Local enterprise: unlocking public sector entrepreneurialism

11 Jul 16

With devolution, the role of finance will become more about supporting change to create a strong commercial and civil society

The promise of devolution is gaining the power to solve the problems that you are closest to by setting policy, raising resources and coordinating the state locally.

We have seen wide-ranging devolution to Scotland, Northern Ireland and Wales, where the default is to take over on all matters not reserved for Whitehall. So, for example, the home secretary has no role in policing in Scotland while borders and counter terrorism are reserved; the Scottish Government sets policy, raises tax resource and coordinates the state.

This default is not a facet of English devolution. In England, Westminster, in terms of legislation, and Whitehall, in terms of management, retain everything other than matters they devolve.

This is a profound difference because, other than metro mayors and police and crime commissioners – which are clearly still in development – England does not have comparable directly elected devolved administrations that sit between central and local government to manage the whole state locally. Combined authorities do not set policy, raise tax resource or coordinate the whole local state.

Without being a pedant, technically much of what we see in England is delegation and not devolution. But it’s a start and, once this has happened, it is often difficult to roll back. Scots are not demanding that Jeremy Hunt directly controls their NHS. We will see whether Mancunians welcome a sense of more direct control of their healthcare system.

The most powerful of devolved local governments in England, the Greater London Council, was abolished and there is no reason to believe that the partial early steps of devolution in England will not be rolled back. And, if devolution does not add value, the public will probably say “a good job too”. While abolishing the GLC was controversial, it was also popular. There is a strong English tradition that the mother of all parliaments is a pretty powerful mummy where we elect MPs to run the country and tell us what to do.

But remember, this is not all about wholly homegrown dynamics. We see a global trend for economic growth that focuses on cities and city regions.

CIPFA’s annual conference this year is examining what it takes for economies to succeed.

Recently, chief inspector of schools Sir Michael Wilshaw challenged leaders in Liverpool and Manchester to demonstrate “grit, imagination, faith and bloody mindedness” when tackling failing schools. His comments show that local leaders cannot rely on holding powers but must bring about change in complex, linked networks.

For public servants, success will be in nurturing local networks to create a strong commercial and civil society that reciprocates to support social progress and financial security in the public sector. The move to 100% business rate retention for local authorities is perhaps the most telling example of how devolution will look.

Councils’ own finances will be reliant on local economic success, so they will have a greater incentive to prioritise business support.

In the devolved world, curing the sick will not simply be about providing care. It will be an ongoing process of communication and leadership to bring communities together to tackle the causes of sickness. Mixes of businesses, charities and even passionate individuals who understand local cultural and environmental factors can surpass the one-size-fits-all approaches of the past.

Finance professionals and system leaders are at the heart of this revolution. Balancing budgets will be less about moving figures around and more about driving real change to grow community success.

There is an evolution to how we work and barriers to unleashing the full force of local public service entrepreneurialism still exist but, at the present rate, we are heading for a tipping point. Yes, public services have suffered unprecedented upheaval. And yes, many challenges remain. But now is the time to focus on a positive future with renewed energy and confidence.

  • Rob Whiteman
    Rob Whiteman

    Chief executive of CIPFA since 2013, after leading the UK Border Agency and the Improvement & Development Agency. Previously, he was CEO at Barking and Dagenham council.

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