A Conservative Local Government response to the recession


An Overview to the booklet: Rising to the Challenge: A Conservative Local Government response to the recession

Published by the leadership centre for Local government June 2009

Let’s leave it to an expert commentator. According to Daniel Finklestein, Chief Leader writer of the Times this country is insolvent. Out of money. Financially embarrassed. Strapped. Cleaned out. We are skint, borassic lint, Larry Flynt, lamb and mint. We are lamentably low on loot. We are maxed out. We are indebted, encumbered, in hock, in the hole. We are broke, hearts of oak, coals and coke. It doesn’t matter whether money can buy us love, because we haven’t got any.

Welcome to the era of no money” (The Times 11 March 2009).

The era of no money demands a different style of politics. Of course we have been here before. Last year I was talking to a Chief Executive of a London Conservative controlled borough about what seemed then to be a lamentable tight grant settlement for the coming year. Musing gently he said “it will be alright because I am long enough in the tooth to have seen it all before in the late 70s and early 80’s; but most of my staff have not – they have been used to the financial boom years”.

The recession is throwing up challenges on all fronts. Not only will there be less money to satisfy the electorate’s inflated expectations and to cope with the effect of the recession as it falls on different sectors of the economy and society but officials in towns and city halls up and down the country will have to learn new behaviours and adopt new ideas to work in a financially stricken economy. As the Conservative Party has a comfortable majority in local government, thanks to the Labour Government’s naïve handling of the national economy, the music has stopped with Conservative administration up and down the country holding the parcel of restraint.

This booklet is about showing how Conservatives leaders from different backgrounds are rising to the challenge. John Atkinson, Managing Director of the Leadership Centre, in his pithy piece describes it as “ in a time of uncertainty, when everyone is looking for something solid to cling to, there be also the opportunity to reshape and redirect our public services to a new and radically more effective pattern. But to do so requires great courage, an openness to think differently and a determination to succeed in the face of adversity. Put simply, now is the moment for local political leaders to define a different way forward from a decade of centrally imposed policy, controls and measurement. Now is the moment for great local leadership”.

Recessions bring many openings as they do endings. History proves that they are watersheds. Undoubtedly for many people this recession is a time of loss, uncertainty and finality of dreams but for others it will present new opportunities, a revaluation leading to a birth of new ideas. As always in a time of change, often rapid change, there is a need for careful navigation. As elected representatives Conservative councillors have been entrusted to be those navigators. The Rt Hon Kenneth Clark MP, Shadow Secretary for Business, Enterprise and Regularity Reform, says, it is the task of elected Conservative councillors to do what they can to mitigate the worst effects of the recession on their on local economies”. This will “demand personal energy, vigilance and attention to detail.” He stresses the importance of getting the fundamentals right to survive the recession Local authorities need to look ahead so that when the recovery comes, which it surely will, it will be the areas that have the best infrastructure, the best schools and the best welfare system that will draw a skilled and ambitious work force”.

Cllr Mike Freer, Conservative Leader of the London Borough of Barnet points out there is not much new for London authorities in having no money. He writes “Barnet’s consistently poor grant settlements year on year means that we are versed than most, I suspect, at staring into the financial abyss trying to figure out how we will do more for less, whilst ensuring excellence is maintained”.

Cllr Stephen Greenhalgh Conservative Leader of Hammersmith and Fulham since 2006 warns against repeating mistakes of the past of the spend, spend, spend approach to tackling the recession”. In Hammersmith and Fulham his administration by putting “value for money at the heart of everything we do we have to have managed to improve services while cutting council tax by 3% in each of the last three years”. Their reward, apart from gaining the best rating in the CPA of 4 star/improving strongly, is to see resident’s satisfaction levels rise from 11% to 64%. Cllr Greenhalgh is clear, the way of achieving economic steadiness is to cut costs and eradicate waste so avoiding a cycle of boom and bust.

For Cllr Merrick Cockell Conservative Leader in Kensington and Chelsea, the difficult economic times calls for “approaching familiar problems in a different way”. Taking a step further from freezing council tax, Kensington and Chelsea is adopting the more radical move of returning £50 to their taxpayers. This is more than a gesture – it is part of co-coordinated plan to stimulate the local economy. Residents will be encouraged to shop locally. Parking charges on Saturdays in April will be suspended to encourage the retail fight back.

