Why we don’t need another reorganisation

Malcolm Prowle says the Welsh Government should not interfere in local service delivery

Malcolm Prowle, who lives in Wales, is professor of business performance at Nottingham Business School and a visiting professor at the Open University Business School.

A feature of central government in the UK (which includes the Welsh Government) is an obsession with strong central control of local government activities. There is no constitutional protection for local government. As a result, it sometimes seems that central government treats local government like a feudal master would treat his slaves forgetting that local councillors are themselves elected. This should come as no surprise to those who can remember the programme Yes Minister where the Permanent Secretary repeatedly urges, “centralise more Minister”.

In Wales this has gone even further with the Welsh Government removing the democratic mandate from elected members in some local authorities by the appointment of Commissioners to run services which it deems to have failed. Of the 22 Welsh local authorities, two (Anglesey and Blaenau Gwent) now have some Commissioner involvement and a third (Pembrokeshire) is subject to a special investigation which may lead to Commissioner involvement. This situation compares with just one English local authority among England’s 152 principal local authorities being run by commissioners. Recently, Professor Tony Travers of the London School of Economics commented (BBC Wales website, 2 Sept) that this situation does suggest a degree of centralisation by a Cardiff based Assembly, which is paradoxical given that devolution was supposed to shift power away from London to Wales.

This abuse of power would not be so bad if it wasn’t also hypocritical. The Welsh Government itself is far from successful in developing and implementing public policies. Poor service standards at the local level can’t just be laid at the feet of local authorities. Welsh Government Ministers arrogantly devise policies, issue orders, create targets, reverse local priorities, interfere, inspect, criticise, insult and punish local government – ignoring the fact that councillors have a local mandate.

The creation of current 22 unitary authorities in Wales in the last reorganisation in 1996 was seen as an error at the time and has left a legacy of concerns around the size of local government units, and a lack of co-terminosity with other public bodies. Moreover, the absorption of the former Welsh Development Agency into the Welsh Government in the mid-2000s produced a lack of clarity about the critically important issue of economic development in Wales.

Fast forward to 2011 and we hit the consequences for Wales of the UK fiscal and public debt crisis. In the light of this, not surprisingly, there has been much debate about where Wales should go with regard to local government. A limited number of options seem to present themselves.

Some are of the opinion that the Welsh Government is pursuing a strategy that will ultimately lead to the abolition of local government in Wales central management of all services from Cardiff. A variation on this theme might be to retain local authorities with a service profile similar to English district councils but transfer the delivery of major strategic services, such as education and social care, to the Welsh Government.

I am not convinced that the Welsh Government has such a strategy for two main reasons. Firstly, the skill base of civil servants lies in policy formulation and they just do not have the ability or experience for the operational management of local government services. Secondly, under such a model, the Welsh Government would be completely accountable for the performance of these services without having local authorities to blame for any failures.

There is considerable support in Wales for mergers of many local authorities to create a smaller number of bigger units that might overcome the alleged problems of small size. The end result could be a reduction of Welsh local authorities to around a dozen.

Although this is an idea dear to the hearts of many politicians, there are some serious problems to be considered. Because of the way such mergers are invariably conducted in the public sector the process tends to be rather long winded, disruptive and immensely expensive. I was involved in the re-organisations of local government in Wales in 1974 and 1996 and can testify to the level of disruption and time commitment that is involved.

If there was now to be a major programme of mergers it is likely that senior local government managers in Wales would ‘take their eye off the ball’ for a couple of years while they jockeyed for position in whatever new structure emerged. All this would be at a time when they need to be focusing on improving services and containing costs. If anybody tells you this won’t happen (especially politicians with limited management experience) don’t believe them. Experience shows it is always the case.

Furthermore, evidence from many parts of the public sector shows that often the merger options developed are, usually for political reasons, completely the wrong ones. No-one should be surprised that they do not produce the benefits intended.

Finally, the killer argument is that what research is available suggests that in practice there is little evidence to link size of local authority with performance. While this may be strange and unexpected, what I have observed is that when larger units are created, a lack of market discipline leads them to introduce much more elaborate and complex management structures. The resultant costs then outweigh any savings that might otherwise be made.

The third option is basically to stick with the existing structure of local government in Wales but to develop networks of consortia or collaborative arrangements involving several local authorities, for the delivery of certain specific services. This would aim to overcome the alleged problems of small size.

This currently seems to be the preferred way ahead in Wales, with various consortia springing to life covering a wide range of services. However, while consortia arrangements might be workable for back-office services like legal or financial services, with front line services great care is needed.

Like so many of these initiatives, there is a lack of thinking around the creation of such consortia. There are several points of concern. For example, what benefits should the consortia generate and how are these to be realised? Wishful thinking won’t do it.

Another issue is what will be the accountability and governance arrangements for such consortia involving several local authorities. All we want is a Baby P case in Wales for serious questions to be asked about accountability and governance arrangements of social care consortia.

Finally, there are situations where a local authority might be involved with several consortia each with a different range of local authority partners. In these circumstances it seems difficult to see how improvements in citizen focus and joined-up services would be achieved.

While there may be merit in such consortia, it is probably better if they grow organically, building on existing relationships rather than being forced from on high. The danger is that local authorities will be forced down a particular route and left with unworkable arrangements for which they will then be blamed.

As a former management consultant, I was always taught that organisational structures should follow the establishment of management processes and cultures, and not lead them. Thus, rather than tinker with structures  in Welsh local government and face having to deal with the consequences, we would be better off focusing on how to make the existing arrangements work better and achieve gains in performance.

However, this is not easy to do and requires significant changes in organisational cultures and management effectiveness in Welsh local authorities. It will not be achieved by Ministerial directives and targets, bureaucratic performance management frameworks, comparisons with England or Commissioners issuing short term action plans. Instead the focus should be on developing organisations where employees are encouraged to look for continuous performance improvement. To achieve this, three things are necessary:

  • Clear vision
  • Strong leadership
  • Effective performance management

For these to be in place there are two further requirements. We need a sufficient number of senior managers and elected members in Wales who have a clear and achievable vision for local public services. And the Welsh Government should get out of the way. It is part of the problem not part of the solution.

While you’re here, we’ve got something to ask you: will you join us?

We’re working every day to bring the right people together and generate the ideas to make Wales a world-leading force.

We’re independent of government and political parties. We provide a much-needed space for open, transparent debate about the ideas that can make Wales better.

To continue to do this, we need people like you to join us.

Join us today and you’ll be supporting vital work that’s making our country better than ever.

Find out more