The big issue

By Karen Day

David Cameron’s Big Society could radically change the way services are delivered, and help councils empower communities. But the bad news for the chancellor is that it’s unlikely to save much money. Karen Day reports

In the remote Cumbrian village of Crosby Ravensworth live David Cameron’s ideal citizens. Annie, Joan and David balance their day-to-day lives with the demands of designing an affordable housing scheme, buying their local pub and devising a community energy plant. The villagers are taking part in the government’s Big Society pilots and they highlight the potential power of community activism. But the village also provides a stark lesson on how limited the prime minister’s Big Society could be without the support and the ­funding of local government.

Eden District Council provided the £30,000 loan to kick-start the village’s housing scheme. Its officers gave their expertise and support in negotiations to secure funding to buy local land, and district councillors sit on the board of the new community land trust. All this might sound like small beer in one of England’s most sparsely populated districts, but translated nationally it shows the crucial role councils play in building capacity, providing support and managing markets in Cameron’s Big Society era.

But with just a few weeks to go before the Spending Review, the question is whether local government will be left with enough funding to fulfil this role. And if not, can the government afford to put anything else in its place? These issues highlight the tensions at the heart of the government’s agenda and the risk that too many cuts could derail Number 10’s ­favourite public policy.

The prime minister has staked his ­government’s reputation on two things: getting us back into the black within four years and creating a nation of volunteers happy to run their own public services in a smaller, decentralised state. It’s a bold and brave strategy. But it’s unclear just how the two fit together. Pre-election it appeared that the Big Society was about brutal pragmatism, an answer to the ­financial crisis the country was facing.

‘Gordon spent it all,’ Cameron said in a speech. ‘It’s all gone. So we need something different, and that is where our big idea comes in.’ Now Cameron talks about ‘feeling the importance of the Big Society in his head and his heart’. He says it’s about the efficiency of public services, fairness and freedom. This presentational change is a clear reaction to the critics who claim that the Big Society is a smokescreen for Thatcherite-style cuts. Insiders say, however, that Cameron does believe passionately in the ­concept, as does his inner circle.

The change in rhetoric might also be an implicit acknowledgement that Big ­Society is not the vehicle to make immediate savings in public spending. It is rather a long-term programme that will need time and investment; hence the four Big Society pilots and Cabinet Office minister Francis Maude’s parallel trials of mutuals.

The main problem with the Big Society is the difficulty in defining it. As a brand it’s already recognisable, but few understand what it’s actually designed to achieve and what it includes. Greg Clark, minister for decentralisation and a Big Society zealot, says there are three strands to the policy: public sector reform, community empowerment and philanthropic action. ‘The first is about what the state can do for us, the second is about what we can do for ourselves and the third is about what we can do for others,’ he says. There is cross-party consensus on the need for localism. And in the current climate there is clearly a need for public sector reform, albeit in various guises. But philanthropic action remains a woolly ­concept that many treat with cynicism.

Stephen Bubb, chief executive of the Association of Chief Executives of Voluntary Organisations, says the government has little understanding of volunteering, how it’s developed and what prompts people to do it. He doubts that with the level of funding cuts expected, the government will be able to create its army of civic-minded volunteers.

‘Volunteers need to be managed, trained and developed. You can’t just take anyone on,’ he adds. ‘With less money this becomes more difficult and I don’t think there’s any understanding in government of that.’ Bubb argues that for people to buy into the Big Society they need to understand its benefits. He doubts whether communities will think it’s about social justice when their services are being cut at the same time.

Asheem Singh, deputy director of Cameron’s favourite think-tank ResPublica, concedes that there’s a huge public disconnect between what the Big Society is trying to do and the perception of its role. It’s about creating the infrastructure to allow communities ‘to get things done’, he tells Public Finance. ‘The vision is of a more resilient economy that has many different sectors,’ he says. ‘There is a social small- and-medium size enterprises space and an engaged civil society which allows people to take ideas and put them into action. Local authorities will have a social inclusion role connecting to ­community groups.’

The Big Society pilots, or vanguard communities as Cameron calls them, are designed to showcase the potential of this vision. Out of the four, only Eden’s Crosby Ravensworth is being driven by the community. Ironically it will now get an army of civil servants and a community organiser to push it forward, which might ­include finding new income streams.

The other three pilots cover Liverpool, Windsor & Maidenhead and Sutton in southwest London. The Liverpool project, which is being championed by drama writer Phil Redmond, includes boosting volunteering in the city’s museums (just as cuts are beginning to hit staff and opening hours) and creating a social enterprise to get young people involved in film. 

In Windsor & Maidenhead, the council is piloting small-scale participatory budgeting in its parks funding and is devolving power to its parish councils.

In Sutton, the project has until December to show the government its ‘Big Society deliverables’ through a training scheme for young people to become community champions and sustainable ­transport and ‘green ­living’ projects.

