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The private sector is being hailed as the white knight for struggling councils. But, reports Demetrios Matheou, billions spent on outside management would be better spent on in-house staff and upgrading facilities
Knights in shining armour?
Talk about rubbing salt into the wound. Having publicly humiliated several
local authorities by suggesting that they were the most badly run in the
country, the government is now suggesting that private sector managers
be the ones to sort them out.
This is, of course, just another riff on the philosophy that has bred
PFI, a belief in the private sector as white knight to any organisation
in the public realm.
And with similar moves in the health service and in education, we could
be looking at a trend every bit as insidious as PFI.
The object of the government’s attentions is the 13 councils identified
as the most badly run in the country, in last year’s “comprehensive
performance assessment”.
In allegedly the most thorough assessment so far of council “performance”,
the Audit Commission looked at all 150 unitary authorities and county
councils, classifying them on a scale of excellent to poor. It is the
13 “poor” authorities stuck at the bottom of this local government
league table that are now coming under scrutiny.
Whitehall is testing the waters with private sector firms, with a view
to their overhauling the top managements of those authorities who don’t
cut the mustard.
Officials at the Office of the Deputy Prime Minister have been in talks
with companies that include management consultants PricewaterhouseCoopers
and are thought to also involve KPMG.
Stephen Clare, PWC's business unit leader for public services, told the
Guardian that "the government doesn't believe that the ways in which
local authorities can be improved reside in the public sector alone".
Ministers were looking for a "mixed economy solution" to improving
the poor local government performance, Clare said. He could envisage his
consultants helping to re-organise the management structure of councils,
bringing in stronger project management and looking at whether councils
needed to enter into public-private partnerships to improve their services.
He said that in some cases his private teams would want to work with
experienced local government professionals.
Such talk will anger the Local Government Association, which believes
that councils should be allowed to solve their own problems, using organisations
such as its semi-autonomous Improvement and Development Agency (IDeA)
And Owen Davies, UNISON’s senior national officer for local government,
derides the posited introduction of private sector trouble-shooters into
town halls as “another kick in the teeth for local government professionals.
“Management in the public sector has its difficulties,” he
adds, “but UNISON believes that they can be tackled without bringing
in expensive outsiders. The IDeA does everything that PricewaterhouseCoopers
can offer”.
UNISON has been vociferously opposed to the “name and shame”
review, not least because the money – estimated at £1billion
- and management skills expended on it could have been better directed
towards staff recruitment and pay increases, as well as training, upgrading
buildings and equipment.
Indeed, such a sum could have been an enormous boon to improving performance
- without the ignominies afforded by propping up a league table.
“Without adequate resources and a well-paid and well-trained workforce,
no council can be expected to do a good job,” says Davies.
It is believed that, while courting firms such as PricewaterhouseCoopers,
the government has also appointed a lead official to assess whether each
of the poorly performing councils has a realistic chance of improving
its services without outside help.
But the chances that this will bear fruit are slim, considering that
an incursion of private sector managers into the public sector is already
underway. In education, private sector firms have taken over the running
of local education authorities, for example Islington and Hackney.
While in the health service, there is currently a shortlist of approved management groups – from the public and voluntary sectors, as well as private – being lined up to do the same for hospitals with low league table scores.
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