By Philip Johnston
2 October 2009
Conservatives gather next week knowing they need to spell out plans for austerity government. They’re taking tips from Tory ‘easyCouncils’ on how to get more for less. Philip Johnston asks whether the ideas will get off the runway
The Conservatives are heading to Manchester this weekend for their final annual conference before the general election, buoyed by the realistic prospect that they could soon be back in government for the first time since 1997. It seems so long since they were in office that it is hard to imagine what they would do. Or is it?
The Conservatives have, after all, been running the majority of local councils (in England at least) for some time. Can we find a clue there to how a David Cameron-led administration would run our public services?
The greatest imperative for a Tory government will be to cut costs and save money. They have promised to maintain growth in NHS spending and overseas aid. Welfare bills will continue to rise for some time because unemployment will lag behind any improvements in the economy. That is going to mean even less money left over for other departments. A good deal of public spending is filtered through and administered by local authorities. Is there, in local government, a template for a national Conservative government to follow?
George Osborne, who is the most likely next chancellor, clearly thinks so. He recently told a gathering of Tory councillors: ‘I want the Conservative Party to learn from what local Conservative councils are doing right now, as they are dealing with many of the constraints that we may face very soon. When it comes to rooting out waste and cutting costs, or improving services through innovative new policies, Conservative councils are showing it can be done.’
So that is pretty unequivocal. Tory central command is looking to the experience of Conservatives in local government for a lead on how they will run public services. What, then, can we expect? Normally, when faced with such dire financial circumstances, the squeeze is applied across the board and the providers of frontline services find themselves with significantly reduced budgets. However, the mantra of the Tories as the election approaches is ‘more for less’: there is an assumption that by cutting out waste and unnecessary bureaucracy, services can be not only maintained but improved.
At the same time, Cameron is adamant that within the constrained budgets councils will have great latitude to do as they see fit. The Conservative leader told the Local Government Association annual conference in July: ‘All those layers of bureaucracy that are a straitjacket on everything you do – the process targets, the Comprehensive Area Assessments, the regional strategies and plans – we’re going to scrap them and let you get on with the job.
‘All that ring-fencing that makes you budget with one hand behind your back: we’re going to phase it out to allow for real local discretion on spending. One change that will have an incredibly big effect is our plan to give you, in the legal jargon, a general power of competence. This means that councils can do literally whatever they like as long as it’s legal.’
How does this square with a budget squeeze? Councils will clearly not be able to do whatever they like if it entails spending more money. If they seek to raise more by levying higher council taxes, is the Treasury really going to sit there and let that happen or will they insist on capping?
Sensing the way the wind is blowing, some Tory councils are devising innovative ways of saving money or spending less of it. Barnet in north London is pioneering an approach, known as Future Shape, predicated upon big cuts in its budget (up to 15%) and modelled on low-cost airlines such as Ryanair and easyJet.
It is proposing to offer residents a range of services, from the bog standard, no-frills variety to de luxe models, which would be more expensive. The council is looking to shed some of its 3,500 workers and outsourcing services to save £15m a year. The management of housing, refuse, recycling and residential care could go to private companies under the scheme.
Mike Freer, the council leader, says the model, which one official dubbed ‘easyCouncil’, would not harm the quality of services as long as resources were carefully targeted. ‘Some things will be cheap and cheerful and in other areas we will provide complete services,’ Freer says. ‘This is not about rolling back the frontiers of the state, but about targeting our interventions.’
Freer, who is also the Conservative parliamentary candidate for Finchley and Golders Green, adds: ‘Given that everyone expects local government grants to be squeezed whichever party is next in power, the next stage is how we are going to prepare ourselves and what we should be doing. Barnet residents should see improved services at a lower cost. It will not mean service cuts in any way.
‘We would be daft not to look at other successful business models such as Ryanair. You might not like Ryanair but you cannot deny they have shaken up the airline industry and made the costs of their products very transparent. We are looking at how their relentless drive for keeping costs down has worked for them and we are looking at doing the same.’
This is, indeed, an argument about the very essence of local government. What is it for? The Labour group leader on Barnet council, Alison Moore, argues that the Tory strategy would result in a less fair society. ‘The examples of Ryanair and easyJet send the message that the council is there to do the barest minimum at the lowest cost and if you want anything else, you will have to pay extra. That will not promote an equitable society or open up opportunity more widely.’
