Change and uncertainty feel like the new normal for the local government sector in recent years. Short-term pressures like shrinking budgets, newly devolved powers, and services in crisis can dominate the to-do list of council chief executives. However, a vital element of good risk management is horizon-scanning, both to mitigate potential risks but also to ensure that opportunities aren’t missed.
To help guide local authorities through the challenges ahead and prepare them to seize the opportunities this era of uncertainty can offer, Zurich Municipal worked with the Social Market Foundation (SMF) to produce Local Public Services 2040. Launched in July, the report identified the challenges that local governments will face over the next two decades. It identifies risks for local authorities such as an ageing population, changing lifestyles, national economic performance, and climate change, as well as the challenge of new technologies such as robotics and automation. However, the report also envisages a range of scenarios in which the local authorities of tomorrow can seize the opportunities these radical changes pose. Today we’ll look at two of the scenarios outlined in the report; ‘Industrial Councils’ and ‘Ofcouncils’.
The Industrial Councils model is the natural evolution of large authorities with enhanced economic development functions. These Industrial Councils of 2040 will address market failures in infrastructure and help their communities to adapt to technological change. This model is made possible by the flow of power from Whitehall to town halls and city halls across the country – given the success of metro-mayor elections earlier this year it is hard to imagine this move being reversed. Such models offer a more interventionalist approach, with the report sounding the cautionary note that the gains of devolution will have to be balanced against the additional responsibilities and risks incurred.
The report envisages some local authorities pursuing an Ofcouncils approach with local government acquiring new and expanded regulatory responsibilities. ‘Ofcouncils’ will respond to ever-shrinking budgets by withdrawing from public service delivery in favour of regulatory intervention in markets. One obvious area for this kind of Ofcouncil would be the housing market, where there is growing recognition that intervention is required to resolve the UK’s housing capacity crunch. A reinvigorated regulatory role for Ofcouncils would not be limited to traditional markets but could emerge as the preferred approach to the impact, tax, and legal implications of new technologies such as autonomous vehicles and the sharing economies. Uber’s experience at the hands of the GLA is a prime example of local authorities embracing a regulatory role that had appeared forgotten.
Scanning the horizon for innovative approaches such as these is vital for any local authority hoping to minimise and mitigate the challenges brought by the coming decades. Crucially, this kind of horizon scanning can help local authorities identify the opportunities ahead rather than focus on short term challenges. The era of change and uncertainty currently dominating local government is unlikely to end soon, even over the next 20 years. But the radical changes ahead will offer opportunities as well as risks for councils willing to set aside valuable time now to prepare for the challenges of tomorrow.
