A 1% productivity gain in social care and SEND will dwarf the savings from local government reorganisation

Blogpost co-authored by Mark Lloyd and Jeremy Cooper

There is an £18bn opportunity at the centre of local government reorganisation (LGR).

This week 21 areas (covering 40 upper tier councils and 23 million residents) were formally invited to submit suggestions of how to restructure – ending the county-district two-tier arrangements – in a generational shake up of local government.

In our regular discussions with council chief executives and senior officers, the ‘devolution revolution’ is the topic that is dominating discussions, even for those with less direct impact. The multiple permutations of the new two-tier structure, including new/bigger/different Strategic Authorities as well as LGR, mean almost all will see either direct impact, or at least distracting discussions.

There is lots of brokering and analysing to do, both for the 21 March initial deadline and the November full proposal deadline. This is going to take up the vast majority of focus for leaders and chief executives and their senior teams.

There are big opportunities from this agenda, but also some risks. The Ministry of Housing, Communities and Local Government (MHCLG) is aware of this. A little phrase in the invitation letter caught our attention in particular:

“…consideration should be given to the impacts for crucial services such as social care, children’s services, SEND and homelessness…”

We wholeheartedly agree with this, but being honest, we are concerned about whether there will be space for sufficient consideration.

The directly impacted councils spend over £18bn on adult social care (£9bn), children’s services (£5bn) and SEND (£4bn) alone.

In previous rounds of reorganisation, these vital services have typically been underplayed in the planning, with a strong focus instead on a ’safe-landing’ on day one for new councils, with promises to drive service integration and transformation in the subsequent months and years.

As we look back on previous rounds of LGR, it’s a mixed picture regarding the delivery of promised future gains.

There is a big opportunity and risk:

The opportunity to think creatively about what reorganisation could mean for these core services deserves a close look.

A 1% productivity improvement would be £180m which might far outweigh the ‘efficiencies’ from management post reductions and other ‘back-office’ savings.

Challenges include:

• What opportunities does closer alignment with other public service footprints (integrated care systems, police and crime boundaries, hospital catchment areas)?
• What role could a Strategic Authority play in public service join-up and reform?
• Are there any innovative shared service models that haven’t been tried at different spatial levels that could help address the unevenness between need and service provision?
• How to ensure new councils start with best-in-class outcomes and productivity?

Amongst the risks, arguably the biggest is distraction. Speaking to areas who have previously gone through LGR, it is a common view that these core services can get limited focus before and in the first years of reorganisation.

Each of these core services have major transformation expected – from Casey’s adult social care review to imminent SEND reform. Councils involved in LGR are going to have to fight hard to find the bandwidth to deliver the changes required.

Taking eyes off these core services through LGR planning and transition could bankrupt predecessor councils before we even get to the launch of the new council.

If you share our concern about fully investigating the opportunities for core services through reorganisation and keeping enough focus on core services through planning and transition, please do get in touch as we would love to encourage and support you.