Aidan Dunn: Councils become economic drivers in partnership with the private sector
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Suffolk County Council has become a commissioning council but, Aidan Dunn argues, that means recognising the council’s primary role is now about being an economic driver to facilitate business and housing growth.
The model of local government is currently being turned on its head. By 2020 we will stop receiving a government grant and instead we are expected to be self funding. Any money we wish to spend on the vulnerable will have to be “earned” through council tax and through retaining business rates.
And all this comes while the demand for services is growing and budgets are falling. So our challenge is how do we adapt our mindset and facilitate sustainable growth?
Internal
The first thing we have done is to reshape ourselves as a commissioning council. And over the last five years we have slimmed the council through a combination of outsourcing and divestment. External suppliers now account for 75% of our budget.
During the same period headcount at Suffolk has also been cut from 9,500 to 5,000 staff, and we have set up 12 different companies ranging from a housing company through to one providing services for schools.
Some of those companies have been established to generate dividends for us and are doing very well. Others were set up to provide service improvements and flexibility. Some of these companies are in competition with the private sector. At the same time we have also outsourced some major services, including our highways services and care homes.
However, we are not ideological about it. At the same time as outsourcing services, we insourced our back office, ending the contract we had with BT for the provision of finance, human resource and information technology.
As we turned ourselves into a “commissioning” organisation we also recognised we needed to be better at contract management — we need to make sure we receive the services we pay for. This has not historically been our strong point.
So, over the last six months we have put 125 staff through an intensive two-day commercial training course. These are not skills which we have traditionally recruited for, but we recognise that we need them in our 21st Century public managers. We need our people to be more business-like in their thinking.
External
What about our relationships with the private sector, and other public sector partners?
At a strategic level a good relationship with our local enterprise partnerships has helped bridge the gap between public and private sector and certainly, during the Suffolk and Norfolk devolution discussions, New Anglia LEP was invaluable in translating between, and bringing together, the public and private sector worlds.
This legacy is something that we’re currently building on to develop Suffolk’s response to the government’s industrial strategy. We see that as an opportunity to showcase our economic strengths, but also demonstrate how local partners across sectors are credible influencers that can work with government to facilitate growth.
In terms of our relationships with other public sector partners, it is austerity which defines the public sector’s operating context so we need to respond accordingly.
Budget gaps and funding crises are very real for the public sector so we need to be clear on how best to galvanise and utilise the assets, levers and influence we have. For example, Suffolk County Council recently agreed its 2017-18 budget, which is just under half a billion pounds; combined with other public sector spend this represents close to £2bn — a significant financial input into our county.
Contact
So, the role of local government is no longer just about providing services to the vulnerable; our primary role is now about being an economic driver to facilitate business and housing growth, to generate income, in order to support the vulnerable.
It is through our procurement and commissioning activity that we interface with the private sector. But we are increasingly outcome focused, and want to work with partners to find solutions to problems that don’t typically rely on council funding.
To that end we are looking for innovation.
When we do spend money with suppliers we want it to go into our local economy to stimulate growth. What this means is we want to work together with public and private sector partners.
We are now committed to much earlier market engagement for our larger procurements, to understand the state of the market to work with partners and to encourage innovation.
Suffolk has become better at gathering market intelligence, and predicting future demand and market conditions.
We are seeking to use the Social Value Act to maximise the return of every pound we spend to benefit Suffolk
And Suffolk has become increasingly involved in market management and stimulation. Our interventions include identifying and filling skills shortages, introducing competition to stimulate the market and introducing technology to disrupt the market.
But to bring me back to my opening point. Working with the private sector to encourage innovation, isn’t just about the economy but also improving the wider wellbeing of local people. There is an interdependent relationship between sustainable economic growth and sustainable communities and this is at the centre of our approach to delivering 21st century public services.
Thriving economies support thriving communities, and thriving communities support thriving economies: we want and need both
This is a complex and fascinating area. Demographic, technological, economic and global political change mean that models of delivery — not simply for the public sector but private and voluntary sectors too — are being challenged and are changing.
To be successful in meeting this challenge, local authorities and the private sector need to develop better ways of working together.
Aidan Dunn is assistant director strategic finance and head of procurement at Suffolk County Council.
