22 Public Finance ■ March 21—27 2008

Feature

Uncertainty, anxiety and all-out turf wars havecharacterised life in English councils affected by localgovernment reorganisation in the past year. And yet,come April 1, 2009, brand spanking new unitary au-thorities are expected to swing into action in Bedford-shire, Cheshire, Durham and Northumberland, fol-lowed by Cornwall, Shropshire and Wiltshire thefollowing April.

This means that, in little more than two years, 44district and county councils will be expected to havemerged into nine new corporate entities, completewith coherent cultures, visions, identities and, mostimportantly, services delivered seamlessly andefficiently to more than 3 million people.

Unsuccessful bids for unitary status in Exeter,Ipswich and Norwich are also being re-examined.

The infinitely complex reorganisation process willbe especially tough in places where fierce battles haveraged and staff morale is inevitably low. There is muchto do and little time to do it, with elections for the firstshadow authorities taking place in May.

Meanwhile, Bedfordshire County Council is still op-posing local government minister John Healey’s an-nouncement on March 6 that the county is to be splitinto two unitaries – one for Bedford and one for therest of the county area. The new authorities, however,are expected to be in place by April 2009 and electionsheld the following month.

In personnel terms, most frontline jobs will stillexist and operational staff will be told where to reporton changeover day, but their terms and conditionsneed to be harmonised. The chief executives of the newunitaries will be appointed after open competitions.

There is likely to be a painful culling of senior andmiddle management posts as departments are merged.On a practical level, assets need to be transferred, ITcompatibility addressed, new logos and insigniaordered and contractual arrangements overhauled.

Above all, as the new unitaries emerge from theashes of old counties and districts, members and offi-cers will need to keep their eyes on the ball of frontlineservice delivery. If handled carefully, reorganisation isan opportunity to reconfigure services in ways that aremore coherent, cost-effective and meaningful to localpeople.

I cut my managerial teeth during the reorganisation

in Scotland in the mid-1990s, as an officer involved inwinding down Strathclyde, the largest council inEurope at the time, and setting up South LanarkshireCouncil. The first consultation began in Scotland in1991 and on April 1, 1996, nine regions, three islandcouncils and 53 districts became 32 unitary authori-ties. South Lanarkshire – with 307,000 residents and15,000 employees – was created by joining five author-ities, with different IT systems, contract arrangementsand staff terms and conditions.

Our strategic focus was on developing a corporateculture of communication, consultation and continu-ous improvement. Our practical focus was on propertymanagement, facilities management and demo-graphic planning. The result was to create a stream-lined departmental structure, introduce one-stopshops and customer relationship management

Piecing it allto

Over the next two years, nine new English unitary authorities

will be created out of 44 existing district and county councils.

Paul O’Brien discusses how to take the pain out of the process

Insecurity,factionalismand tensionsare bound toemerge asotherscompete for jobs

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23Public Finance ■ March 21—27 2008

systems that were, at the time, innovative and raised£1m to reinvest in frontline services. I saw first handthe rivalry and stress such a process engenders andlearned lessons that have stayed with me ever since.

The first lesson was the importance of good commu-nications. If you do not communicate, the rumour millwill do it instead. Unions are vital to the whole processand should be involved at every step with staff transfersand the uncertainty these bring. As staff terms and con-ditions will need to be harmonised, this is a good timeto ensure equal pay is implemented across theamalgamating authorities as early as possible.

During local government reorganisation in Scot-land, training and support were provided to help staffmake the most of opportunities arising. A staff commis-sion was set to up to establish ground rules and safe-guard the interests of employees. In my view, it is a mis-take for England not to have such recourse to anindependent national body for when disputes arise.

There are bound to be casualties as old councils arewound down and new ones established. Older officersmay relish the chance of early retirement, but insecu-rity, factionalism and tensions are bound to emerge asothers compete for jobs.

Some surplus fat on the bones of the organisationsinvolved will be required as there will be massivehuman resources and procurement issues to deal with,all requiring experienced managers. A mix-and-matchapproach of fixed-term contracts, temporary contracts,temporary promotion, delayed retirement and officersworking in dual posts will all be needed to maintain‘business as usual’ on one level and spearheadmonumental corporate change on another.

Officers coming from districts with limited func-tions will have a chance to expand into new roles anddevelop new skills. Chief executives of smaller authori-ties who lose out in the race for top jobs might findthemselves appointed to executive directors’ posts inthe unitaries, at equivalent salary and status levels.

Reorganisation is a chance to deliver services in away that is built around users’ needs and is easier forthe public to understand. New service configurationscan join things up more coherently, for example, bring-ing waste collection and disposal under one body.

The local press is a potential enemy or ally in gettingmessages across. Good communications could makethis a unique opportunity to bring staff and public onboard in designing services from the front line, harnessthe energy and ideas of the workforce and involve localpeople. Poor communications could turn the wholeprocess into a fiasco and give new authorities a badreputation before they even start.

The tight timetable means it will not be possible tohave everything structurally perfect on day one; andthis might prove too painful in human resourcesterms. In South Lanarkshire, for example, we startedwith 15 directorates, which were cut to five eventually,and went from 140 heads of service to 50. The internalprocess can be evolutionary, what is important ispresenting seamless services to local residents.

The Department for Communities and Local Gov-ernment estimates that the nine initial unitaries willachieve savings of £108m a year. More coherentservice configuration, leaner management structuresand economies of scale will all contribute to costefficiency. It remains to be seen, however, whetherthese savings emerge fully, as there are ever-changingpressures on councils and ambitious efficiencysavings targets to meet.

There will also be costs setting up the new authoritiesand in potential redundancy payments to some in theoutgoing bodies. Negotiating changes to outsourcedcontracts or buying out of them altogether could alsoprove to be expensive.

But reorganisation should not just be a cost-cuttingexercise but a chance to reinvest any savings in frontlineservices. Developing effective asset management strate-gies and maximising procurement opportunities will beparamount.

With a million and one things to do in reorganisingauthorities, it is unrealistic to expect them to be sub-ject to a new performance regime, and, for this reason,DCLG should place a moratorium on ComprehensiveArea Assessments for new authorities in their first fullyear of operation.

The reality is that time is limited and the complexityof the process will inevitably entail some aspects ofcompromise. One thing that cannot be compromised,however, is excellent services for some 3 million peoplewhose councils are being reorganised.

● Paul O’Brien is chief executive of the Association for Public ServiceExcellence

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Shrink to fit: those mergers in full

Bedfordshire1 county council + 3 district councils = 2 unitary councils

Cheshire1 county council + 6 district councils = 2 unitary councils

Cornwall1 county council + 6 district councils = 1 unitary council

Durham1 county council + 7 district councils = 1 unitary council

Northumberland1 county council + 6 district councils = 1 unitary council

Shropshire1 county council + 5 district councils = 1 unitary council

Wiltshire1 county council + 4 district councils = 1 unitary council

Total 44 9Source: Apse

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