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Four futures for local government

08 February 2013

By Jonathan Flowers, local government market director at Capita plc and director of Veredus

You can view the full paper here - this is a summary.

Austerity will be an issue for councils for years to come. To address the needs of communities in the long term we need to think about what local government will look like in the future.

We have constructed four possible futures for local government and its partners based on two competing tensions. 

Firstly, will we see:

  • Much more localism, driven by devolved budgets, a resurgence of parish councils and more active communities; OR
  • Greater centralisation as a result of the unwavering strength of Whitehall departments, and public distaste for an unequal "postcode lottery" in public services;

Secondly will we find that:

  • Local government is granted more responsibility with public health services and other community needs handed over to their management; OR
  • Council activities and responsibilities gradually nibbled away, as academies and free schools flourish and universal credit and personalisation gives citizens more control over their incomes, for example.

Put these dimensions into a grid and we get four, albeit extreme, futures to consider.

Four futures diagram

In a "delivery for place" future, by 2022 local government's ability to deliver through strong health and wellbeing boards and good police and crime commissioner relationships have been recognised. More power and control has been given to local authorities to achieve savings by integrating local public services. In exchange, however, the government is specific about the centrally-set targets to achieve.

Under this model, authorities become the head office for a local public service conglomerate. They will be driving local value, but fiercely accountable for results. Ministerial heads won't roll – it will be leaders or chief executives who fall. Great councils will be good at complex performance management and lobbying national government.

Or we may find that current localist trends continue. Councils are well-positioned to shape and influence a network of local provision from volunteers, charities, local and national business. Costs will decrease as cheaper providers come forward and resources are targeted more precisely. Although councils will shrink, as work is done elsewhere their influence will increase. This future is called "smaller spider, bigger web".

Councils may not be at the centre of a localist web, however, particularly if they are unable to add value locally. If community groups and social enterprises thrive and obtain resource from national agencies, national resources will shift directly to the local suppliers. If free schools are seen as effective, this may accelerate a view that councils aren't needed and could result in more cuts. We may end up with a "local government bypass". Successful councils will be the ones who can bid for work in competition against other local providers.

In our final future, local government virtually puts itself out of business by reducing costs so well it loses capacity to engage with changing national agendas, and new initiatives are tendered to national charities or businesses. In this "national commissioning" world, high profile failures by some authorities lead to a call for a central takeover of services. Cost is driven out by economies of scale and competition. Even here, the councils that have positioned themselves as national providers of services will survive.

Although further austerity is certain, we face many unknowns. Local government needs flexibility as never before – adaptable systems, active and supported councillors and a commercial outlook to managing supply relationships. None of these futures will ever occur in the extreme form described, but elements will. Successful councils will have already looked 10 years ahead and faced all possible futures to develop the capabilities they need.

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