With recent announcements on feed in tariffs for solar photovoltaics creating such controversy, many could have been forgiven for believing the opportunity for local government to deliver local growth through its response to climate change had gone. From what I have seen in councils around the country, this is far from the case. However, the reduction in tarrifs does create an opportunity to reappraise what strategy authorities should pursue in a rapidly changing environment.

It could be said that there has been an over emphasis on renewables to the detriment of energy efficiency measures of late. Indeed, it has been a bit like investing in larger size clothing to tackle an expanding waistline rather than focusing on the fundamental problem of over consumption.

In the current financial climate nobody needs to apologise for building their previous strategy around pursuing feed in tariffs, renewable obligations certificates or the renewable heat incentive to fund an overall approach to tackling climate change. However, I predict a rebalancing of strategy brought about by a shifting Government emphasis towards energy efficiency measures signalled by Green Deal. Significant opportunities exist for local authorities in this area and, as with the feed in tarrifs, councils that move first will get the most benefit, while those that dawdle may fall victim to funds running out further down the line.

One authority that has been at the forefront of strategy development on environmental sustainability over the past decade is Nottingham City Council and there will be very few in local government who are not familiar with the Nottingham Declaration. An ambitious plan has been developed aimed at providing 20% of the city’s energy through renewable and low carbon sources by 2020; the rate is 11.5% already. 

I was therefore interested to hear the authority’s plans for Green Deal. It is looking to become a Green Deal provider and targeting an £80m investment with potential benefit for 12,900 properties across the city. This should generate £13m of annual savings with a payback period of 20 years.

Combine this with recent investment in solar and the 8,000 jobs that are predicted from the imminent expansion of the city’s tram system and you can see very quickly how an economic growth strategy built around energy efficiency and the development of renewable energy schemes adds up.

APSE's view is that at a time when local government is once again being looked at as a vehicle for creating local economic growth it would be surprising if the opportunities that the green economy creates were not near the top of the list for politicians and strategists alike.

If local government thought 2011 was tough, 2012 may be about to get a whole lot tougher. With an estimated 145,000 job losses in councils over the previous 12 months, some may have thought the heavy lifting had been done. However, my fear is that whilst many have made significant progress in efficiency programmes, this may prove difficult to sustain – and the knock-on effect for councils that didn’t quite get there in year one could be catastrophic. With ongoing redundancies, wage freezes, rising pension payments and inflation remaining relatively high, morale will be near the floor.

Local government will be asked to question its very role as a place shaper as it struggles to cope with social problems created by unemployment, crime and disenfranchisement. Paradoxically, in the midst of this it will continue to be asked to retrench in terms of service delivery, whilst localising and fragmenting provision. Towards the end of the year Ministers will begin more ‘guided localism’.

Further changes in political control will take place at May local elections as the four yearly cycle comes around again and Labour moves away from its historic low of 2008. This could play out differently in Scotland as the SNP’s popularity continues.

The future will remain bleak as on-going economic problems in Europe feeds through as further pressure on public finances from national government level.

APSE’s first strategic forum of the New Year took place last night on the theme of energy efficiency in asset management. Guest speaker was David Kilduff, Head of the Commercial Group at Walker Morris Solicitors, who gave an overview of the issues facing local government in this area.

These events are used as an opportunity to develop policy and share knowledge.

David spoke about the opportunity to examine the corporate assets of the council to identify environmental and actual financial savings through better utilisation of property, procurement and behavioural change. Energy price inflation and energy security are also significant headaches for local authorities.

Prior to Christmas Local Government Minister Eric Pickles touched on the potential savings from better management of local government’s £250B property portfolio, suggesting that £7B savings could be achieved from reduced property use and £8B from enhanced productivity through better space utilisation.

David identified that you need political leadership with a vision for the area, you need sound advice in developing your strategy, a business plan of what you aim to achieve and the implementation skills to deliver. You also need to audit what natural resources and assets you have in your locality. In a time of austerity it’s an opportunity to make an economic case for growth not just an environmental case for change.

A wide ranging discussion took place around using pensions funds to invest in the green agenda, whether recent announcements on feed in tariffs represented a shift in government policy from renewables to energy efficiency, whether it was practical to take a cross public sector approach in this area, lack of public awareness of green deal and how you go about rebalancing property portfolios when your estate is heavily occupied at present.

The meeting closed with agreement that as legislation bites and belts tighten this will become an area of ever increasing importance for local government.

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.

I recently met with colleagues from Bradford Council to discuss how they had been involved in Insourcing the City’s Education Services from Serco. 1,300 staff were transferred back to the authority in July this year from a £53m per annum contract.