However, why should it be the function of local councils to promote an equitable society? EasyJet does not, in fact, offer the barest minimum of services. What it does is get its passengers where they want to go at the lowest possible cost. The service is to move people from airport A to airport B; anything else, such as a meal, drinks, in-plane movie, is additional and should be paid for. Is it so shocking to try to do the same with public spending?
When the Labour Party finally came around to an acceptance that cuts would be needed, Schools Secretary Ed Balls said £2bn could be shaved off the education budget without harming the teaching of children. All this did was to raise perfectly legitimate questions as to why so much money was being spent in the first place.
All the assumptions that have held sway in this country almost since the end of the Second World War will need to be revisited. Opinion polls show there is no longer public support for spending to continue at current levels if it means higher taxes. The Tories sense that the public would be on their side if they proceeded with a Barnet-style approach.
And although recent poll findings were less than encouraging, they might well be right. They already have an exemplar in local government, and have had for many years. Twelve months before Margaret Thatcher’s 1979 election victory, the Conservatives captured the London Borough of Wandsworth. The local party was the beneficiary of a national swing against a Labour government that had presided over an economic catastrophe, with inflation above 20% and the country in hock to the International Monetary Fund.
In the normal run of events, the borough would have reverted to its former political control, a benighted inner-city Labour fiefdom. But that didn’t happen.
Instead, the Tory administration cut out waste and gave people the services they wanted, while at the same time charging the lowest council tax – currently £681 for a Band D property – in the country. Wandsworth became a byword for free-market municipalism, with contracting out, council house sales and cuts in unnecessary jobs. Since the council tax was introduced in 1993, it has increased by 52% in Wandsworth compared with 133% on average elsewhere.
The council did this without compromising on services. Indeed, it was consistently given top marks by the Audit Commission for maintaining the highest standards of education, social care and, no doubt, street cleaning. Wandsworth was loathed by Labour, which assumed all inner-city areas should be within its sphere of interest.
But the local voters did not see it that way. When they took over, the Tories had a narrow majority over Labour on the council. At the last election, 51 Tory councillors were returned compared with just nine Labour.
Other Conservative-run London boroughs have followed this approach (though not all). Westminster, Kensington & Chelsea and, more recently, Hammersmith & Fulham charge lower taxes than Labour-run neighbours, yet still provide good services. Kent is pioneering innovative value-for-money approaches. In Essex, the council is setting up its own bank and post office network and bringing in IBM to run its back-office functions.
The approach of Wandsworth and other councils has paid significant political dividends for the Tories. Barnet’s easyCouncil might prove just as popular if it gets off the runway. But there is an ideological problem here for Cameron. How does he promote such unabashedly Thatcherite and consumerist ideas while at the same time trying to give the impression that the Tories are now not only a progressive party, but the only progressive party?
There are other contradictions. Despite their support for ‘localism’, the Tories in local government are pursuing ideas for cost-cutting partnerships and mergers, sharing chief executives and other officers to save money. In Suffolk, plans are being laid to merge seven district councils to plug a £100m black hole in finances over the next five years. In the meantime, they will pool resources to end duplication and cut down on bureaucracy. Cameron is eager for more of this, although, perversely, it could result in bigger councils that are more distant from residents.
The Tories are preparing a green paper to be published soon and are planning a local government and housing Bill in the first session of a new government to put some of their ideas into practice. Councils could be given the powers and functions of quangos set to be abolished by a Conservative government. Talks are already under way over which they should be, with local authority chiefs seeking extra authority over planning, housing and transport.
Cameron will have to show early on in his premiership that the idea of more for less is not just a clever sound bite. But he does seem to have bought into the whole concept of far greater privatisation of council functions than many people realise. It appears that a new Conservatism is taking shape, although it is really a revival of an earlier approach that some councils adopted in the 1980s and continue to reap political rewards from. If Cameron is serious about giving local authorities power to pursue their own priorities, Barnet might offer a glimpse of the future direction of public services under the Tories.
It won’t be easy to sell against the torrent of criticism that will come from Labour, the Liberal Democrats and the unions, as it did before. But this time the Conservatives will be tapping into a cultural change that simply had not occurred when large-scale contracting out was tried in the 1980s. In this internet age, where people are more used to shopping around and object to being told to like it or lump it, it might be an idea whose time has come. Welcome to easyBritain.
