LGA ditches ‘single services organisation’ plans

22 Jan 09
The Local Government Association has abandoned plans to restructure its group of companies – including the Improvement and Development Agency – into a single services organisation

23 January 2009

By Tash Shifrin

The Local Government Association has abandoned plans to restructure its group of companies – including the Improvement and Development Agency – into a single services organisation.

The controversial plans – described by one insider as a 'lawyerfest', because they would have required constitutional changes and secondary legislation – have been behind the turmoil at the LGA, where chief executive Paul Coen was sent on gardening leave last month.

Coen had fallen out with the LGA's political group leaders over implementation of the organisation's development strategy – tension that increased after new LGA chair Margaret Eaton took office in September.

The strategy was to include closer working with member councils and councillors as well as the integration of the LGA Group – the IDA, Local Government Employers, project delivery organisation 4Ps and regulatory specialist Lacors – into a single 'local government services' body.

But the LGA is now aiming to realign its work to ensure that different parts of the group work together and duplication is reduced without making major organisational changes.

Minutes of the LGA office holders' group meeting on January 14 reaffirmed its commitment to the development strategy.

But they added: 'The priority is for the LGA Group to work more closely together, governed by a single, politically set direction and working to the priorities set through the corporate business plan. Any discussion of structures is secondary to this aim.'

The political leaders also resolved to 'take back control' of the strategy, and have disbanded the team working on the shake-up.

Deputy chief executive John Ransford, who is acting up in Coen's absence, is drawing up a business case 'whereby a single, central direction for the group could be achieved without restructuring the central bodies'.

Liberal Democrat group leader Richard Kemp said the political chiefs had reaffirmed the development strategy's aims of improving efficiency and services to councils. 'But we have said it won't be dealt with as a separate strategy but as part of our ordinary business and budget planning. We agreed that getting rid of the individual companies such as IDA wasn't important, but working together is.'

He added: 'The review of legal structures was getting in the way of activity.' Now, the LGA would use joint appointments and pooled teams across its group of organisations to ensure better co-ordination, Kemp said.

LGA sources also said that local government minister John Healey had poured cold water on the shake-up plans at a December meeting.

On January 15, the LGA executive agreed an efficiency target of 10% of core funding for 2009/10. It has announced that subscription rates will be reduced or frozen.

The LGA has come under pressure from councils over its handling of recent crises. The executive noted discontent with the LGA's handling of the Icelandic banking meltdown, stating: 'There is no doubt that a small number of councils considered themselves compromised at the time by LGA action.'

PFjan2009

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