The Future of Local Organisational Structures

Recently published in the MJ

Up to now the structure of authorities has been largely prescribed by statute or convention.  Although there is more variety at District Level, top-tier authorities have remarkably common structures, often driven by the existence of certain statutory roles, not least the Director of Children’s Services.

That is already beginning to change.  Joint appointments with Health, eg where the Director of Adult Social care may also be the Chief Executive of the PCT, shared chief executives, and some authorities with a combined DCS/Adult Services role … all of these are starting to demonstrate variety.

Local Government will soon be faced with genuine choices about how it organises – not just within the local authority, but also how its “local public service conglomerate” will organise.  Some localities will be successful in drawing down resources and responsibilities previously managed centrally.  Shared services – both front and back office – will roll out with very many different models.

The Private Sector has faced the challenge of considerable variety in how conglomerates organise for decades.  Whilst comparisons with the Private Sector only work up to a point, there are tools and concepts that exist there that seem relevant to us.  One such is the so-called “Parenting Advantage” by Goold and Campbell.  This concept invites organisations to be very precise about the value that is added by each upper layer of hierarchy, and postulates different models of organisation, arguing that the model needs to be aligned with the industry and the market context.

Total Place and the apparatus that goes with it appears to be encouraging further local consolidation, creating local public sector conglomerates which will need to be structured and managed, and it is possible to envisage health, councils, and policing coming closer together – just as social care, highways, and schools have been, under the local authority umbrella.  This poses a fascinating question of where the “Centre” is in the public sector conglomerate.  Councils are put into a primus inter pares position by virtue of their democratic accountability, but are they resourced for a wider role, and can you really run a conglomerate from one of its operating divisions?

At the same time the rhetoric, and for some councils an emerging reality, is one of extreme delegation to micro-localities – “you have a budget, spend it as you wish on your local priorities”.  This is associated with a highly unstrategic conglomerate model.  Schools, for example, are told that they are autonomous with their own budgets, which is fine, but very different from the conglomerate model implied by the reporting regime, and different again from the conglomerate model underlying the children’s trust agenda which is at the highest level of parenting advantage sophistication.

The reason why this matters is because the Goold and Campbell insights show that there is no ”best” model as such.  However businesses which use the model most appropriate to their industry and circumstances do better.  And a model is about much more than structures – it is about information flows, people development, the role of the Centre, the culture of the organisation, and how performance is managed.  These all need to be aligned with each other, and with the model for the organisation.  Conflicting models will cause problems which need to be managed, especially if they all exist within the same conglomerate.

The public sector faces complexities and interdependencies undreamt of by corporate strategists.  The “Parenting Advantage” model is not right for the public sector, but it serves as a starting point and encourages us to realise that we are allowed to think about this and to make deliberate choices.  Moreover, we must.  There is a new book to be written, and the next decade will write it.