Philip Johnston is assistant editor of the Daily Telegraph
2 October 2009
Conservatives gather next week knowing they need to spell out plans for austerity government. They’re taking tips from Tory ‘easyCouncils’ on how to get more for less. Philip Johnston asks whether the ideas will get off the runway
The Conservatives are heading to Manchester this weekend for their final annual conference before the general election, buoyed by the realistic prospect that they could soon be back in government for the first time since 1997. It seems so long since they were in office that it is hard to imagine what they would do. Or is it?
The Conservatives have, after all, been running the majority of local councils (in England at least) for some time. Can we find a clue there to how a David Cameron-led administration would run our public services?
The greatest imperative for a Tory government will be to cut costs and save money. They have promised to maintain growth in NHS spending and overseas aid. Welfare bills will continue to rise for some time because unemployment will lag behind any improvements in the economy. That is going to mean even less money left over for other departments. A good deal of public spending is filtered through and administered by local authorities. Is there, in local government, a template for a national Conservative government to follow?
George Osborne, who is the most likely next chancellor, clearly thinks so. He recently told a gathering of Tory councillors: ‘I want the Conservative Party to learn from what local Conservative councils are doing right now, as they are dealing with many of the constraints that we may face very soon. When it comes to rooting out waste and cutting costs, or improving services through innovative new policies, Conservative councils are showing it can be done.’
So that is pretty unequivocal. Tory central command is looking to the experience of Conservatives in local government for a lead on how they will run public services. What, then, can we expect? Normally, when faced with such dire financial circumstances, the squeeze is applied across the board and the providers of frontline services find themselves with significantly reduced budgets. However, the mantra of the Tories as the election approaches is ‘more for less’: there is an assumption that by cutting out waste and unnecessary bureaucracy, services can be not only maintained but improved.
At the same time, Cameron is adamant that within the constrained budgets councils will have great latitude to do as they see fit. The Conservative leader told the Local Government Association annual conference in July: ‘All those layers of bureaucracy that are a straitjacket on everything you do – the process targets, the Comprehensive Area Assessments, the regional strategies and plans – we’re going to scrap them and let you get on with the job.
‘All that ring-fencing that makes you budget with one hand behind your back: we’re going to phase it out to allow for real local discretion on spending. One change that will have an incredibly big effect is our plan to give you, in the legal jargon, a general power of competence. This means that councils can do literally whatever they like as long as it’s legal.’
How does this square with a budget squeeze? Councils will clearly not be able to do whatever they like if it entails spending more money. If they seek to raise more by levying higher council taxes, is the Treasury really going to sit there and let that happen or will they insist on capping?
Sensing the way the wind is blowing, some Tory councils are devising innovative ways of saving money or spending less of it. Barnet in north London is pioneering an approach, known as Future Shape, predicated upon big cuts in its budget (up to 15%) and modelled on low-cost airlines such as Ryanair and easyJet.
It is proposing to offer residents a range of services, from the bog standard, no-frills variety to de luxe models, which would be more expensive. The council is looking to shed some of its 3,500 workers and outsourcing services to save £15m a year. The management of housing, refuse, recycling and residential care could go to private companies under the scheme.
Mike Freer, the council leader, says the model, which one official dubbed ‘easyCouncil’, would not harm the quality of services as long as resources were carefully targeted. ‘Some things will be cheap and cheerful and in other areas we will provide complete services,’ Freer says. ‘This is not about rolling back the frontiers of the state, but about targeting our interventions.’
Freer, who is also the Conservative parliamentary candidate for Finchley and Golders Green, adds: ‘Given that everyone expects local government grants to be squeezed whichever party is next in power, the next stage is how we are going to prepare ourselves and what we should be doing. Barnet residents should see improved services at a lower cost. It will not mean service cuts in any way.
‘We would be daft not to look at other successful business models such as Ryanair. You might not like Ryanair but you cannot deny they have shaken up the airline industry and made the costs of their products very transparent. We are looking at how their relentless drive for keeping costs down has worked for them and we are looking at doing the same.’
This is, indeed, an argument about the very essence of local government. What is it for? The Labour group leader on Barnet council, Alison Moore, argues that the Tory strategy would result in a less fair society. ‘The examples of Ryanair and easyJet send the message that the council is there to do the barest minimum at the lowest cost and if you want anything else, you will have to pay extra. That will not promote an equitable society or open up opportunity more widely.’
