This follow-up piece outlines some of the policy options available to the newly elected local authorities on 5th May, and examines a number of more radical and difficult policy options.

As already noted in part 1, austerity started in 2010/11 and, in many ways, after years of funding growth, it is amazing that public authorities in England and Wales have coped with the challenges of austerity without the “roof caving in” on public services. This has been achieved by a combination of things, such as reducing overheads, raising of service entitlements, efficiency improvements etc.

The problem is that the savings made were relatively easy to make and were often referred to as the “low hanging fruit”. Clearly, one can only pick low hanging fruit once, and so these sorts of savings are not going to be accessible to the same extent in future years. Thus, other approaches are needed and some of these are examined below.



Enhanced collaboration

There is a broad consensus that the current structure of 22 local authorities in Wales is not fit for purpose. For several years, Welsh Government policy was aimed at persuading or forcing local authorities to merge in order to create a smaller number of authorities, possibly as low as 8-9. Many of us argued strongly against such an approach as being too disruptive and, eventually, the policy was changed.

The new policy now seems to be one of local authorities in Wales not being forced to merge, but undergoing an “enhanced level of mandatory and systematic” collaborative working. Whether this policy is a success remains to be seen, but the difficulties associated with it and the potentially confusing accountabilities suggest it is not likely to offer an immediate solution to the financial strain encountered by local authorities.



Service outsourcing

Local authorities throughout the UK have outsourced many services to external partners (private or third sector) for many years. Often these involved back office services, but front line services can also be outsourced.

Outsourcing to the private sector is a lot less popular in Wales than in England, largely due to ideology. Hence, it seems likely that this approach will prove more popular among Conservative local authorities than those led by Labour/Plaid. However, the ideology needs to be removed. The issue here is whether outsourcing can help local authorities maintain services at a lower cost and there is no general answer to this. Each proposal needs to be thoroughly analysed and considered, based on its merits.

As already noted, outsourcing to the third sector can and does take place in Wales and expansion of this might also be considered. However, a recent report from the Auditor General for Wales noted that Welsh local authorities are not always making the best use of the third sector and must do more to ensure that the work they are currently doing continues to secure value for money.



Co-operative solutions

The Co-operative movement is a source of innovative solutions for local government, which are desperately needed in these difficult times. Traditionally, co-operative models have been associated with the Labour movement, but there seems to be no reason why they should not also be of interest to other political parties. Co-operatives, quite simply, are services or businesses that are controlled and owned by those who use them. For example, housing co-operatives, which have been adopted and supported by the Welsh Government, are controlled by tenants and employees, using a highly democratic and transparent model.

The co-operative model can be easily applied to all kinds of sectors and services. Adult social care, one of the ‘crisis sectors’ of 21st century social policy, can be perfectly adapted to fit a co-operative model, simply by putting carers at the heart of care. Social care co-operatives are owned and controlled not only by carers themselves, but also by those who use the service. By allowing those most invested in a service to also own and run it, we allow social care to be shaped and directed by those with a real passion and understanding for the work.

Similarly, co-operative models in the education sector allow teachers, parents and students to fully engage with the running and governing of a school. Co-operative schools in England deliver high levels of attainment and strong values-based governance models. Perhaps the introduction of co-operative education could raise the standard of Welsh education, so that we may compete with the rest of the world.



Intermediate care of the elderly

The problem of local authorities having insufficient capacity to deal with the provision of social care to elderly patients has already been noted. In Gwent, the Gwent Frailty Project appears to have had considerable success in allowing elderly patients to retain their independence and avoid residential care, through the development of an early warning system and the availability of intermediate care pathways. This approach requires effective cooperation and collaboration between local government, hospitals and primary care practitioners and some up-front investment is also needed. Such an approach needs to be considered in other parts of Wales as a potential solution to the challenges of an ageing population.



Schools reform

In part 1, we made reference to the funding situation in Welsh schools and the significant shortfall in funding between Welsh schools and English schools. There seems no obvious solution here given the scale of the shortfall and hence we must look elsewhere for solutions. Various initiatives designed to improve school performance have been tried by the Welsh Government, over a long period of years, with only limited degrees of success.

The problem for local authorities is that in trying to improve school performance they are very much hemmed in by the Welsh Government, Examination Boards, regulatory bodies etc to be able to have much discretion to do anything significant. They are addressing the issue of surplus places, but now need to look elsewhere for other ideas.

The following are policy initiatives to be considered, but they will require a consensus between schools, local authorities and Welsh Government if they are to work.

One approach favours decentralisation to schools involving less control and more governor empowerment. The aim here is to get schools to make better use of the money they already have since they are unlikely to receive any more and there may be less. Linked to this would be to give proper powers to schools on staffing and performance management.

The second approach concerns curriculum. The new curriculum is irrelevant to progress, but ministers love such big change. Get rid of it and let schools teach – it consumes too much time. Also, there is no correlation between curriculum reform and raising standards

A controversial approach is to devolve teacher pay and conditions and make a virtue of the opportunity. Provide for teacher sabbaticals and in-term leave. It is imperative to revise teacher contracts in such a way as to improve morale!

Finally, and linked to the above, there is a burning need to improve school leadership at all tiers of governance not just head teachers.



Service transformation

Service transformation or reconfiguration is a rather vague term which implies making changes to a public service in terms of what, when, where, how and by whom it is delivered. Often such transformation involves the use of modern technology. While the term really implies making significant changes to a service, it is often used to describe rather limited changes. However, caution is needed. Such developments inevitably require up-front investment to make them work and there are high risks of failure. Often there are difficulties in implementing the changes needed due to poor planning. It is important to set realistic goals and be honest about what really matters rather than go for grandiose schemes which get lots of publicity.

There have been a variety of service transformations that have taken place in Welsh local government concerning matters like transport, revenues and benefits and procurement. However, the reality is that there is a need for service transformation to move into the front-line service arena and to be applied across Wales.



Improved financial management

In 2014, the Wales Audit Office in a report on local government financial management commented that “Overall, we conclude that many councils in Wales do not have clear and realistic plans to deliver efficiency savings and do not routinely base their strategic plans on sound financial information”. In 2015, another report stated that “Councils in Wales are under significant financial stress and have been active in meeting the challenge. However, the next few years will see increasing financial pressures and councils will need to improve strategic financial planning in order to effect transformation and protect their financial resilience”. Clearly this is an area which needs improvement.



In summing up; these authorities face formidable challenges with no easy solutions. Unfortunately, none of these options are easy to introduce and all will require local authorities to identify sources of investment funding to make the necessary changes. Also, while some of these approaches may be seen to have some strong ideological constraints, this does not necessarily need to be the case. Competence is more important than ideological purity.