How Is the Economic Downturn Affecting Decentralized Governments?

[FitzFord]

Subnational governments that are supposed to raise and manage a substantial portion of the resources they need to fulfill their mandates face especially difficult times when there are economic downturns. Their expenditure responsibilities are not only less flexible than central governments', their sources of revenue are less bouyant and any reduction is service delivery are felt immediately and directly by their citizens. The acuteness of this situation is emphasized by the proximity of their constituents to their governments. Political pressure are acute from parents who want improvements in schools, not curtailments of offerings and increased class sizes; health clinics are often in more, not less demand; local roads and water systems that are never fully satisfactory receive less maintenance. Those who work with local governments and local government systems are familiar with these issues and can readily add to this list of woes. Do any of our practitioners have any stories to share of successful strategies of interventions and effective management of these circumstances? The is a large audience out there that would like to hear from you, if you do.

[harnett]

I would say that the key issue here is whether the sources of revenue are less bouyant or not.  If revenues are largely transfers from the centre then the struggle is to protect those transfers - with failure to do so then resulting in a political battle of blame between centre and local governments.  The case of Liverpool in the UK is instructive in this regard - it has already streamlined to such a great extent (winning awards for cost saving in the process) that the current round of cuts which are supposed to be realised through "efficiency gains" have seen the council employ highly respected management consultants independently examine the finances to indicate where efficiencies might be gained.  The conclusion was that the task is next to nigh on impossible!  Result - 22% cuts with frontline services to be seriously affected  http://www.bbc.co.uk/news/uk-england-merseyside-12632017 - but this is quite an easy PR campaign to win as the council and city are not pro government!  But at least any downturn in service delivery will be blamed on the central government rather than the council.

Councils where own source revenues are a high proportion of the total and are in serious decline face a different task: local economic growth which opens up a whole new can of worms.

Do you have a particular case in mind?  is it somewhere you are working?

[FitzFord]

I have no specific case in mind, but I did want to get some kind of assessment of how bad the situation is and what are the range of responses to it.

Most interesting, of course, are innovative approaches to addressing these problems, either by local or central government. The blame game is a historically popular response, and may be contextually politically useful, but rarely result in improving the welfare of constituents. It is good, however, to have a case where the local government is on the right side of performance. That, by itself, is worth recording. Thanks for that response.

What I was particularly hoping to hear about are community based initiatives. I remember when I was a child (in pre-historical times) that local - especially rural -communities would get together to do projects of importance to themselves (eg. minor water supplies, or road improvements, especially drainage) essentially asking the local government to only provide resources like heavy equipment and technical supervision. I wonder if there are modern equivalent examples, especially involving individuals and groups from educated and otherwise well-skilled communities. In my current -semi-rural - community, some families undertake to organise and carry out trash collection along the roads. If they so desire, their names and activites are put on signs along the road. In theory, local governments are well placed by their proximinity to their constituents to elicit, promote and organise such efforts. Few seem to try.

[Napodano]

Fritz,

there is a lot of talk on the UK press on Big Society, a new catch-word by the Coalition Government headed by Cameron. Yet the system is still to be put in full practice.

Attached is a document that spells out the main drivers of Big Society. A useful reference is also at http://www.number10.gov.uk/news/topstorynews/2010/05/big-society-50248

[FitzFord]

This is a very interesting and appealing initiative. I, and I suspect - others interested on local governance, would be interested in knowing more about how this is to be implemented and how it develops. I will follow up and post findings here. I would encourage other readers, especially those of you in Britian, to post updates as well.

Fitz.

[FitzFord]

Here is an interesting link to follow up on the British experiment with a new and extended approach to decentralization.  I will look for commentary in Britain on this initiative to post here, and would invite other participants to do the same.

Fitz.

http://thebigsociety.co.uk/

[harnett]

Yes the Big Society is an interesting intiative but in the context of Britain it is also controversial in that in some quarters it is seen as an attempt to reduce local government costs on the cheap.  What's more it is likely that any resulting local intiatives will emanate from the richer local councils, again.  An interesting take on the Big Society is given by the New Economics Foundation which looks at 10 key questions one of which states:

Are we all up to the challenge?

"Understanding that people have assets, not just problems, is a good start.  But not everyone has the same capacity to help themselves and others.  How much capacity we have depends on a range of factors. These include education and income, family circumstances and environment, knowledge, confidence and a sense of self-efficacy, available time and energy, and access to the places where decisions are taken and things get done. All are distributed unequally among individuals, groups and localities.  A combination of social and economic forces, working across and between generations, result in some having much more and others much less. While these inequalities persist, people who have least will benefit least from the transfer of power and responsibility, while those with higher stocks of social and economic resources will be better placed to seize the new opportunities. Many of those who are currently poorest and least powerful are at risk of being systematically excluded from any benefits that arise, in spite of the Prime Minister’s declared intention that no-one should be ‘left behind’.

A major conclusion is that "The Big Society idea is strong on empowerment but weak on equality."

Check out this link for more...   http://www.neweconomics.org/articles/ten-big-questions-about-the-big-society-html

[FitzFord]

The comments by harnett in the last post are very important and pertinent. It points to a general weekness in the design of many systems, governmental/governance and otherwise. For systems to work effectively, money and even powers conveyed are not enough. Institutional issues, including those of unequal and inadequate capacities, tend to have more impact and determine more outcomes than are generally recognized. What continues to be disappointing is, that despite innumerable examples of these failures, little attention is usually paid to the institutional design elements of systems, including decentralization.

Fitz.

[John Short]

Big Society While Paper published today.

High-quality public services are the right of everyone. The Open Public Services White Paper sets out how the Government will improve public services. By putting choice and control in the hands of individuals and neighbourhoods, public services will become more responsive to peoples’ needs.
The White Paper sets out the government’s approach to public services by applying five key principles:
•   Choice – wherever possible we will increase choice
•   Decentralisation – Power should be decentralised to the lowest appropriate level
•   Diversity – Public services should be open to a range of providers
•   Fairness – We will ensure fair access to public services
•   Accountability – Public services should be accountable to users and taxpayers.
The White Paper will be followed over the summer by a wide-ranging discussion with individuals, communities, public sector staff, providers and others with an interest in how public services are delivered. We want to hear from the views of everyone working in and using public services about how it can turn its vision for high quality, efficient and modern public services into reality.

http://www.cabinetoffice.gov.uk/sites/default/files/resources/open-public-services-white-paper.pdf

Here is an individual  local government’s view of how the big society will work for it.

The 'White Paper' below is the Royal Borough of Windsor and Maidenhead's definition of Big Society. The White Paper should be viewed as an 'open source policy document'. That is, an initial attempt to define what the Big Society means to the Royal Borough but one that we would like contributions to in shaping that definition. As such, we are interested in people's views regarding the Big Society and specifically, our initial attempts both to define it and to offer a set of projects that will make up our programme around this area. This is a deliberate attempt to do things differently - to encourage comments regarding this initial thinking that will help shape both the policy and programme.

http://www.rbwm.gov.uk/web/consultation_big_society_white_paper.htm