However, why should it be the function of local councils to promote an equitable society? EasyJet does not, in fact, offer the barest minimum of services. What it does is get its passengers where they want to go at the lowest possible cost. The service is to move people from airport A to airport B; anything else, such as a meal, drinks, in-plane movie, is additional and should be paid for. Is it so shocking to try to do the same with public spending?
When the Labour Party finally came around to an acceptance that cuts would be needed, Schools Secretary Ed Balls said £2bn could be shaved off the education budget without harming the teaching of children. All this did was to raise perfectly legitimate questions as to why so much money was being spent in the first place.
All the assumptions that have held sway in this country almost since the end of the Second World War will need to be revisited. Opinion polls show there is no longer public support for spending to continue at current levels if it means higher taxes. The Tories sense that the public would be on their side if they proceeded with a Barnet-style approach.
And although recent poll findings were less than encouraging, they might well be right. They already have an exemplar in local government, and have had for many years. Twelve months before Margaret Thatcher’s 1979 election victory, the Conservatives captured the London Borough of Wandsworth. The local party was the beneficiary of a national swing against a Labour government that had presided over an economic catastrophe, with inflation above 20% and the country in hock to the International Monetary Fund.
In the normal run of events, the borough would have reverted to its former political control, a benighted inner-city Labour fiefdom. But that didn’t happen.
Instead, the Tory administration cut out waste and gave people the services they wanted, while at the same time charging the lowest council tax – currently £681 for a Band D property – in the country. Wandsworth became a byword for free-market municipalism, with contracting out, council house sales and cuts in unnecessary jobs. Since the council tax was introduced in 1993, it has increased by 52% in Wandsworth compared with 133% on average elsewhere.
The council did this without compromising on services. Indeed, it was consistently given top marks by the Audit Commission for maintaining the highest standards of education, social care and, no doubt, street cleaning. Wandsworth was loathed by Labour, which assumed all inner-city areas should be within its sphere of interest.
But the local voters did not see it that way. When they took over, the Tories had a narrow majority over Labour on the council. At the last election, 51 Tory councillors were returned compared with just nine Labour.
Other Conservative-run London boroughs have followed this approach (though not all). Westminster, Kensington & Chelsea and, more recently, Hammersmith & Fulham charge lower taxes than Labour-run neighbours, yet still provide good services. Kent is pioneering innovative value-for-money approaches. In Essex, the council is setting up its own bank and post office network and bringing in IBM to run its back-office functions.
The approach of Wandsworth and other councils has paid significant political dividends for the Tories. Barnet’s easyCouncil might prove just as popular if it gets off the runway. But there is an ideological problem here for Cameron. How does he promote such unabashedly Thatcherite and consumerist ideas while at the same time trying to give the impression that the Tories are now not only a progressive party, but the only progressive party?
There are other contradictions. Despite their support for ‘localism’, the Tories in local government are pursuing ideas for cost-cutting partnerships and mergers, sharing chief executives and other officers to save money. In Suffolk, plans are being laid to merge seven district councils to plug a £100m black hole in finances over the next five years. In the meantime, they will pool resources to end duplication and cut down on bureaucracy. Cameron is eager for more of this, although, perversely, it could result in bigger councils that are more distant from residents.
The Tories are preparing a green paper to be published soon and are planning a local government and housing Bill in the first session of a new government to put some of their ideas into practice. Councils could be given the powers and functions of quangos set to be abolished by a Conservative government. Talks are already under way over which they should be, with local authority chiefs seeking extra authority over planning, housing and transport.
Cameron will have to show early on in his premiership that the idea of more for less is not just a clever sound bite. But he does seem to have bought into the whole concept of far greater privatisation of council functions than many people realise. It appears that a new Conservatism is taking shape, although it is really a revival of an earlier approach that some councils adopted in the 1980s and continue to reap political rewards from. If Cameron is serious about giving local authorities power to pursue their own priorities, Barnet might offer a glimpse of the future direction of public services under the Tories.
It won’t be easy to sell against the torrent of criticism that will come from Labour, the Liberal Democrats and the unions, as it did before. But this time the Conservatives will be tapping into a cultural change that simply had not occurred when large-scale contracting out was tried in the 1980s. In this internet age, where people are more used to shopping around and object to being told to like it or lump it, it might be an idea whose time has come. Welcome to easyBritain.
Philip Johnston is assistant editor of the Daily Telegraph
