Northern Ireland’s councils are preparing for a restructuring that has been planned for decades and is now set for 2015. But it looks as if the opportunity to transform the sector at the same time will be missed
The current reform of local government in Northern Ireland must be one of the most long drawn-out in history.
Over the past 20 years or so, 26 councils, representing 1.7 million people in an area the size of Yorkshire, have been limbering up, stretching (and at times, flexing) their muscles, carefully watching their intake, and conserving their energy as they get ready for change. There have been a number of false starts over the years, but May 2015 is now the date when the 26 will become 11.
The current configuration and constitution of local government goes back to 1973. Of course, there have been some changes along the way, most notably last year when financial regulations were modernised to give councils increased borrowing powers, as elsewhere in the UK.
However, it has to be recognised that local government in the province is different to that in the rest of the UK. With the exception of Belfast City Council, it is on a smaller scale, the politics are different and councils’ powers and functions are fewer. Many public services are run by central government and its arm’s-length bodies. To councils’ great credit, they have also had to operate during a period of horrible conflict.
So, with two years to go before 11 new councils open their doors for business, where are we with the transition?
The legislation is currently working its way through the Assembly. New council boundaries are being drawn up and governance arrangements led by Environment Minister Alex Attwood are in place to oversee the transition.
‘Task and finish’ groups have been set up to address specific issues, including HR, finance and IT. Over the past two years, councils have been encouraged to start integrating, collaborating and becoming more efficient – the ‘Ice’ programme.
The verdict so far? The changes have been strong on process and transition, short on vision, short on transformational leadership and short on impact. Although larger councils such as Belfast, which have the capacity to realise savings, have made some progress, the Ice programme has offered up little and is melting away. In summary, there is much to do and time is running out.
Change theorists will know the difference between transitional change and transformational change. At present, the focus is on transitional issues such as convergence of rate levels; sensible consolidation of debts and reserves of merging councils – faced, for example, by Fermanagh and Omagh; capital and asset management plans that have to be drawn up for the new councils; and integration of new functions such as planning and economic development.
While these are important, reforms present an opportunity for more radical, transformational change that looks beyond the reduction of 26 councils to 11 with some increased functions. The focus should be on the way councils are run and the way they provide public services. Lessons could and should be learned from the rest of the UK, where radical ways of providing public services are being developed driven by the need to save money. To date, there have been no financial or other imperatives to drive change in Northern Ireland.
To maximise the opportunities that more fundamental reform can bring, strong leadership is needed in all areas – by central government, by local politicians through the Northern Ireland Local Government Association, and by senior executives in councils. Leadership capacity in the sector should be developed and built to help address some of the big transformational issues, with strong governance and strategic financial management in the spotlight. Professional finance and accountancy skills need to be enhanced, with an increased role for the head of finance position. Some councils don’t have a qualified accountant on their books.
A high level steer on the thorny issue of shared services is needed, a political hot potato since the suggestion of a central business services unit for the entire sector. There is little evidence of significant financial savings or service improvements to date from the introduction of major shared service projects in Northern Ireland. An alternative approach might be to share capacity across the sector, matching surpluses with shortages, irrespective of council boundaries.
This approach can also get around some political opposition to private sector involvement in providing shared services. Full marks go to North Down Borough Council and its neighbours for banding together to jointly commission treasury management services. More of this needs to happen.
With increased powers – for example for planning, community planning and economic development – councils should be considering alternative delivery models based on well governed strategic partnerships that share risks and rewards and focus on the impact of services for local citizens.
Strong leadership is also needed to be clear about who pays for the reforms, with central government and local councils at loggerheads. This could easily be put to one side, for example, by an innovative form of borrowing to finance reforms, to be repaid from savings made. Such a deal would provide an imperative for transformational change in the sector, especially as the indications are that spending cuts are likely to be severe in the next Spending Review.
So there is still a lot to be done for local government to take full advantage of the opportunity that reform brings. The success of the transformation will depend on strong leadership at every level, with finance at the heart of reform. But time is fast running out.
Steve Mungavin is head of CIPFA in Northern Ireland
This article first appeared in the March edition of Public Finance
