Welsh local authorities need to be more entrepreneurial argues Cllr Dimitri Batrouni
The future of local government is a much-debated issue in Wales and, indeed, across the UK. This is unsurprising given Welsh councils have confronted cuts averaging 22% since 2010, according to the recent WLGA document ‘Making the case for local government’. In England, the figure is 35%. With that level of austerity since 2010, local councils have been forced to increase council tax and cut services. Yet, in some instances, difficult financial circumstances have compelled councils to innovate. The most successful councils have used innovation as a means of surviving austerity.
The councils that are struggling or failing local taxpayers have cut services and raised taxes without innovating. They have top-sliced services in order to hit financial reduction targets. In contrast, innovative councils have adopted a culture of change and adaptation. This requires not only political leadership but, critically, officer by-in.
Recent outcry from Welsh local authorities to the first budget 2019/20 set out by the Welsh Government (before the subsequent top up) was vocal, vociferous and, at times, venomous – especially after Alan Davies’ awful Oliver Twist comment. Local authority leaders, and opposition leaders, of all parties united at the austerity being inflicted on local services. The debate also became voguish and anodyne, after all who would argue for less money for frontline services?
Yet, there is a lingering question in my mind when hearing and engaging in these debates: what were the innovative things councils were doing before the implementation of austerity, when money was not tight? What reform was being driven through not because of austerity, but because the world and the demand on public services was evolving?
The answer: not much. This is not to say nothing good was happening but despite the times demanding it, there was an absence of urgency. Austerity prompted and promoted the debate, but the debate has become a zero-sum game about demanding more money from other services. This presupposes councils are some benign force, unable to instigate radical change in austere times. It also leads to the stale position that simply receiving more money from the central budget will solve everything.
The future for councils cannot continue in this way. The debate has to change. The old model, even with more money, no longer delivers on resident expectations. Councils have to develop an entrepreneurial mind set, both at the political and officer level. Entrepreneurialism should not be confined to the private sector. Councils have to be nimble, and adept, in taking advantage of the economic and social opportunities that arise in their localities. This could include:
- Investment in local businesses
- Creating an investment portfolio of capital assets
- Supporting local groups to take control of local services when they come forward
- Collaborating far more with other local councils to eradicate duplication in back office functions
- Creating a local Council ISA
- Creating their own housing companies if they do not have any housing stock
- Invest in council services that have the ability to generate a revenue, not hand them over to quangos or private sector companies
- Open up local authority space for the growing numbers of local self-employed people to utilise, based on the WeWork model.
The entire ethos must be to change the culture that exists within councils. There is a tendency to blame external agencies for the lack of innovation or service reduction which must not be allowed to mask complacency. Most councils are instinctively risk averse – they have a natural tendency to play it safe. Worse still, some councils still have the attitude of exceptionalism – we are the best because we are from here.
The purpose of an entrepreneurial council is to overcome this culture and to use the capital power of local authorities to generate revenue streams that cover the cost of any borrowing; generating additional revenue to offset central government cuts and creating a council ISA (a fund to future proof it from future financial unpredictability).
There is the Cardiff and Capital Region city deal, but this was prompted by UK central government, not by councils themselves. In Monmouthshire, we are moving towards becoming an entrepreneurial council. Through opposition motions, and eventual administration agreement, we have set up an investment committee – a cross party group – to create a local portfolio and scrutinise proposals. We are also investigating plans to start a local housing company to deliver the housing stock our area desperately needs.
Make no mistake, these are not easy tasks or risk free decisions. Yet, the alternatives, as I see them, are deeply problematic. We either continue the endless debate with central government over funding (it will never be enough) or assume the benign position of cutting and increasing taxation and oversee services, despite the fantastic effort of staff, that are simply not fit-for-purpose. The future of councils has to be entrepreneurial in mind set and action, not just words.
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