Freezing parking charges is also part of Barnet’s response to the recession. Cllr Freer writes of how Barnet’s approach operates at both the micro level, what he calls the “traditional response from local authorities”, and more significantly at the macro level. In Barnet frugality is driving innovation demonstrated in the council’s report The Future Shape of the Council and the Barnet’s Financing Plan or the Barnet Bond. The former aims to reshape the council by “unprecedented structural changes” so that it becomes a commissioning hub while the Barnet bond develops a structural investment plan that aims to “ensure a measure of self sufficiency, greater efficiency and commerciality within the borough”. Barnet’s response exhibits the targeted and practical as well as radical.

Targeting support if one of the key principles of Westminster’s answer to the economic crisis. Councillor Brian Connell, Westminster City Council’s cabinet member for Economic Development, shows that Westminster’s plan is a mixture of immediate practical answers and the long-term measures. The Council has two themes, which they apply to both their short term and long-term thinking. “Doing less with more”and “targeted support”. Doing less with more means delivering greater efficiency and eliminating over spending: targeting support means making sure that key sectors of the borough such as families at risk and its business community get the creative and decisive support they need.

Outside London Cllr Peter Jones, Leader of Conservative controlled East Sussex, is also working at the practical while thinking of “more imaginative solutions”. These involve “meeting the disappearance of credit facilities for individual and businesses”. Their initiatives in East Sussex involve funding local credit unions to ensure that there is affordable credit for families “who might otherwise fall into the clutches of the loan sharks”; investing in a new fund to subscribe for new corporate bond issues by FTSE 350 companies and in the longer term looking, with neighbouring Conservative administrations, to establish a credit union or bank to serve the business sector. Echoing Kenneth Clark, Peter Jones sees providing the means for business to trade is key to getting “ready for an eventual recovery in the economy”.

In rural Lincolnshire three districts, are working together to cut costs by extending the principles of shared working into new areas. Boston Borough Council (an Independent administration), East Linsdey District Council (Conservative led coalition) and South Holland District Council (Conservative administration) have established that there are “real benefits” in merging finance, human resources, revenue and benefits, customer services, and ICT. What is important to them, according to Gary Porter, Conservative Leader of South Holland, is that each authority had to be able to respond to the need of its own citizens and retain it own distinctiveness. For them “merged and shared services are not to be the same as homogeneous services” but by making savings from their back office budgets they are able to keep their ability to respond to their public services and thereby help shape the future of service delivery in Lincolnshire.

Cllr Malcolm Grimston a Conservative IDeA peer offers a different perspective to the challenge of the recession. Having worked in many types of council Cllr Grimston has noted that generally councillors have become over occupied with “the managerial nature” of politics. He hopes that the recession will offer the opportunity to review the fundamentals of political vision. This he contests should be about more than managerial practise but should stimulate community values and people’s emotional considerations. He notes that however well meaning was the creation of the welfare state, it has encouraged people to look to the state for answers to their social problems rather than take personal responsibility themselves. This in turn has dissipated community ties. He admits that there are no easy answers. But he feels the opportunity thrown out by the recession “to take a long hard look at where recent policies have improved life and where they might be re thought”.

It is left to the non-politician of the booklet’s contributors to home in on the role of the Government. As a retailer, Simon Wolfson, Chief Executive of Next, is familiar with the need to cut costs but “saving money does not mean cutting critical services”. He reminds us that Government’s job is not to be the world’s best employer and warns that unnecessary jobs in the public sector drains money from the private economy and destroys productive jobs elsewhere. His call is for a change in attitude and culture from Government and it agencies. As in business, so it should be in Government, let people manages and trust them to do so. Too much Government interference by inspection and regulation stifles initiative. Government’s job both nationally and locally should be to help the economy make money not hinder it.

It is an attitude Bob Neill MP, Shadow Minister for Local Government says a future Conservative Government will adopt. The Conservative Green Paper “Control Shifts: Returning Power to Local Communities” aims to boost local democracy by decentralizing power, restoring incentives, removing undemocratic regional government so that “power is returned to locally elected representatives”. His promise on behalf on the Conservative Communities and Local Government front bench team is “to free local authorities from Government control, giving them the opportunity to innovate and the ability to secure the long term prosperity of their communities”.

All the booklet’s contributors agree on one simple point: to stand still is not an option. Those councils who are prepared to think radically, to pull on the levels of economic good management and to innovate will be the ones who will best be able to navigate through the stormy waters of the recession to benefit their electorate. Conservatism is an essentially practical and non-doctrinal philosophy. Instinctively hostile to the notion of one size fits all Conservatism lends itself to a localist approach. As this booklet demonstrates there are many ways which Conservative Leaders are rising to the challenge of the era of no money. They differ in detail but the overall approach is the same– they are seizing the opportunity to do their best for their electorate.