Despite having written about hundreds of examples of insourcing services, in APSE's research in this area, the sheer scale of this project was so impressive and to deliver it from the Council taking an initial decision in December 2009 to being fully up and running back inhouse by 29 July 2011 was fairly incredible. Both project managers who delivered this only commenced work in late March 2010, with further secondments being added in early 2011, therefore you are really only talking about 16 months in total for a handful of people to deliver such a colossal change.

They told me about some of the key stages in the insourcing process, engaging with clients and stakeholders; negotiating with the existing contractor; communicating with staff affected who were still with the existing contractor; discussions and consultations with trade unions; putting in place IT infrastructure and back office arrangements around payroll etc; finally doing staff welcome meetings for the 1,300 staff and addressing any teething problems.

The key lesson for me is that no matter how logistically difficult something may appear if you have good quality staff in place nothing is impossible.

Although many Armageddon prophecies have been written about the coalition Government’s proposed cut to Feed in Tariffs for solar PV and its impact on the wider renewables agenda, I have to say that I don’t quite buy this vision of the future.

Whilst I am as disappointed as everyone else at the proposed reduction from 43p to 21p from early December, I recognise that the budget of £880m has been used up as commercial organisations cashed in on a financial windfall created by FiT’s, coupled with the dramatic falls in the price of solar panels. Government only ever intended that participants would make a return of 5% on a scheme funded by the general public; being honest many schemes were likely to yield a greater dividend than this.

Obviously, a number of local authorities and housing associations are partially through the delivery of schemes and it is unfortunate to say the least that the review has been brought forward from 31 March to now. APSE will be writing to Greg Barker calling for an exemption from the early reduction in tariff's for local authorities who have acted in good faith, based on Governments stated intention and entered into contractual arrangements aimed at delivering large volume schemes by 31 March. After all it is the public purse which will suffer if contracts need to be terminated.

On a wider renewables point I believe that there will be a pause for breath and then authorities will continue with their renewables programmes at pace. Solar will continue to have a place amongst wind, biomass and others; it will probably just not be as prominent as it was in the past. 

Now that we are over halfway through the financial year, more and more councils are revisiting plans they have made to generate efficiency savings to see if they will stack up and achieve their desired outcome for this year and beyond.

At APSE, we have noticed an upsurge in enquiries about how you make remaining services more commercially viable by either reducing costs or generating additional revenue to offset budget cuts. This suggests that councils are concerned they may fail to meet existing targets and are attempting a ‘take two’.

With outsourcing too lengthy a process to deal with the immediacy of the financial pressures, many are looking at internal resources to see how they can make what they have go further or how they can generate a return from existing services.

The Audit Commission study ‘Positively Charged’, back in 2008, identified that local authorities in England and Wales generated over £11b in charges per annum. I must stress that nobody is suggesting we should try to soak the public for further revenue in the current economy. However, senior officers are recognising that some of the services they currently provide and assets used could raise revenue from the wider public sector and beyond.

Some of the thinking behind this is driven by the Open Public Services approach and there are those who add two and two together and come up with putting services at arm’s length to ‘free’ them to compete in wider markets. But decision-makers should remember that much of the perceived opportunities of this approach can be achieved with existing in-house services. And you certainly don’t need to mould services into a new type of model to pursue alternative work streams.

Local government already has many existing powers that allow it to provide services for other organisations. When you add the powers to charge for cost recovery and to trade for profit contained within the 2003 Local Government Act, you have quite a range of options available.

Some may decide to go for it and trade for profit on a larger scale, although I suspect the vast majority will test their competitiveness by expanding their charged-for services and perhaps trading commercially on a small scale at the outset.

As budgets continue to fall and corporate directors scan the horizon for opportunities to balance the books, I suspect many more will turn to developing income generation strategies for their authorities.

A huge debate is taking place at present about which are the best models available to divest public services through. I have got to say I remain to be convinced. Whatever service options local authorities decide to pursue in future the benchmark against which to appraise the options is the existing in-house service. Does any alternative form of provision meet or surpass the benefits that managing services directly yourself brings.

These benefits are:

Firstly, high quality, value for money, service provision.

Secondly, the retention of public resources within the local economy and the avoidance of leakage from the local area. This point was covered extensively in our Economic Footprint research in Swindon that showed for every £1 spent by the council on services £1.64 circulated in the local economy.

Thirdly, the ability to act as a market regulator to ensure the Council achieves a fair price over the long term.

Fourthly, being an employment standard setter in promoting fair employment practice, skills training and apprenticeships. 

Fifthly, joining up wider public policy and council corporate objectives by integrating this into and across service delivery, an example of this being responding to climate change.  

Sixthly, the contribution made to financing and supporting the democratic and corporate core of the council.  

