Right or wrong, the coalition’s budget-cutting course is set and local leaders need to work with others to minimise the pain
The government’s declared mission is to reduce the size of the state and the contribution of publicly funded public services.
Some political leaders, non-executive directors and senior managers, realising before October’s Comprehensive Spending Review that government policy would demand deep cuts to balance budgets, adopted a strategic approach. However, anecdotal evidence indicates that much budget-setting has been far from strategic. Indeed, too many authorities are still scrambling for options to close the financial gap for 2011/12.
In all likelihood, most cuts, if not already in train, will fail to provide full year financial benefits in 2011/12. Worse still, because of the failure to plan ahead and the consequential panic approach, many cuts that are being made will result in unintended consequences for another public sector budget – with the ironic outcome that total public expenditure will increase. Uncoordinated cuts in a single agency or between agencies will inadvertently compound the impact on the same client groups and/or communities.
A report from the Association of Chief Executives of Voluntary Organisations on the impact of funding cuts on the third sector demonstrates that the rhetoric about the ‘Big Society’ is not being matched by financial support – with potentially dire consequences.
I also foresee that many budgets will ‘assume’ unrealisable financial targets, with the figures on the spreadsheets looking fine in February only to unravel as the year progresses, with the need to find additional cuts mid-year. In some cases, finance directors might challenge such budgets – but then more precious time will have been lost.
While many in the public sector, including me, would have argued for a very different macroeconomic strategy, this government has set its course for four years and budgets have to be set.
Every effort must be made to avoid an unfocused and uncoordinated mess with unnecessary cuts and avoidable harm to communities and individuals. Public bodies must learn from the experience of setting 2011/12 budgets, and evaluate the impact of their decisions and how they took them. If mistakes are not to be repeated, a more strategic mindset has to be adopted – immediately.
While many might not recognise the government’s claim that ‘we are all in this together’, in reality there is a responsibility on local leaders to ensure that the public sector pulls together and co-operates with local businesses, voluntary groups, communities, public service staff and trade unions to make the most of available resources.
There are several ways to achieve this. First, ‘Total Place’ principles – looking at an area and its funding sources as a whole – need to be adopted. This should be underpinned by place-based strategic commissioning, informed by consultation with all appropriate parties, to: choose the outcomes sought and consequently which services to redesign and fund and which not to; determine who is best placed to provide the services; manage risks effectively; eliminate duplication between agencies; and share people and assets.
The aim should be ‘all agencies in this together for all local people’.
John Tizard is the director of the Centre for Public Service Partnerships (CPSP@LGIU)
