Wednesday, September 16, 2009

How to cut public spending: lessons from Wandsworth

Wandsworth Council is the pride and joy of the Tories. They have controlled it for more than three decades, it delivers highly rated services with relatively low council tax. And, interestingly, there is a lot that lefties can learn from Wandsworth about good ways to reduce public spending without harming services.

There was a good interview with Cllr Edward Lister, Wandsworth's leader, on Conservative Home. Here's some of the key points that he mentions (and one that slipped his mind) :

*Consistency of political leadership, with a team approach which involves all councillors, not just those at the top.

*Understanding what local people want, and focusing on delivering it.

*Outsourcing packages should be almost invariably kept to single services to allow effective control. Even some single services (e.g. IT Services) need to be spilt up to retain sufficient control. Big blocks (e.g. Departments) just don’t work, and they have rarely found that combining two large contracts for different services gave them saving.

*Effective management of staff, and pay in the upper quartile wherever possible, to make staff feel valued and motivated to “go the extra mile”.

*Many of the services are delivered in house, where the council has won the contract by being able to compete on a level playing field against other providers.

*They rarely use consultants and reserve them only for technical areas where they do not have the relevant expertise.

*They keep a very tight rein on resources put into partnership and inter-authority networking which often adds nothing for local residents: even though the discussions held are interesting, real decisions can be quite rare. (They also avoid providing many discretionary services which most other local authorities provide to their residents if they can possibly avoid it).

*They do not use PFI out of preference, as it carries high cost overheads for the legal and accountancy input. There is also a high level of abortive bidding work that all contractors are inevitably faced with, which therefore ends up as a further cost overhead as it is loaded onto prices for successful bids. A PFI approach also greatly delays procurement and of course generally incurs higher borrowing costs.

There is a lot here which lefties could support and which is rather surprising to see in a Tory flagship authority - deliberately high pay for public sector workers, small contracts with close monitoring by the local authority rather than hiving off large areas en bloc to the private sector, low spending on consultants and none on PFI.

One thing which this highlights is that one massive area of savings comes from looking at the amount of money that the public sector gives to the private sector in return for services. To take just one example, the Department for Work and Pensions has given the company A4e so much money, in the kinds of massive contracts that Wandsworth found didn't work, that A4e's founder is a multi-millionaire who owns a massive mansion. Should so much public money to help people get jobs really be finding its way into the pockets of millionaires?

The other thing to remember about Wandsworth, which Cllr Lister didn't have time to mention for some reason, is that, shall we say, they are not solely responsible for their success. Just as many 'self made men' in fact owe their success to one government service or another, Wandsworth has benefited from absolutely colossal amounts of support from the central government. Maggie Thatcher gave them millions to keep the Poll Tax down and be a flagship authority, and under Labour they've benefited from high levels of funding for London authorities.

The Wandsworth Council which Tory activists praise as an example of how all local councils should work is the same Wandsworth Council which wouldn't have been able to do half of what it has managed without thirty years of strong and constant support from central government. You don't get high quality services at a low cost without lots of help from the government.


At 8:29 am , Blogger Letters From A Tory said...

I hope that PFI bites the dust along with the Labour government at the next election, as it represents one of the greatest covert abuses of public spending I have ever seen.

At 11:15 am , Blogger Unknown said...

Of course, it's also worth noting that Wandsworth imposed some pretty brutal and swinging cuts on all sorts of areas ranging from housing through to shutting down all the SEN schools and more recently closing all the museums, galleries and as many libraries as they could get away with.

They also took all the extra money the govt put in that was ring fenced for education, and then refused to spend it on education.

Still, an interesting perspective on how to improve efficiency...

At 8:10 pm , Anonymous ad said...

under Labour they've benefited from high levels of funding for London authorities.

Presumably every London authority has benefitted from that. What have the rest of them being doing wrong?

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