But even Singh concedes that achieving this vision while reducing spending will be difficult and, while the actual policy isn’t problematic, the politics might be. He’s alluding to the many ministers and party members still not sold on the Big Society. It remains the preserve of a small circle that is hugely influenced by ResPublica and its founder, Phillip Blond. There’s also the potential paradox of creating more civic action – only for it to be used to protest against cuts. ‘There will be natural anger, but if social action became about fiscal action then that would be a shame,’ he says.

The real threat to the Big Society will undoubtedly be cuts to capacity-building agencies, including social enterprises, local authorities and the traditional third sector. So how can you build more involved communities while reducing spending on them by up to 40%? Singh says that’s a difficult question. But he argues that the government is still ‘making the right noises’ and the Department for Communities and Local Government has been receptive to ResPublica’s ideas of creating social ­enterprises or ­‘lab-lets’ to build capacity.

The real test, he says, will be the launch of the Big Society Bank in April 2011. This will draw on dormant bank accounts to provide finance for social enterprises to help communities run their services or set up mutuals and co-operatives. And it is the government’s frequent riposte when asked how it intends to fund the Big Society.

‘The bank will really enable this to fly but it needs to be properly capitalised,’ says Singh. ‘There is a danger that it will be a centralised Treasury bank. It really shouldn’t be a bank as such, but a fund that can be drawn down as a pump-primer.’

Stephen Bubb warns that the bank is unlikely to provide the level of funding needed, particularly as the mainstay capacity builders – local authorities and the third sector – will suffer significant cuts. The Co-operative Group, which is managing the bank, has already indicated that it will have £60m available next year and up to £400m for the next two. ‘When Futurebuilders closed, it was receiving applications for loans of between £60m and £90m a month,’ says Bubb. ‘If we are going to achieve growth on the government’s scale it will need capital of between £1bn and £2bn.’

If the bank does have such limited funds, this leaves the creation of the Big Society in the hands of councils and the third sector, and here the government risks stymieing its own policy. Rob ­Whiteman, managing director of the Local Government Improvement & ­Development agency, says the disproportionate cuts expected in local government will have a ‘serious knock-on effect’ on the third sector.

He says the government is jeopardising vital preventative programmes that help lift people out of welfare dependency, raise aspirations and create more civic capacity. Whiteman is pushing for ‘real devolution’ from government with single place-based grants that enable councils to spend resources according to local need. ‘The government is going to affect the one area that actually commissions the third sector,’ he says. Bubb agrees and adds that ministers have shown little understanding of the close partnership between the two. ‘If you take away from both partners you injure their capacity,’ he says. 

But the government is unlikely to provide answers to these increasing ­tensions. Its ‘leaving them to it’ approach is a major part of the government’s laissez faire, localism language. Councils will be given their cash allocations, policy direction and certain expectations to achieve. And if it fails? Well, that will be councils’ problem in the polls. Or so the theory goes.

Jonathan Carr-West, head of the Centre for Local Democracy at the Local Government Information Unit, says the demands of the Big Society raise enormous issues for local government – not least how to get people interested in participating in their local services. ‘Engagement’ is something that the previous government wrestled with and certainly never got right. It takes time and investment, which councils patently lack, and people need to ­understand the benefits of taking part.

Economically there is no evidence that community-run services are cheaper, just more effective. The co-op movement commonly uses the mantra ‘more for the same’ for example. And there is the danger that getting people more engaged with services might actually have the opposite effect, and simply stir up more unrest and community tension. ‘As I go round the country I can see some councils handing over their assets,’ says Whiteman. ‘But it has to be balanced and done properly. It won’t work if it’s a cuts exercise.’

Carr-West says the Big Society is a ­medium-term solution and councils will have to find ways of balancing their immediate efficiency agenda with a gradual move towards the initiative.

In the London Borough of Lambeth, the Labour-run authority is due to shed up to 400 jobs this year alone while planning its own version of Big Society in the form of a co-operative council. It doesn’t expect to get this off the ground until 2014 and the bulk of the work will be around community consultation and building interest in some of its propositions before piloting them. It has acknowledged that a more localist or co-operative approach will mean ­enormous structural and cultural change.

Carr-West suggests that the real Big ­Society issue for councils will be the fear that it will be used to bypass them. Cameron has suggested that a large part of the agenda is about reducing bureaucracy and giving people more freedom.

What this hasn’t addressed, however, is the issues of governance and accountability – how councils will ensure that the services are being provided to the same standard as before and that public funds are being well spent. The suggestion is that each council will come up with its own system of accountability, largely helped by the government’s desire to publish line-by-line spending.

But this again means enormous ­structural change. The unions will also want to see how the Big Society will deal with procurement rules – that services have to be tendered before they’re transferred – and the likely impact on their members. In reality there are huge pieces of the Big Society jigsaw yet to be put into place, with little time or resources.

Whether the Big Society creates ­hundreds of communities like Crosby Ravensworth or not, local government is about to undergo the biggest change for a generation. In five years’ time, it’s likely that councils will be merely commissioning services. But whether they commission them from a truly pluralist market, which includes community-run organisations staffed by concerned mums and civic-minded grannies, depends on the political will and drive behind the Big Society rhetoric. And, ultimately, on whether ­balancing the books takes precedence.