Power: you can’t just give it away! The government is handing down power to a local level, but this raises challenges for the civil service – particularly those directly accountable for how money is spent – if their control over spending is weakened.

The public accounts committee recently raised these issues of accountability; and cabinet secretary Sir Gus O’Donnell responded by asking the permanent secretary of the Department for Communities and Local Government, Sir Bob Kerslake, to lead a working group which is due to report by the summer. “I’m throwing you a curveball,” O’Donnell told Kerslake when setting out his brief. Meanwhile, the role of ministers will change. Politicians will be less able to directly intervene when local services fail, instead allowing local politicians to sort out the problems.

Yet the problem of accountability is just one of many that will be faced as power is devolved from central government to local communities. The civil service is shrinking to become smaller than it has been at any time since World War Two, and the political rhetoric suggests that it will lose many powers to the local level; the nature of its interaction with local and regional government is to fundamentally change.

In order to scope out the potential pitfalls of decentralising power, and to determine appropriate solutions to those challenges, a group of civil servants met at a Civil Service World round table, sponsored by technology company HP, to discuss the role of central government in a world of decentralised public services.

What will central government do now?

The coalition envisages the localisation of much decision-making, and the outsourcing of many delivery operations. So what will be the role of central government? Fiona Spencer, director of shared services at the Home Office, believes that it will be to ensure a minimum level of provision. “At a local level, there are certain things that local people don’t necessarily want to fund, but [which] are quite important,” she said. For example, the funding of mental health treatment is rarely a vote-winner at a local level, and nor is spending on drug addiction treatment. “Your average local person doesn’t want to put more money into funding drug [treatment], which is why government has to force local authorities to spend money on drugs issues,” Spencer said.

One possible solution is for the centre to set minimum standards for councils to achieve in their areas. Hannah Boardman, senior policy adviser in the Cabinet Office, said that “from central government, standards are key”. However, she noted that it will be difficult to strike the right balance between guaranteeing basic services and allowing local authorities to tailor service provision to local needs – a key part of the coalition’s localism agenda.

“One of the biggest issues that we’re going to have as a smaller civil service is how to commission, how to devolve, but still set a standard that ministers are going to say is acceptable,” Boardman explained.

However, central government may struggle to stick to its role as a watchdog. Spencer noted that the centre “very often has a tendency to over-prescribe, to specify down the very last details and spell it all out in a contract” – and it’s a tendency she believes must be overcome. “If government is concerned about making things happen at a local level, then it can’t specify that certain things happen at a certain time,” she said. Civil servants will have to learn to trust people at a local level to achieve common objectives in their own ways.  

To solve this issue, Ann Brownlee, finance team leader at HM Revenue and Customs, said that it’s important that central standards focus on outcomes, not outputs. However, she warned that “it’s going to be very difficult not to fall into the trap of setting a 25-page contract saying how things need to be done, rather than what needs to be achieved.”

Commissioning issues

The government is moving to commission more services from the private and voluntary sectors. And to ensure that services achieve set outcomes without prescribing the ways in which those outcomes are achieved, departments are moving towards the payment-by-results model.

If this model is to work across the public sector, however, central government will have to develop a better understanding of supplier markets. Spencer noted that as well as viewing delivery systems from the government’s point of view, they must also understand them from the market’s point of view. “There’s a lot of focus on pushing functions out there, getting different bodies to take on these functions and deliver them, but I don’t know how far in doing this, anybody’s thinking about the conditions for making this work,” she said. 

Government is also pushing to include more social enterprises and charities in the provision of public service. And here Spencer warned that “unless we’re careful, we could end up with such a dog-eat-dog market out there that a number of these organisations – which government is very keen to promote and have doing more – will in fact go to the wall because [under a particular delivery system] they don’t have a viable financial model.”

James Johns, director of strategy for civil government at HP, suggested that contracts need to ensure that indirect social benefits are measured and considered. This will enable commissioners to have a “balance between well-meaning organisations, and companies that only focus on delivering what’s written in the contract”. He added that “how you define the services that you want to put into a different provisioning body is central to the problem, because if you can’t define them, you can’t work to them”.

Hands off!

Even when government has passed direct control over services to local actors, it will still be tempted to intervene when there is a crisis. Edward Bunting, parliamentary clerk in the Department for Transport, explained that while 98 per cent of England’s roads are gritted by local authorities, ministers in the Department for Transport are always held accountable when there is a problem. Both ministers and civil servants must therefore be prepared to say clearly when responsibility lies elsewhere, he said: “When the tabloids have something on the front page saying: ‘Government gets it wrong again’, then you need to be able to say: ‘No, we didn’t get it wrong. Our agenda is to give away power, it resides in county hall – and if they haven’t chosen to grit your road, talk to your local councillor’,” he said.

Kieran Housden, of the Strategic Development Division of Jobcentre Plus, agreed that central government should be prepared to direct the media towards local authorities. He said that there could potentially be a “critical mass of devolution,” adding that “the instinctive reaction [to a problem] of complaining to Westminster might change. The media’s attention might shift to the local level instead.”

The civil service too will have to step back and say when a problem falls outside its remit, though as Boardman pointed out, this runs counter to civil service instincts. “The approach that has been taken is that if something goes wrong, you immediately stop it happening again. I don’t think that’s the way to handle [failures]; instead, it’s to recognise that risk is there. You need to be prepared for criticism in the short term if you’re going to change the culture in the long term,” she said.

The government’s spending cuts will probably ensure that central government does play a more hands-off role in the future, however. “The centre will not be resourced enough to try and over-control; it won’t have the capacity,” Spencer said.

