1. ahaconsultancy.co.uk Radical responses to municipal budget cuts of 28% in the UK Andy Holder public sector consultant

2. A Christmas card response

3. Dramatic cuts made by the Comprehensive Spending Review 2010 Reducing the public sector generally and local government specifically by 28% between 2011 and 2014 Differential for different authorities ( grant down by 4 -17% in 2011/12) meaning some immediate cuts of staff up to 5,000 in our biggest municipalities e.g. Birmingham Local Government Association taking cuts of over 30% and early on – e.g. Local Government Improvement and Development part of the group cutting about half its staff

4. ‘Necessity is the mother of invention’ We have to innovate because of: Starvation of resources Pressure for different policies and approaches

5. What has been the response? For over a year we knew it was coming (irrespective of the Government in power) and municipalities began preparing by doing two things: 1. Looking at the radical range of options necessary 2. Developing leadership style to handle the complexity and range of change I want to speak about both

6. ahaconsultancy.co.uk A.The radical range of options necessary

7. What options for change are available? ( green levels 1 to 3 will only give 15-20%, more is needed of blue levels 4, 5) 5 ‘Total’ place working New solutions through putting all partner and community budgets, people and assets into one ‘place based’ pot 4 Alternative service provision / prioritisation Alternative providers and community/users self managed. Failing these reducing services 3 Organisation wide transformation Integrating structures and cultures towards the customer - ‘standardise’, commissioning and outsourcing 2 Focused service improvements Streamlining systems and processes to focused outcomes 1 Quick wins Budgets, staff numbers, stopping non-essentials, keeping posts vacant Acknowledgement : Adapted from PWC work

8. Level 1: Quick wins These are savings which typically the organisation can absorb as part of it yearly business planning: Annual efficiency pressures of 2 or 3 %pa Leaving vacancies when staff leave Cutting ‘extras’ – travel, food and drink, expenses, Christmas parties!

9. Level 2: Focused service improvements These focus on how specific services are delivered: Clarifying and simplifying what should be delivered – agree priorities and outcomes Using business process re-engineering – ‘end-to-end’ process reviews which deal with: * actual versus possible timescales * duplication - less people involved * faster - right first time responses * one person responsible end to end * agree with staff how it could be reshaped how it could be * doing it!

10. Level 3: Organisational wide transformation This focuses upon ways in which the whole organisation can work as ‘one’ and with a different culture: Integrating the customer responses – in one place or system and dealing with simple questions by less skilled staff Integrating commissioning/procurement: *using the skilled central staff to better focus requirements *reduce those involved ( but protecting the skills for defining the services needed) * widening and using more competitive markets

11. Level 4a: Options for service delivery Options for service delivery Internal delivery unit Contract to private company Partnership with private company Social enterprise Mutuals Joint delivery vehicles

12. Social Enterprises – trust or community run organisations A wide variety of types of community owned and run organisations Examples; 1. A range of trusts set up to operate ex-municipal leisure and sport facilities – to protect the asset and run services 2. Community groups taking over the running of village shops, post offices and pubs! – which would have closed

13. Mutuals – Employee ‘owned’ organisations Co- ownership by the employees who hold the service and assets for future generations – relying on strong employee involvement to get superior performance Examples 1. Central Surrey Health – since 2005, 770 co-owners have provided community nursing and therapy services in homes and hospitals 2. Government encouraged 12 pilots with mentors from established mutuals (e.g. John Lewis Partnership) in health, adult care, children’s services and education

14. Joint delivery vehicles – partnership organisations Shared services across public bodies, with third sector organisations and the private sector Examples 1. Shared ICT, financial, administrative and other back office services – many examples 2. Specialist services e.g. library, educational, social service and engineering expertise – increasing numbers 3. Jointly owned delivery vehicles to pool public, charity and private monies – something difficult in our system

15. Level 4: Alternative provision ( or not) Reduce or stop service User self managed service Part or wholly run by others: public or private Municipal services Lowering cost of service

16. Level 5: ‘Total’ place working This level focuses on the area or ‘place’ and seeks to: pool all the resources ( people, assets/buildings and money) use resources more efficiently ( avoiding duplication and multiple agencies with one person) and to more focused service outcomes engage the community and customer more –idea of the big society and the community doing more for itself

17. ahaconsultancy.co.uk B. Leadership styles for the complexity and range of change

18. What leader’s need to do For municipal leaders, both politicians and managers, things couldn’t be more challenging: it demands you ‘get on the balcony’ to see what is the whole picture and what is happening it requires you spot and tackle the critical issues ( Heifetz calls the ‘adaptive challenge) and not get diverted by every emerging demand. it needs you to lead the whole agenda – what is changing ( the ‘change job’) and what must be sustained ( the ‘day job’) It needs integrated leadership by political and managerial leaders

19. Thinking through cuts and complexity simple complicated chaotic complex + Services: Commissioning & enabling delivery

20. Leadership domains in complexity REFLECT UNORDERED ORDERED ACT COMPLICATED Multiple causes and effects, therefore many answers Use experts to develop new ideas COMPLEX Cause and effect/ unclear known solutions CHAOTIC Clear causes and effects, available known solutions Use existing knowledge and people e.g BPR SIMPLE Cause and effect impossible to determine Use action – command and control to bring in some order and then work out what is needed Source: D.J.Snowden & M.E.Boone; A Leader’s Framework for Decision Making, HBR, Nov 2007

21. Leading Innovation Simple Order Best Practice Complicated Order Good Practice Complex Un-order Emergent practice Chaotic Un-order Novel practice Sense Categorise Respond SenseAnalyseRespond Probe Sense Respond Act Sense Respond

22. Example of complexity mapping: Inspection Agency Complex Self assessment/ regulation Savings beyond 30% Inspecting/ savings on child minding networks Peer reviews Impact of inspection difficult to determine Annual judgements on LA children’s services Complicated Organisational change up to the planned 30% put forward Cross cutting v silo working Lack of clarity about personal futures Chaotic Ways forward on LA children’s services Simple ‘Early years’ savings

23. A way through complex problems: Safe-to-fail experiments Experiment 1Experiment 2Experiment 3 4. Assess & adapt 2. Set out outcomes, project plan, success and failure tests 3. Testing period Fail/ recover Success/ amplify Possible/ reshape Exit 1. Generate ideas - diversity and dissent

24. Strategic safe-to-fail experiments Local First Community Budgets Strategic Partnering + SavingsHealth and Social Care Emerging ‘One Kingston’ themes Organisational Transition Regular assessment for success/failure and adaptive response

25. Qualities of an Adaptive Organisation Elephants in the room are named – there capacity for courageous conversations Responsibility for the organisation’s future is shared Independent judgement is expected Leadership capacity is developed Reflection and continuous learning is institutionalised

26. Adaptive leadership qualities Get on the balcony Identify the adaptive challenges Regulate distress Maintain disciplined attention Give the work back to the people Protect the voices of leadership from below Look after themselves