The Local State We're In 2019
How can local public services work together to create inclusive places?
Against an uncertain and changing backdrop, place leaders have an opportunity to reconsider their economic strategies, their position in the global economy and their role in delivering a fair and inclusive future. This means local public service leaders need to focus on taking a holistic approach to growth, supporting community resilience and improving the experience of residents, visitors and business.
Councils realise the importance of place-based transformation, with 94% agreeing that place leadership is important. However, many are not translating this priority into strategy or delivery, and significant barriers remain, including unaligned incentives (64%) and a siloed approach from central government (81%).
Our local government survey shows that austerity has put councils under pressure, with short term concerns about financial viability too often overriding their ambitions to support inclusive growth, embrace the opportunity technology offers, and create thriving communities and places.
“We need to think about our place - not as a council but as a public leadership system. How can we continuously improve our place for all those who live, work or visit, creating equality of opportunity and outcomes? To do this leaders across the public sector need to come together and humbly lead for a common and not corporate purpose.”
Local State We’re In: Our key findings
We surveyed local authority Chief Executives, Directors and elected Council Leaders across the United Kingdom from March - May 2019. Our key findings are largely focused on the following areas:
Supporting inclusive growth
Creating investor-ready and liveable places, and delivering inclusive growth, must be at the heart of Local Industrial Strategies. As organisations come together to develop and deliver their Local Industrial Strategies, it is paramount that they focus on building a credible economic evidence-base, so that they can engage widely with stakeholders to create a compelling and tangible vision and strategy.
Almost nine in ten (87%) say supporting economic and productivity growth is the primary purpose of their vision or strategy for place, with respondents saying housing and skills are the top priorities for growth, followed by transport and inward investment. On the other hand, these priorities are reflected in what are seen as the main barriers to local growth, with chief executives and leaders feeling that lack of investment in infrastructure (70%), lack of affordable or suitable housing (63%) and lack of influence over skills policy (56%) are holding their places back.
Brexit
With uncertainty over the timing and outcome of Brexit, less than half (43%) of our survey respondents say they feel prepared as a council for the potential outcomes of Brexit. While half (50%) agree that Brexit will impact the funding they receive, three quarters (74%) are not confident that central government will engage with cities and local government in reshaping regional investment and regeneration funds in a post-EU landscape. Chief executives and leaders are taking their own actions to ensure their places are ready for Brexit, with almost one in five (18%) proactively going abroad on a city-to-city basis to find investment and develop trading links, up from 12% in 2018.
“Less than half (43%) of our survey respondents say they feel prepared as a council for the potential outcomes of Brexit.”
Reforming public services
Successful public service reform starts with thinking about the citizen and the community and the outcomes you want to achieve. This means moving beyond integrating individual services or collaboratively addressing single issues.
Over half (55%) of council respondents agreed that councils should be more responsible for facilitating outcomes rather than delivering service solutions. Almost the same (50%) say they fully understand how to measure outcomes and assess the impact they have. However, only 29% agree that they fully understand the cost of securing outcomes on a multi-organisations basis across their area.
When it comes to outcomes, 80% agree health and social care integration will have a positive impact on health outcomes. However, only 25% agree that integration will deliver savings for their council and only 19% say incentives are well aligned across health and social care. Thinking about how things might be, 57% agree there should be a single budget for each local health, social care and public health economy.
“To be effective, transformation needs to focus on individual and community needs and not organisational or professional needs.”
“Cultural differences and financial challenges mean the focus from some partners is not on improving outcomes for residents but on complicated organisational forms of delivery.”
Embracing digital and data
Councils must embrace a ‘digital mindset’ in terms of how they approach the opportunity digital and data offer to transform how they operate and change the terms of engagement with the public.
Almost seven in ten agree that their organisation puts customer experience first, yet 80% are not embracing new technology and only 40% of the public are satisfied with the digital access they have to council services.
When it comes to cyber, two thirds of councils are confident that their approach to digital security will cope with cyber threats, yet only 40% of the public trust their council with their data. Regarding artificial intelligence (AI), four in ten say they have plans to introduce AI into their organisation in the next three years, while another 36% say they have introduced limited AI already. Less than three in ten are confident about their data analytics capabilities, with 68% not using data to inform decision-making.
Building organisational resilience and capability
Given sustained financial pressures, while there is no shortage of ambition, resource and capability constraints loom large on the minds of council leaders. The ongoing impact of austerity is evident with just half (53%) of council respondents to our survey remaining confident of delivering savings in the next year without impacting on quality of service or outcomes. That’s down from 72% last year and a high of 94% in 2012. Only a third (33%) are confident that they can make the savings needed in the next five years, although 93% say that they expect some councils to get into a serious financial crisis during that period.
“The uncertainty around the future funding of local public services is leading to an inability to plan for the medium- to long-term. Our funding scenarios range from a £5m-£30m shortfall depending on outcomes of Fair Funding and Comprehensive Spending Review.”
Agenda for Action
With uncertainty over the Spending Review and the Fair Funding Review, councils need to grasp the levers they have control over to future-proof themselves. New ways of working means different capabilities are needed, with a greater emphasis on skills around influencing, enabling and convening, underpinned by data analytics and evidence.
For local public services, there are five key areas organisations should focus on to deliver successful places where people want to live, visit, work and invest:
- Define a shared vision for your place, and then translate this ambition into strategies, that bring together numerous partnerships, are clear on accountability and underpinned by an integrated plan to deliver - start to integrate the integrations;
- Focus on growing and nurturing relationships with people and communities on their terms, to build resilience and independence;
- Develop a ‘digital mindset’, harnessing new technologies such as AI to deliver better outcomes;
- Embrace the value of data and invest in an analytics capability to inform decision-making and drive smarter, earlier interventions;
- Focus on building the right leadership skills and capabilities for new ways of working based on collaboration, innovation and relationships.
"Councils have proved their ability to deal with significant demands in the past decade, but the greatest challenges may yet be to come. Councils, and their partners, will need to continue to adapt, innovate and collaborate as they look to 2020 and beyond.”
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Health Industries and Devolved and Local Government Advisory Leader, PwC United Kingdom
Tel: +44 (0)7791 114593
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