books, fund infrastructure and protect the vulnerable in a world where everything is subject to a referendum.
2. United Provinces: councils respond to lacklustre growth and a lack of significant devolution from Whitehall by banding together to promote growth and efficiency. Areas like the Tees Valley, Greater Manchester and Bristol move to federal governance arrangements, perhaps including metro-mayors.
3. Recessions: a failure to return to growth means that local and central government are left struggling to find ways to secure economic and social progress.
What unites these scenarios is a sense of mild pessimism about the future for local government, rooted in concerns about whether the UK can find a sustainable new economic model, and whether that model will do anything to address inequality. That said, councils are not just victims of socioeconomic trends, and we do envisage positive responses that local actors can make in tough times.
Simon Parker is the director of the New Local Government Network and author of Future Councils: Life after the spending cuts published today