Thursday 01 December 2011
Many local authorities are considering the alternative models of service delivery that exist as part of their on-going plans to deal with the financial austerity they face over coming years. Issues that should be close to the top of any list when weighing up the pros and cons of each option are governance and accountability.
One fundamental lesson learned by many local authorities over the last decade or two is that the more contractualised a service delivery mechanism is, the less governance control and local democratic accountability you will have over it. This does not necessarily absolve you of blame either should things go wrong. I only need to think back to last winter when local authorities were getting a roasting from the media and public alike for not responding quickly enough in gritting roads – despite the fact in some instances responsibility for the roads had been outsourced for over a decade.
Of course many authorities have been shying away from wholesale outsourcing as a result of the immediacy of cuts and the length of time large-scale procurement exercises take to deliver. Some, however, have looked towards wholly owned arms length companies to give themselves the reassurance that if things go wrong they can still bring the service back in-house. Despite this, representatives of the council who sit on the boards of these organisations are legally bound to act in the interests of the organisation rather than the council. It is therefore of vital importance to get the heads of terms correct when setting up any such company.
With the Localism Act recently passing into law the ‘right to challenge’ may lead to further fragmentation of services through a variety of different approaches including social enterprise, mutuals and co-operatives. In the current financial climate is it really the right time to be handing public funds over to small groups of individuals without any recourse or on-going scrutiny? APSE's recent research surveyed more than 1,600 sources and found a lack of evidence as to the benefits of this model for local service delivery.
Looking to the future, it is likely that local government will have a whole variety of arrangements when it comes to service delivery. Will elected members have a significant level of influence and control in this brave new world or will they be reduced to the role of the favourite old uncle at family gatherings who regales everyone with tales of the good old days whilst no one really pays much attention to them.