Seventhly, the flexibility to change priorities and reduce budgets without having to revert to a contract. 

Eighthly, being responsive in a crisis such as the recent riots, the vast majority of councils street cleansing teams had already returned the streets to normal by the time the public had arrived the following morning.  

Ninthly and finally, being democratically accountable to elected members and being focused on the community because the workforce from top to bottom are predominately from the community. 

In my view this list is non-exhaustive but is an important contribution to the debate on future service delivery models and is one that cannot be ignored. A number of elected members have remarked to me in the past that you often don’t realise the value of what you had, until it’s gone.

The housing crisis is back. For many in local government dealing with the consequences of homelessness, overcrowding and poor stock condition, it has never really gone away. The difference is that the problem is now reaching previously untouched sectors of society – and it's about to get worse.

Home ownership is predicted to drop to 63%, its lowest level since the mid 1980s, a whole generation are 'locked out' of the housing market, and there is chronic lack of supply of new homes, according to the Oxford Economics' report that recently hit national headlines.

The National Housing Federation is calling for greater Government investment in affordable housing and points out that this would stimulate economic recovery. I couldn't agree more.

With rents also predicted to rise by 20% over the next five years, investing in affordable housing is a glaringly obvious win-win solution. The market is unable to meet people’s needs at present and stimulus is required.

Investment in additional affordable homes would be welcome regardless of the provider. But we at APSE believe local authorities are geared up to deliver as house-builders alongside their strategic housing role.

Councils of all sizes, locations and political colours have risen to the challenge of building environmentally friendly homes to tight deadlines in ways that have benefited their local economies in the past two years, using short-lived HCA Local Authority New Build funding.

The HCA's latest affordable homes programme acknowledges the local authority development role and the forthcoming self-financing regime will allow councils more local control over housing resources – thus strengthening the potential for councils to build.

Association of Retained Council Housing earlier this year looked at the sums. Firm Foundations shows councils can borrow at Public Works Loans Board rates and recoup the money from rents.

It must also be remembered that homelessness and poor housing is costing £2.5bn a year for health services and £1.8 bn a year in policing. On the plus side, £1 investment in new housing can generate £3.51 of economic output.

There is a strong business case for Government investment in housing to give the ailing UK-plc a much-needed boost. Not to mention avoiding the misery of people living in inadequate housing or without homes at all.

I made the same point in this column a year or so ago, but it's a point we obviously need to keep repeating. Putting a decent roof over your head is no longer just a problem for the poorest people and the councils that support them. It is a problem for everyone – and addressing it pragmatically would surely be a vote-winner.

Many extravagant claims have been made about the potential benefits that co-operatives and mutuals could bring as service delivery vehicles for the provision of local public services. However, when the evidence is examined in detail do these claims stand the test of scrutiny? This is what the latest research publication by APSE ‘Proof of delivery’ sets out to explore. This research was undertaken through APSE’s knowledge transfer partnership with De Montfort University.

The first key finding was that there is very little evidence base to support any of the claims made about the superiority of co-operatives and mutuals over any other form of service delivery in public services. From 1600 sources our researchers were only able to find 12 case studies where any impact evaluation had been carried out. For a concept that is being pushed so hard as a response to the cuts agenda this is asking decision makers to take a huge leap of faith.

Secondly, from the limited evidence base that exists some key factors appear for successful operation within the public sector, these include:

• Contract lock in – an initial sufficiently long contract in terms of volume of work and financial commitment to allow bedding in of new arrangements and also ensuring the avoidance of future divestment of services that would change the character of the original body.
• Collaboration – the need for on-going support through public subsidy, advocacy and expert advice in order to support the fledgling organisation.
• Buy in – there needs to be buy in from all stakeholders, staff, elected members, citizens and service users.

APSE has argued for a number of years that without on-going support, collaboration and facilitation from the public sector the social economy will struggle to survive, this research reinforces this message.

A third point from the research to emerge is that there appears to be downward pressure on staff terms and conditions brought about by the formation of co-operatives and mutuals. At a time when statutory protection of terms and conditions are being removed from public sector workers by the government this is highly unlikely to generate great enthusiasm for a transfer to this model of provision amongst the key asset of any organisation, the staff.

A final and fundamental point is the fact that very little evidence exists of accountability to elected members and / or the wider community. In a time of diminishing budgets and intensified scrutiny of public spending are local politicians really going to handover public funds to bodies with a self interest without any influence or recourse should things start to go wrong.

APSE would like to see a proper evidence based debate on the role that co-operatives and mutuals can play in public service delivery and would support their use where they can demonstrably add real value. Anything less would do local communities a great disservice.