Transcript Radical responses to municipal budget cuts of 28 % in the UK

Radical responses to
municipal budget cuts
of 28% in the UK
Andy Holder
public sector consultant
ahaconsultancy.co.uk
A Christmas card response
Dramatic cuts made by the
Comprehensive Spending Review 2010
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Reducing the public sector generally and local
government specifically by 28% between 2011 and
2014
Differential for different authorities ( grant down by 4
-17% in 2011/12) meaning some immediate cuts of
staff up to 5,000 in our biggest municipalities e.g.
Birmingham
Local Government Association taking cuts of over
30% and early on – e.g. Local Government
Improvement and Development part of the group
cutting about half its staff
‘Necessity is the mother of
invention’
We have to innovate because of:
 Starvation of resources
 Pressure for different policies and approaches
What has been the response?
For over a year we knew it was coming (irrespective of the
Government in power) and municipalities began
preparing by doing two things:
1.
Looking at the radical range of options necessary
2.
Developing leadership style to handle the
complexity and range of change
I want to speak about both
A.
The radical range of
options necessary
ahaconsultancy.co.uk
What options for change are available?
( green levels 1 to 3 will only give 15-20%, more is needed
of blue levels 4, 5)
5
‘Total’ place working
New solutions through putting all partner and
community budgets, people and assets into one
‘place based’ pot
4
Alternative service
provision / prioritisation
Alternative providers and community/users self
managed. Failing these reducing services
3
Organisation wide
transformation
Integrating structures and cultures towards the
customer - ‘standardise’, commissioning and
outsourcing
2
Focused service
improvements
Streamlining systems and processes to focused
outcomes
1
Quick wins
Budgets, staff numbers, stopping non-essentials,
keeping posts vacant
Acknowledgement : Adapted from PWC work
Level 1: Quick wins
These are savings which typically the organisation can
absorb as part of it yearly business planning:
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Annual efficiency pressures of 2 or 3 %pa
Leaving vacancies when staff leave
Cutting ‘extras’ – travel, food and drink, expenses,
Christmas parties!
Level 2: Focused service improvements
These focus on how specific services are delivered:
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Clarifying and simplifying what should be delivered – agree
priorities and outcomes
Using business process re-engineering – ‘end-to-end’
process reviews which deal with:
* actual versus possible timescales
* duplication - less people involved
* faster - right first time responses
* one person responsible end to end
* agree with staff how it could be
reshaped how it could be
* doing it!
Level 3: Organisational wide transformation
This focuses upon ways in which the whole organisation
can work as ‘one’ and with a different culture:
 Integrating the customer responses – in one place or
system and dealing with simple questions by less skilled
staff
 Integrating commissioning/procurement:
*using the skilled central staff to better focus
requirements
*reduce those involved ( but protecting the
skills for defining the services needed)
* widening and using more competitive
markets
Level 4a: Options for service delivery
Options for
service
delivery
Internal
delivery
unit
Contract to
private
company
Partnership
with private
company
Social
enterprise
Mutuals
Joint
delivery
vehicles
Social Enterprises – trust or
community run organisations
A wide variety of types of community owned and run
organisations
Examples;
1.
A range of trusts set up to operate ex-municipal leisure
and sport facilities – to protect the asset and run
services
2.
Community groups taking over the running of village
shops, post offices and pubs! – which would have
closed
Mutuals – Employee ‘owned’
organisations
Co- ownership by the employees who hold the service and
assets for future generations – relying on strong
employee involvement to get superior performance
Examples
1.
Central Surrey Health – since 2005, 770 co-owners
have provided community nursing and therapy services
in homes and hospitals
2.
Government encouraged 12 pilots with mentors from
established mutuals (e.g. John Lewis Partnership) in
health, adult care, children’s services and education
Joint delivery vehicles –
partnership organisations
Shared services across public bodies, with third sector
organisations and the private sector
Examples
1.
Shared ICT, financial, administrative and other
back office services – many examples
2.
Specialist services e.g. library, educational, social
service and engineering expertise – increasing
numbers
3.
Jointly owned delivery vehicles to pool public,
charity and private monies – something difficult in
our system
Level 4: Alternative
provision ( or not)
Reduce
or stop
service
User self
managed
service
Lowering cost
of service
Part or wholly run by
others: public or private
Municipal services
Level 5: ‘Total’ place working
This level focuses on the area or ‘place’ and seeks to:
 pool all the resources ( people, assets/buildings and
money)
 use resources more efficiently ( avoiding duplication and
multiple agencies with one person) and to more focused
service outcomes
 engage the community and customer more –idea of the
big society and the community doing more for itself
B. Leadership styles for the
complexity and range of
change
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What leader’s need to do
For municipal leaders, both politicians and managers, things couldn’t
be more challenging:
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it demands you ‘get on the balcony’ to see what is the whole
picture and what is happening
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it requires you spot and tackle the critical issues ( Heifetz calls
the ‘adaptive challenge) and not get diverted by every emerging
demand.
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it needs you to lead the whole agenda – what is changing ( the
‘change job’) and what must be sustained ( the ‘day job’)
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It needs integrated leadership by political and managerial
leaders
Thinking through cuts and complexity
complicated
complex
chaotic
simple
+
Services:
Commissioning &
enabling delivery
Leadership domains in complexity
REFLECT
COMPLEX
Cause and effect/ unclear known
solutions
COMPLICATED
Multiple causes and effects,
therefore many answers
Use experts to develop new ideas
UNORDERED
ORDERED
CHAOTIC
SIMPLE
Cause and effect impossible to determine
Use action – command and control
to bring in some order and
then work out what is needed
ACT
Clear causes and effects,
available known solutions
Use existing knowledge and
people e.g BPR
Source: D.J.Snowden & M.E.Boone; A Leader’s Framework for Decision Making, HBR, Nov 2007
Leading Innovation
Complex Un-order
Emergent practice
Probe
Sense
Respond
Complicated Order
Good Practice
Sense
Analyse
Respond
Chaotic Un-order
Simple Order
Novel practice
Best Practice
Act
Sense
Respond
Sense
Categorise
Respond
Example of complexity mapping:
Inspection Agency
Complex
Self assessment/ regulation
Savings beyond 30%
Inspecting/ savings on child
minding networks
Peer reviews
Impact of inspection difficult to
determine
Annual judgements on LA
children’s services
Complicated
Organisational change up to the
planned 30% put forward
Cross cutting v silo working
Chaotic
Ways forward on LA children’s
services
Simple
‘Early years’ savings
Lack of clarity about personal futures
A way through complex problems:
Safe-to-fail experiments
1. Generate ideas - diversity and dissent
2. Set out outcomes, project plan, success and failure tests
Experiment 1
Experiment 2
Experiment 3
3. Testing period
4. Assess
& adapt
Success/
amplify
Possible/
reshape
Fail/
recover
Exit
Strategic safe-to-fail experiments
Emerging ‘One Kingston’ themes
Savings
Strategic
Partnering
+
Community
Budgets
Local
First
Health
and
Social
Care
Organisational
Transition
Regular assessment for success/failure and adaptive response
Qualities of an Adaptive Organisation
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Elephants in the room are named – there capacity
for courageous conversations
Responsibility for the organisation’s future is
shared
Independent judgement is expected
Leadership capacity is developed
Reflection and continuous learning is
institutionalised
Adaptive leadership qualities
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Get on the balcony
Identify the adaptive challenges
Regulate distress
Maintain disciplined attention
Give the work back to the people
Protect the voices of leadership from below
Look after themselves