Two challenges for councils

By Professor Mark Thompson | 30 September 2020

On 2 July, housing secretary Robert Jenrick announced that a recovery and devolution White Paper will be published later this year. The paper and its outcomes will be ‘jointly commissioned between central government and local government’, and local authorities ‘[will] be at the heart of our ideas’. The White Paper thus presents one of those periodic opportunities to bring some ambition to rethinking the relationship between central and local government – an ambition that I believe is sorely needed if local services are to ‘recover’ in the face of already existing funding cuts.

With the need for ambitious thinking in mind, the publication recently of PWC’s report Evaluating the importance of scale in proposals for local government reorganisation – a document that is sure to form an input for those drafting the White Paper – prompted me to appeal for the inclusion of two important additional perspectives over and above the scale that forms the subject of PWC’s report.

The PWC document proposes a widespread merging of county and district councils into single unitary authorities, and offers projections of the potential savings that may accrue from this. While there is much to recommend any approach that focuses on reducing the undoubted duplication and waste in the current system, and ‘while this report does not consider potential transformation benefits in any detail’, I am nonetheless worried that the ‘scenarios’ evaluated by the report – those of single, two, or three unitary authorities – do not represent the full spectrum of potential re-organisations available to our housing, community, and local government services. Specifically, all three of PWC’s ‘scenarios’ are essentially just different versions of the same thing: traditional-sounding organisational mergers that show little sign of the increasingly data and cloud-driven thinking that characterises more transformational approaches. So alongside simple mergers, as it drafts its White Paper I’d like the Ministry of Housing, Communities and Local Government (MHCLG) to consider an alternative ‘scenario’ that places data, and the cloud, at the centre of a more modern-sounding way of organising.

Taking data first. It’s nice when iPlayer knows what I’ve been watching recently, or when Netflix uses my viewing preferences to suggest something I’d like to watch. Or when the AA recommends my best route based on date and time of day, weather, and live traffic.

As a business school professor, my students’ reports – and recommendations – have no more credibility, unless substantiated by the research, than a claimed vaccine for COVID has without extensive clinical trials. These are examples of making decisions – or others deciding for us – on the basis of sound data, preferably lots of it. It’s increasingly a basic courtesy we take for granted, to the point where we experience impatience or distrust when dealing with people or services that don’t yet respect this.

I have two existential challenges that I believe the emerging data economy presents to local government in its current form – challenges that traditional mergers per se will fail to address. The first is that, generally, credibility and legitimacy in decision-making increasingly accrues to the well-informed. Relatedly, democratisation of data means that the professor, the pharma company, or the policy department can look increasingly irrelevant – to the point of being discarded altogether– by citizens using good data to take better decisions that produce better local outcomes on matters ranging from health and social care to land use, transport and other public services. So the MHCLG and councils need to be good at data – but also need to be prepared to make some data available to citizens in a new way.

Indeed, increasingly, ‘good’ leadership appears to be about the latter: putting in place the data, and enabling infrastructure (technical, ethical, governance) to enable citizens to take more informed decisions resulting in better outcomes that can ever, arguably, be achieved by a single unitary. This entails a shift from making lots of decisions for other people to enabling and empowering people to take decisions locally for themselves, yet systemically, and as part of an organic and collective whole – a lesson that may have just been learned afresh in the Government’s recent shift from central to local track and trace.

To survive – that is, in departmental terms, to remain credible, and therefore legitimate, I believe data should become the lifeblood of any future local government model: leadership on data, organisation and protection of data, democratisation of data, continuous monitoring of data, and ultimately citizen empowerment, and better outcomes, based on data. That’s challenge one.

My second challenge is that when traditional organisations start to become more imaginative and informed about data, they generally start to take the cloud very seriously – indeed, to restructure themselves around the cloud. Emerging, cloud-based ways of organising reveal our traditional model for organising and funding housing, communities, and local government to be a hopeless, doomed and complete mess. In an era of unpredecented and continuing cuts to frontline services – the only part that really matters to citizens – we have 430 councils, each surrounded by a host of other local providers in health, social care, blue light, housing, and third sector. These are tens of thousands of legacy bureaucracies that reinvent the wheel again and again to little or no public benefit (incidentally, the same applies to our 650 NHS Trusts or 43 police forces).

As a citizen, do I really care whether we have a special, bespoke, ‘local’, case management system, or HR database in my council – any more than, when purchasing a car, I ask lots of questions about which brand made the wire that connects the engine in my car with the speedometer? Providing it can do the job, who cares? If rival carmakers increasingly share this below-the-line stuff, enabling them to move more quickly, cheaply, and configure better around the customer, why not councils?

Ahhh, ‘Localism!’, I hear you cry. ‘We’re special!’. But not so fast. Contrast the 20th century, bureaucratic bloat of the entire panoply of UK housing, communities and local government service delivery organisations with Heart FM: a federal organisation comprising a corporate HQ and 33 stations, each covering local news, local weather, local traffic, with local advertisers – local, local, local. Yet the ‘back end’ – the stuff that no Heart FM listeners care remotely about, digital media platform, finance, etc – isn’t duplicated 33 times but consumed from the centre because it adds no value to Heart’s local customers – indeed, it offers a national-quality streaming service at local level, with all the cross-fertilisation of regional data this enables. The ‘policy-makers’ at Heart HQ provide the infrastructure, the data, and the leadership to enable local service providers to frame local services regionally – while benefitting from national-level investment in enabling data, infrastructure, and back-end services.

Like almost all modern, data-enabled and digitally-literate organisations, Heart appears inside-out: the centre has a huge leadership role in empowering collectively intelligent, yet individually configured, service offerings. My prediction for UK housing, communities and local government service delivery organisations is that ongoing technological enablement of society at large, combined with continued frontline cuts, will mean a way of organising local services that superficially resembles Heart FM within 20 years – with or without the department’s leadership. This is because – as we saw in some of the astounding local digital initiatives during lockdown – the train’s already left.

Bringing my two provocations together, smart policy-makers in the era of data understand how central, strategic investment in the placeless – data, and enabling internet technology, usually located in the cloud – can now enable a sharper, more diverse, and more sustainable definition of place, not by central planners, but by the people who actually live there. Recalling Heart FM, if we were to gradually shift to a model where ‘the centre’ specified standard cloud-based services at the ‘back end’ to be consumed right across local government, might this not enable the preservation of county and district councils, with all their localism benefits, at the front end?

Such a scenario is very different from the choices presented in the PWC report, where the centre (MHCLG?) becomes a data-driven, ‘inside-out’ enabling platform for the collectively intelligent, yet furiously local. In contrast to a spate of mergers, this sets us down the path of central data and technology standards, common service patterns, and central governance of a vibrant, place-based ecosystem of data-driven policy, and resulting, intelligence-driven, hence citizen-centred, service delivery. I know which outcome I’d choose.

Mark Thompson is Professor of Digital Economy at University of Exeter Business School and Strategy Director, Methods Group.

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