New models required for demand management says RSA

Council finance officers need new financial and investment models to help create demand management solutions, according to a new report.
Produced by the Royal Society for the encouragement of Arts, Manufactures and Commerce, the study claims that strategies for demand management could help save £5 billion of council spending.
However, it warned that, despite the potential, current attempts to make such interventions are only operating on a small scale.
The report said: “We think that there is a particular challenge related to creating financial and investment models to enable commissioners to invest in a range of demand management strategies, particularly early intervention…
“A small number of councils are working together through the Early Intervention Foundation to build new models, but we think it likely that more work is needed in this area. The implications for the skills needed within local authorities, including financial modelling, and the changing roles of local authority accountants and heads of finance also need to be considered.”
Part of the RSA’s research examined whether local factors, outside of the control of local authorities, such as deprivation levels, constrained their ability to make savings through demand management.
But it concluded: “The results suggested that this is not the case: there appears to be no relationship between local variables and the performance of councils in reablement.”
According to the authors, demand management is an emerging science, but techniques currently include ‘nudge’ approaches, where small changes encourage service users to make more efficient choices.
Other areas include analysis of service users and applying behavioural insights in areas like recycling, littering, school transport, adoption and democratic engagement.
The report said that demand management required a “fundamental cultural shift, away from public services as delivery agents of one-size-fits all services to a passive population, to localities in which everyone ‘does their bit’, and services and outcomes are shaped by active, independent and resilient citizens”.
It listed examples of council leaders and chief executives who temporarily suspended street cleaning in parts of their boroughs as a way of alerting residents to the pressures that littering puts on public services.
And it also pointed to examples of measures to build social networks to enable members of the community to help each other, such as a ‘Casserole Club’ matching people needing food with people willing to cook and deliver an extra portion of their daily meal.
The report said: “In projects such as these, the state’s role is about providing the platform for social connection, rather than directly providing a service to respond to need.”
In addition, the authors said that building “whole place” budgets and involving citizens in the shaping of delivery models could also help reduce demand.
The research was carried out in partnership with the Economic and Social Research Council, the Local Government Agency, management consultancy Impower and London South Bank University.