Transparency and information gathering

One of central government’s key roles will be to ensure that there’s transparency of data – without which local people won’t be empowered to hold local providers to account. Making more information available to the public will help ensure that services are effective, Boardman said: “If we’re going to talk about lots of different providers in a local area, it’s right to give as much information as possible to people.”

However, the head of client development at the Valuation Office Agency, Anna Hutchings, warned that data must be comparable and reliable: “We have overdosed on data in the last decade, and we have to have a valued measure.” Boardman therefore stressed that standardised measurements are required which will enable service users to hold their local authorities to account. “There are some key mechanisms, like school league tables, which measure an awful lot of providers against the same standard,” she said.

Meanwhile, Johns said that certain data shouldn’t be published without qualifying information to explain its context: “It’s not just about publishing data; it’s also about knowing how to interpret information.” He cited the often-raised concern that, for example, publishing raw data might make NHS surgeons reluctant to accept high-risk cases for fear of damaging their performance against targets.

Meanwhile – and running counter to the general theme of decentralising power and accountability – participants noted that the localism agenda hasn’t deterred the Cabinet Office from strengthening central controls over aspects of departmental spending. Boardman commented that it has been gathering data on these aspects of departmental policy, and “the more information we have, the more we can see the perversity of some situations.” The Cabinet Office’s work on reforming public bodies highlighted a huge disparity in quango lease arrangements and other contracts, she said, arguing that more information on departmental performance should be gathered by the centre.

Going forwards

Decentralising power raises a large number of issues for central government; and the civil service, currently undergoing a painful process of cuts, will have to take the opportunity afforded by organisational reforms to reshape itself for its future role. The coalition government envisages many of its powers being devolved, but where these powers end up will depend on legislation –most obviously the Localism Bill, currently passing through Parliament, which will devolve some powers to local communities.

Participants agreed that central government will become more of a commissioner than a deliverer. Therefore, they said, it will need the skills to ensure that problems don’t arise in outcome-oriented, payment-by-results contracts. There was debate on the extent to which it will need to publish data to highlight whether services are failing or successful. But it was broadly agreed that government will need to resist the urge to step in whenever a failure occurs.

Even in a slimmed-down civil service, traditional departmental structures are unlikely to become obsolete. And Johns raised a question that, for a while, stumped other participants: “If commissioning is a more dispersed activity, how can you make sure that the lessons are shared by the centre?” Steve Wreyford, Head of Partnerships at the COI, eventually gave an answer: “Maybe that’s the role of government: to share pockets of good stuff happening in the North East with the South West, making best practice available to others.” In the future central government may no longer be responsible for making sure that things work, but it will still be the best channel for sharing information on how others can step into that role.

Those at the table - and their concluding points

Hannah Boardman, senior policy adviser, public sector work reform, Cabinet Office: “If we’re going to have meaningful and relevant roles in delivering for this new administration, we do need to be less risk-averse. It will be difficult to drive forward significant change, but there is an opportunity to do so right now, and the only way we can jump on board with that is by recognising that there is a different culture to be adopted on risk. You can manage it without avoiding it entirely.”

Ann Brownlee, finance team leader, HM Revenue and Customs: “If we have this hugely more complex delivery landscape, there are skills needed in central government to manage it without controlling it; to do risk management and not risk elimination. That’s not something that can grow overnight.”

Edward Bunting, parliamentary clerk, Department for Transport: “We need to think across departments – transport alongside employment, alongside sense of place.”

Anna Hutchings, head of client development, Valuation Office Agency: “We need to think far more in the localism agenda about how we use our buildings more productively and more economically, so that you’ve got core, flexible space. I think a community needs to run around central places, rather than be fragmented in pockets of different departments. Property, for me, is the central focus of savings.”

James Johns, director of strategy for civil government, HP UK: “A lot of the conversation has talked about things that touch on the IT agenda: we’ve talked about information, best practice, tight-loose standards. 

    “The reflection that I’m left with is that it’s just possible that the way this information technology has developed in recent years, as we move towards cloud-based services and social media and all the other stuff, may be sufficient to support a different business model which runs against the centralised model that we have seen over the last 20 or 30 years.”

Ray Lambe, programme director, businesslink.gov.uk: “My problem is around consumer choice. Service users are important in design, as well as service providers, but how do you get proper representation of service users? Some of the people you ought to be involving don’t even know that they need that service yet. We need to make sure that when things are done locally, [providers consult with] a truly representative sample that agrees that it’s the right thing to do.”

Graham Lay, vice president, civil government, healthcare and transport, HP Enterprise Services UK: “We can implement systems that drag data back to the centre where it can be analysed to make public services more efficient. To implement that, we have to design a business process and then roll it out to all of the organisations that need it.”

Fiona Spencer, director of shared services, Home Office: “We ought to develop some practical models. I’m a great believer in people doing, seeing, learning, building, sharing. I think it would be great if we could develop some examples of the kind of partnership models that embrace a diverse set of providers and provide an overarching model that enables something to be delivered without it being tightly prescribed.”

Steve Wreyford, Head of Partnerships, Central Office of Information: “The more that people get involved in the design and delivery of their services, the better, because we’ve talked a lot about the top-down view but getting people into co-design services is very important.”

Peter Wright, principal scientific adviser and deputy director, Department for Work and Pensions: “I’m probably less convinced that localism is going to happen, listening to the issues that have been raised. But if it were to do so, it would have a huge impact on the [service] providers, and so we need to be realistic about managing that. We could not afford a market failure if this were to take off.”

Written by Joshua Chambers