Message to public sector: think of the consequences of cuts

Right across the public sector, senior executives and officials are being forced to make cuts to their expenditure. Services are being stopped, others severely re-modelled, some rationed and others re-designed. Inevitably, people and communities – often the most disadvantaged – are being adversely hit by these cuts and changes. Long term and wholesale damage is being inflicted on communities, individuals and on society itself.

Incredibly, most of the planned cuts are yet to be implemented. And still more are forecast following the general election.

There is a strong argument that the next government must adopt an anti-austerity, re-distributive and expansionist programme based on public investment and expenditure on critical services, and support for communities and individuals. Indeed, I have made this argument in New Start before. However, I also realise that until this or a new government changes course, there will be further cuts. Therefore, it is vital that those making the decisions adopt a strategic and values-based approach.

Let’s consider what this could mean for local government.

Politicians must be accountable for the social, economic

and environmental consequences of all of their decisions.

It starts with political leadership adopting clear values-based objectives for their authority (based on wide consultation) and, based on these values and objectives, developing a set of criteria against which to evaluate any proposed cuts. These could be based on a desire to address poverty, protect the most vulnerable, support local businesses and economic growth, and maintain a strong civil society. Every council will make its own choice and strike an appropriate local balance between these objectives. However, the criteria and basis for their selections should be widely shared with stakeholders, including local residents and businesses. Councillors, especially leaders, should be held accountable for their adherence to their own stated values and objectives.

When public bodies are considering new investment, they produce detailed business cases and undertake copious analysis of the impact, costs and potential consequences of the proposal. Perversely, however, such a rigorous and strategic approach is (in my experience) very rare when decisions are being made about making cuts; and where there is any consideration of the impact, all too often it is superficial. This practice must change – and it must do so rapidly, and comprehensively.

Without such considerations, there is too great a possibility of unintended consequences. I have witnessed councils take decisions that undermine their stated policies: a classic example would be a council committed to addressing poverty and low pay which decides to outsource a service on the basis that it expects the contractor to cut terms and conditions of the staff.

Another example is a council committed to supporting local small voluntary organisations and small businesses, but letting contracts for goods and services that only large organisations (and probably only global companies) can bid for. These are abject failures of ‘joined-up’ government, strategic leadership – and quite frankly, basic common sense.

Yet this need not be. Politicians must be accountable for the social, economic and environmental consequences of all of their decisions. They must know what these short and long term consequences are likely to be. They should consider all their expenditure and check its impact against values-based objectives.

Therefore, I urge councils, and indeed other public bodies faced with the unpleasant task of having to face deep cuts to:

• Recognise their long term stewardship of public resources and wellbeing, and avoid being short-termist
• Always base decisions on values, stated objectives and the public interest (not self or vested interests), and be clear about priorities
• Evaluate proposals against a set of criteria as described earlier in this article, and publish the results of this evaluation
• Evaluate the potential short and longer term financial, social, economic and environmental impact of their proposals, including those for other sectors and agencies
• Involve service users, the voluntary sector, staff, trade unions and other local public sector and business partners in a rigorous evaluation process, and the identification of alternative options
• Measure the impact of decisions once taken and test these against the pre-decision evaluation results – and ensure that where there are discrepancies, the lessons are understood
• Seek to pool resources and budget planning with other local public sector agencies to ensure that all available resources are used to maximise impact
• Be transparent about what is planned and why
• Use local government scrutiny panels and others to challenge and assess impact

Ideally, public bodies will already know how effective their services and allocation of resources and finance are. This is important if a genuine, values-based strategic approach is to be adopted. It is necessary to know against what criteria you are considering a new proposal. It is also critical to know what others have done, why, and to what end.

Finally, the public sector has to be fully accountable to the public. Accordingly, when facing budget pressures, there is an absolute need for honesty and transparency with the public (including service users, staff and partners) about the reasons for proposed cuts, the available options and the expected and actual impact of cuts.

Such an approach offers less damage than ill-considered cutting and could trigger a more serious debate and demand for a progressive approach to macro-economics and underlying political choices.

The public sector, and in particular national and local government, should never make cuts without first understanding, and then sharing, this understanding of the consequences.