First published by Local Government Chronicle on 3/7/18 (link)

Despite the temptation, we should not begrudge the NHS in getting its new settlement, but instead consider where we as local authorities now stand.

The Treasury has raised the drawbridge on funding, lest anyone thinks more riches are to be found. The department doesn’t refer to Brexit dividends, but makes clear taxes will rise to pay for the settlement, which we know has disquieted some MPs. An interesting November Budget debate lies ahead, hopefully to include the promised social care green paper.

Meanwhile, the pressures on council budgets increase. It is not just adult social care, which faces even more intense pressure due to demographic changes. The volatility in children’s service budgets is even more dramatic. Being more efficient and innovative than central government has not seen local government repaid with generosity, but an expectation that even more is possible. When we talk to colleagues we know this is not sustainable.

In 2017-18 Northamptonshire CC was an outlier in its crisis, but for 2018-19 or 2019-20 it may not be. Even if the social care green paper leads to more cash, it won’t arrive soon. And repairing – most likely partially – one element of the budget will not balance the books. Much has been made of the former health department’s name change reflecting the importance of health and care integration. That is welcome, but more than a name change is required to persuade Whitehall and NHS England that “social care” is not just about elderly people in and out of hospital. Younger adults require social care in non-acute settings, and children’s social care – long someone else’s departmental responsibility – deserves equal attention in every sense.

When we think about integration it is hard to avoid the primary requirement, still mostly unmet, for the NHS to integrate itself. The apparent softening of the commissioner/provider split is promising, but there is a long way to go. Similarly, the new funding settlement will no doubt carry conditions for reform and efficiency. Excuse the cynicism, but we’ve heard it all before and not seen any evidence.

The Local Government Association conference gives an opportunity to reflect on future strategies. Here are three initial thoughts to stimulate debate.

First, the lesson of the last decade is that good local governance has been built on a strong relationship between leader and chief executive. Discussions can be robust in private, while in public there is unity. Now we need to reinforce the roles of the statutory officers to report more fully and openly on the financial challenges. Our collective and local reputations depend on there being no more surprises. We need this openness internally and externally. Chief executives need to speak about the ‘place pound’ – what’s being spent by the public sector in our area. And if the NHS does have more resources, that means a new engagement with the sustainability and transformation plan and integrated care system rollout: an engagement based on partnership, not diktat. There are real opportunities for local leadership, particularly at member level. We three are sufficiently long in the tooth to remember the last time there was a sustained squeeze on local government finances. To become a chief executive it was almost obligatory to have a finance background. Yet this time the squeeze has seen finance directors downgraded. We should reflect on why and how this happened, but without doubt we need more financial skills in our top teams.

Second, let us voluntarily raise the bar on expectations of audit. The dismal performance on some high profile private sector cases is likely to lead to significant new responsibilities on auditors. Indeed, the whole audit profession could be about to undergo profound changes, of a scale no one would have predicted even a couple of years ago. We should collectively encourage auditors to use their public interest responsibilities to comment on governance and the sustainability of decisions. Public audit has always had a value for money element, but that needs to be more robust and it must be interwoven with more explicit commentary on financial planning.

Third, let us review opportunities for leader and lead member discussions with peers. The LGA conference is only one opportunity. The calendar of events needs a refresh because we have neglected investment in lead members for finance and resources. Their status is as important as that of the director. We call on others to join us in addressing this imbalance. Everything we have learnt tells us their relationship is crucial when in the background public priorities for spend will usually see roads outweigh social care.

Taken together, these three will not solve our problems, but they will give us a better chance of doing so.

Joe Simpson, Director, Leadership Centre;

John Sinnott, Chief Executive, Leicestershire CC;

Rob Whiteman, Chief Executive, Cipfa

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