Risk and Regulation at a local level

Risk and Regulation at a local level 12 March 2013 Judith Smyth OPM jsmyth@opmassociates.co.uk

Local regulation in the UK • My thesis is that there is some local regulation and risk management at local government level in the UK and that this could increase considerably in the next few years- depending on central government politics and local government energy • This provides an excellent opportunity for citizen and service user involvement in regulation, inspection and scrutiny • And is crucially dependent on clear governance and accountability in a multi layered system

Current public policy in the UK • Localism • NHS reforms • Budget cuts • Co – production • Outsourcing • Payment by results • Personalisation and individual budgets • Reduction in centralised regulation including targets • Sector led improvement - LGA

Role of local government? • Defined in statute • Now includes general competence and duty to lead locally • Social value act However it is still worth asking whether or not Local Government is simply an agent of central government? Despite • Council tax • Locally elected leaders • Varied local situations requiring local response

Local government provides (itself, with or through others) both ‘place’ and ‘people’ • Services for children, including education, and for vulnerable adults • Public health and reduction in crime and disorder • Local roads and public transport • Rubbish collection and recycling • Homelessness services and social housing • Town and country planning, building regulations, licensing, environmental health

Is this regulation? • Much relies on nationally established rules enforced locally • And on regulation and accreditation elsewhere (schools, care homes) • Some on the employment of professionals • And as councils move to be local commissioners i.e. make local decisions about how best to deploy reducing public resources they need to monitor system performance and regulate local service providers and partners themselves….

Pressure for change – not only £ cuts • The major strategic challenges for local government are reforming the relationship between local public services, service users and citizens, reviving the economy and reducing carbon footprint • ‘salamis slicing’ is not enough – whole system reform is necessary in most service areas • this requires good leadership to redesign and re commission whole systems rather than providing traditional ‘services’ • for example services for children and vulnerable adults….

Better lives for vulnerable people: Co-production ORGANISATIONS SERVICE USERS Public sector SOCIAL CAPITAL Individual Contracted Private Sector Communities Children, vulnerable adults, elderly and Peer Groups Voluntary Organisations Private Sector - shops, jobs, finance, housing and their Families Source: ‘Coproduction in Children’s Services’, Clive Miller and Sue Stirling, OPM, 2004

What is commissioning? • Understand. Plan, Do, Review – the familiar cycle • The activities and processes that lead to decisions about how best to use public money • Good commissioning is needs led, outcome focussed, uses evidence of what works, takes into account the views of stakeholders including service users, includes Local policy and must do standards, contestability (sometimes competition and outsourcing) • In this context commissioning is about change, leading to improvement of outcomes and efficiency (sometimes competition and outsourcing). • Performance management of contracts – working with service providers to improve outcomes/reduce risk

Why does Commissioning work? Its success lies in commissioners ability to be a powerful agent of change through a simple, clear and transferable commissioning approach. A simple process - that makes the most of all the resources/assets in a locality INPUTS OUTPUTS ACTIVITIES OUTCOMES A simple definition - Commissioning is the process for deciding how to use the total resource available in order to improve outcomes in the most efficient, effective, equitable and sustainable way

A new job for local government members (elected) and of partnerships such as the new Health and well being boards? Integrated leadership and governance served by a corporate commissioning team driving change, focus on impact on outcomes not on process, light touch regulation involving service users; clear delegation of responsibility - e.g personal budgets (see www.kids) Local ‘standards’ – must do for all providers (transparency, good governance, service user involvement, minimum wage, local economy, carbon reduction, limit top salaries?) Commissioning policy – market management - how you will relate to service providers (agreed attitude to outsourcing, use of council buildings and back office. cooperative councils?) Agreed strategy – a plan for change Good governance (stakeholder informed) is increasingly important in the absence of central government control and regulation INPUTS OUTPUTS ACTIVITIES OUTCOMES

Vision of an effective system working well to improve the well being and prosperity of the place The hard part – and why well led commissioning is important The reality is that most public service systems are far too complicated, difficult to understand, therefore hard to commission improvements Moving beyond an accretion of projects, programmes, work streams, pilots and initiatives To a well understood and clear system focussed on outcomes for whole population, groups of people with particular needs, the economy and environment And more efficient with less wasteful internal transaction costs – fewer meetings?

Barriers to change There are many barriers to change including: • Poor strategic and political leadership • Too many pilots/projects, programmes, meetings and performance indicators – a distraction from whole system reform • Lack of understanding about commissioning among people at all levels of the system so that there is confusion about roles and functions • Poor understanding of the cost and value of services especially those provided within the local authority • Poor governance including understanding, managing and reducing risk

Improving the governance of both commissioners and service providers locally Would help us to • Improve accountability for the right use of public resources locally • Involve citizens and service users in regulation and scrutiny more effectively • Develop and maintain clear contracts between different parts of the system • Focus on impact on outcomes rather than on tick box process • Understand where the buck stops

Good Governance standards for public services • Public services including those run by for profit business and not for profit and or mutual organisations and by local and national government • Published after research with nearly 500,000 people involved in public governance in the UK showed how inadequate the understanding and practice of governance was • By OPM, CIPFA and JRF and available on all these websites – e.g www.opm.co.uk

Engaging stakeholders and making accountability real Promoting values for the whole Organisation and demonstrating good governance through behaviour Performing effectively in clearly defined functions and roles Focusing on the organisation’s purpose and on outcomes for citizens and users Taking informed, transparent decisions and managing risk Developing the Capacity and capability of the governance team to be effective

Six core principles of good governance 1. Good governance means focusing on the organisation’s purpose and on outcomes for citizens and users. 2. Good governance means performing effectively in clearly defined functions and roles. 3. Good governance means promoting values for the whole organisation and demonstrating the values of good governance through behaviour.

4. Taking informed transparent decisions and managing risks 5.Engaging stakeholders and making accountability real 6. Developing the capacity and capability of the governance team to be effective (Good Governance for public services OPM, JRF, CIPFA www.opm.co.uk)

Risk and Regulation at a local level