How can public sector budgets be cut without damaging service quality? This question will dog politicians from now until general election day and beyond.
The canny ones, however, have a carefully prepared answer. They point to Total Place, the pilot scheme that is central to the Operational Efficiency Programme, and claim that this will identify duplication and waste, leading to more efficient services.
It’s a great aspiration and, as Tony Travers suggests in our cover feature, there is much to applaud about Total Place. But it’s a story we’ve heard many times before.
Joined-up government has been the rallying cry of New Labour since it first came to power in 1997. Despite all the hype surrounding shared services and pooled budgets, the successes have been few and far between.
Whitehall departments have never been keen to combine their budgets with local government’s. There is a lack of synchronicity in terms of financial systems, timescales and general culture.
Even at the local level there are turf wars. In health and social care, for example, only 3.4% of the total budget comes from pooled funding.
Michael O’Higgins, the chair of the Audit Commission, highlights the common problems. He warns that town halls and primary care trusts focus on financial arrangements and frequently forget about user needs.
Total Place would do well to avoid a similar fate. It’s easy to get caught up in the process and skirt over the outcomes, especially when there is an urgent requirement to axe huge chunks of spending.
And there might also be unexpected consequences. Guy Clifton shows in this issue the impact that Total Place can have on the wider economy . Local unemployment rates could soar and small businesses might find demand nosedives.
So, there is a great deal at stake. But there is also a lot to gain. An efficiency saving of 1% could lead to a reduction of £600m in the local government budget alone.
For Total Place to succeed, it must be seen primarily as a way of improving services, with the cost saving an added benefit. Otherwise, trade unions will oppose it, and staff will not be supportive.
Central government will also have to change the habits of many lifetimes and work in synch with town halls.
History is not on the side of Total Place, but there is little alternative. In many respects, it could be sink or swim.
Mike Thatcher is the editor of Public Finance
