Fight or flight?

29 Jun 11
Judy Hirst

Easy councils. Remember them? They were meant to be the no-frills, low-budget authorities that supplied only the most residual services – and outsourced everything that wasn’t nailed down.

Love them or hate them, these outriders for a government with a privatising mission certainly sounded radical. One year on though, it all looks anything but easy.

Barnet – one of the most gung-ho of outsourcing councils – is bogged down in embarrassing disputes about its procurement procedures.

Suffolk has put its ‘virtual’ council plans on hold (experts say they would not make the savings intended). A survey by Unison reveals that more than half of town halls are taking outsourced services back in-house.

Writ large, this is the story of the coalition’s grand plans for public service reform. Since declaring the public sector open for business from ‘any willing provider’, the government has performed a screeching handbrake turn.

To the evident disgust of the CBI, competition incentives have been watered down. The long-postponed public services white paper will mostly offer a rehash of personalised budgets and parish council powers, designed to offend no one.

Some of this is clearly down to politics. Cameron and Clegg have both gone out of their way to detoxify the coalition brand since May 5. And with strikes over public sector pensions, there’s a risk of fighting on too many fronts. Even Eric Pickles has told PF (see Street-fighting statesman, p24) he plans to ‘put more love about’.

But there’s something else too. In the wake of the NHS ‘pause’ – and the debacle over care-home provider Southern Cross – private provision of public services has come under sustained scrutiny.

Barnet’s travails show some of the pitfalls of private contracting – and the perils of inadequate audit. Relying on a US-style ‘small state’ model for local government is starting to look less attractive. The government has told the CBI there will be no ‘wholesale outsourcing’ of services.

All of which is very confusing for finance professionals gathering at this month’s Cipfa conference in Birmingham.

Getting to grips with the new public services landscape is a tough call when the terrain keeps shifting. But assistance is at hand in this issue of PF.

From a warts-and-all exclusive with the communities secretary – to surveys of the economic risks facing Japan and the US – the contents should help navigate a way through the fog. Or at least offer some in-flight entertainment.

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