Published Jan 12, 2023 inBusiness Transformation

Two transformations that could contribute to modern local government

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By B T

Head of local government services at Prospect Law. Expert at stabilising and improving troubled services and repairing failures in governance. Non-exec director for local authority trading companies.

It isn't clear what public service system we'll have in twenty years' time.

But it clearly won't be the one we've got now!

A health service conceived almost 80 years ago designed for a completely different population.

Local government that hasn't changed much since the 1970s, apart from some consolidation and the end of the GLC.

A lot of people are generating good ideas about more efficient ways of working.

Tilting the balance towards prevention where possible.

Invigorating local economies with public services and businesses working methodically to build social capital, strong communities, deep pools of skills and flexible ways of doing business.

Michael Gove is accelerating the creation of combined authorities.

Larger entities that could begin to take advantage of the opportunities that scale economies present, perhaps with fewer barriers to collaboration than we have got used to in local government.

So can we begin to think about building or acquiring operational assets, like we used to have?

If local authorities owned the care homes from which they bought beds, there would be less leakage of cash to private shareholders - even if the care homes continued to be operated independently. Given the margins required by Private Equity owners in this sector, even at today's interest rates a business case could work.

And could we also begin to look at owning a greater percentage of our own supply chain? What if large groups of councils (or the pension funds they are custodians of) didn't just buy back office services but joint ventured with the service companies to develop bespoke ventures that shared risk and reward?

This has taken off in facilities management, but it could apply to more services.

Local government can't go on adjusting its last model to continually tighter funding. It needs to change its character and purpose, and that won't come about through a top-down 'reorganisation'. We have to see the changes that are being driven by central government and deep economic and social drivers as opportunities for fresh thinking.

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