The idea of a council 'super chief executive' has many attractions. But there are potential long-term risks too, and cost-cutting should not be the main motivation for such mergers
Successful in business and politics, Lord Heseltine is from that rare and disappearing breed of people who ran something before holding high state office. His views on merging the role of leader and chief executive in local government into new 'super chief executives' should therefore be considered seriously.
As the media have noted, this would further the trend whereby councils such as Kent, Wiltshire, Harrow and Northumberland have abolished the chief executive role. This is often attributed to reducing costs, but is more usually a de facto response to elected leaders wishing to run things more directly.
Personally, I think Lord Heseltine starts from a different place. He wishes to see high calibre individuals in local government, who are held to account by the electorate and have the gravitas to stand up to Whitehall. He probably thinks that he wouldn't take nonsense from a government department if running a great city with a mandate from the public, so let's have more people like him standing for office. Indeed it is common overseas for senior politicians to swap between high profile central government and significant local roles.
Potentially this is a more constructive debate than the present UK trend, where council chief executive positions are being abolished without their political leaders being expected to have the managerial experience to fulfill both roles within a large organisation.
But Lord Heseltine should consider two other important issues, or his plans could fail - bearing in mind that the doubling of members' pay a decade ago failed in its aim of broadening the range of people holding local office.
First, we must address the potential issues created when political chief executives, elected on a party ticket, choose their managerial, and not just political teams, from their allies. There should be a transparent debate about whether the public accepts such a significant break with the UK tradition that senior officials are politically neutral.
Secondly, political parties would surely need to change their selection processes so that chief executives, that is people with executive organisational leadership experience in private or public sectors, are chosen as their party candidates. In other words, like Heseltine himself or former Mayor Bloomberg, political parties will need to find executives with an interest in politics to fight for office, rather than just a select cohort of political leaders with an interest in being an executive.
While I admire Lord Heseltine, I cannot see the public accepting a political model locally that ends our tradition of the political impartiality of government officials. Therefore I believe that some officials, such as the professionally qualified CFO, will have to retain statutory roles and protection, if they are to continue to act in the public interest.
I am also doubtful that the parties are capable of delivering people with appropriate executive experience to undertake such roles. Indeed if we were to imagine the 10 'best' local government chief executives possible, could we see the political parties choosing them to stand for office? Conversely if we thought of the 10 'worst' possible council leaders would they be likely to succeed in a nomination process?
In the meantime this is a difficult period for senior management in central government, local government and health. There is an undercurrent of cynicism across parties where progress is portrayed as the work of political leadership, and failure is placed squarely on the lap of senior officials. In local government, for example, we have seen the role of director of children’s services increasingly difficult to fill and the role of chief executive more and more in question. On the latter, my advice to councillors is to evaluate the costs and benefits of the chief executive role not only in the short term, but also on the long term numbers too.
Keeping perspective is of course important. Most good council leaders want a good chief executive on their books; and good chief executives reciprocate by valuing working for a good political leader. But it is a cause for concern that there isn’t more of a mature debate underway about some alarming recent trends.
Money is tight and it does reduce costs to ask a director to double up as head of paid service. While to many elected members it appears attractive for the leader and cabinet to take a more managerial role with senior staff. Such streamlining also reduces office overheads too, as chief executives often have office staff dealing with complaints, correspondence and administration.
However, when accounting for the savings you may gain - of around £300k per annum through such a move or around 0.1%of a council's £300m net budget - this would contribute around 2% if you needed to find £15m savings in your budget each year.
On the other hand, making a 10% productivity gain across the council through a programme of transformation achieves £30m per annum, or 100 times the saving from abolishing the CEO role. Such programmes are achieved by negotiating more favourable staff terms, raising morale, stretching performance, implementing better ICT, streamlining process or designing effective upstream demand management on budget pressures. Such strategies protect front line services.
Without a chief executive, who managerially coordinates such material transformation? Who deals with council wide coordination of a major service crisis or coaches better executive performance? If the political process is not functioning well, who ensures good governance and transparency for all elected members of all parties?
Will a council leader have the time or experience to do all this? Would a rotating director achieve what was needed or a director made 'managing director' see it through? Will the new arrangement have individuals with experience and competence to do this across a large complex organisation? If there is any uncertainty on the answer, I would respectfully advise caution, especially if it is viewed as a short-term means to save money, because risks inevitably have a cost too.
Rob Whiteman is chief executive of CIPFA
