Now Suffolk county council is taking an even more radical approach to public sector reform by proposing a "virtual" authority that outsources all but a handful of its services.
The Tory-controlled county's "new strategic direction", set for approval tomorrow, could see virtually every service outsourced to social enterprises or companies. The aim is to turn the authority from one which provides public services itself, to an "enabling" council, which only commissions them. The council hopes offloading services could shave 30% off its £1.1bn budget, as part of the government's drive to reduce the fiscal deficit.
Although councils have outsourced chunks of their services before, these proposals are regarded by experts as the first time a local authority has considered not directly providing any services at all.
Services would be offloaded in stages. While some "early adopter" services could be outsourced as early as this autumn, the rest would be divested in three phases from April 2011. Libraries, youth clubs, highway services, independent living centres, careers advice, children's centres, registrars, country parks and a records office are among the first services that could be divested.
Ultimately only a few hundred people could remain directly employed by the council, primarily in contract management. At present, the council employs around 27,000 people, 15,000 of whom work in education, which is set to be taken away from local authority control as the government converts schools to academies and free schools. Many of the remaining 12,000 could face either redundancy or be transferred to a social enterprise or the private sector.
As Timmy says, if we can save taxpayers 30% of £1.1 billion and provide services that are as good (or, hopefully, better) then this productivity leap is an excellent thing.
A 30% increase in efficiency, in productivity? Who wouldn’t want that?
Well, OK, maybe the people being made 30% more efficient aren’t going to be all that happy about it but then just as we don’t and shouldn’t run the market side of the economy for the benefit of companies but for consumers so we shouldn’t be running the public services for the providers but for the consumers.
And for the consumers the same or better at 30% off is a wondrous deal.
Naturally, the unions are up in arms—no doubt the leader of the local Unison branch is basically watching her revenue-target bonus melt away into the aether. But I would imagine that not having to deal with the unions—which are not only a pain in the ring but artificially inflate wages—was a definite positive factor in Suffolk county council's calculations.
The move also raises fears about the quality and extent of services in poorer areas. "There are areas in Ipswich and Lowestoft that are among the 10% most deprived areas of the country. In these areas things like libraries and children's centres will fall by the wayside because there won't be the ability to attract the voluntary help," said Martin [, a Labour councillor].
That might, of course, be an indication that libraries and children's centres are not particularly important to the people of Ipswitch and Lowestoft, although I would imagine that the colossal amounts of paperwork, administration, CRB checks, etc. that voluntary workers would require will also not help.
Anyway, as Timmy also says, we don't know if this plan is actually workable.
I don’t know whether this is going to work, you don’t, the council doesn’t and nor do the unions.
True. But we can look at roughly similar plans and see how they panned out. And, in the case of Maywood, in the US, it has gone pretty well.
Despite the public money it saved, the outsourcing project was highly controversial. When it was announced, residents feared anarchy would follow; old people thought they would be mugged in the streets; local storekeepers wondered if anyone who would stop them from being robbed; families presumed parks and libraries would close. "You have single-handedly destroyed this city," the about-to-be-sacked city treasurer told council members, during the acrimonious meeting where the outsourcing scheme was unveiled.
One month on, however, the naysayers have gone quiet. Maywood's parks are still open and greener than ever. The leisure centre is overflowing with excited children. City Hall appears to be running smoothly. And almost everyone you meet says that since the city outsourced everything, services have improved and petty crime and gang violence have – on the surface, at least – virtually disappeared.
"I don't see gangsters on the streets any more," said Maria Garciaparra, bringing her children to the library. "I don't see new graffiti. I still have a park for them to play in and this place to get books, so who cares whether the city employs anyone or not? If this works, then down the line, I'm sure plenty of other places will copy it."