Friday, 30 March 2012

ONS Data - Trends in Local Government Confirmed.

For a while now I've been banging on about the future of local government. Being involved with an authority at the time it entered an outsourcing deal with Capita whilst simultaneously looking to jettison leisure centres, road maintenance and street lighting I saw a trend which would leading to a new kind of organisation appearing.

What I saw was a kind of 'slimeline' local authority not dissimilar to a what has been perhaps more fashionably referred to as a 'virtual council.' This organisation consists of a rump of professionals primarily concerned with the functions of strategic management, contracting and enforcement.

Strategic management and contracting are in many ways combined and if anything these areas will grow in our new local authority. Contracting involves the business of drawing-up, tendering as well as administering contracts on a day-to-day issue-by-issue basis whilst strategic management involves the setting of the over-arching priorities for outsourced departments and providing a link with elected officials.

'Enforcement' includes functions, such as environmental health, licencing and planning. These areas stay under the umbrella of the Local Authority due to the conflicts of interest which would clearly be present if they were carried out by a contractor. Also included is high-end social work. I say high-end meaning not routine work such as assessing for meals-on-wheels, day care, or even home care, but work such as safeguarding investigations and dealing with more complex cases as well as children's services which require the involvement of qualified social workers. This will stay in-house for two reasons; firstly the strength of the profession, but most importantly it is the sensitive nature of these activities which would make it politically problematic to outsource them.  

Outside these areas everything is up for grabs. Medium to long-term all authorities are heading towards this new model in various stages. It is also a process of one-way drift as bringing services back 'in-house' would prove costly and infinitely complex as whole sections have been handed over to the private sector along with all the systems, experience and knowledge they encompass. Unless this were handed back the cost alone would be prohibitive in many cases.

But what evidence is there of this? Much of it so far has been simply been anecdotal. My experiences of being up-close to this process and having the opportunity to ask questions on the inside have given me a sense of what is happening, but still this is in one area.

The latest ONS data on public/private sector earnings however has provided some clear evidence of this process. In their analysis they find that making a straight comparison of median earnings by sector is difficult as the skill levels are different.

Over time the public sector has outsourced some jobs to the private sector. While some of this
outsourcing has involved contracting out higher skill jobs to the private sector, for example,
Information Technology (IT) support, much of the outsourcing that has occurred has been in lower skilled jobs, for example, cleaning. The result of this outsourcing has been to take many of the low skilled jobs that would have been carried out in the public sector and transfer them to the private sector.

This is of course a finding which is highly consistent with the 'streamline' hypothesis. If the trend is for local government, or indeed the public sector in general, is to recede to this professional rump then this is what we would expect to see - a higher concentration of high-skilled 'professionals.'

Anyone fancy funding a PHD?

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