Total Place – Total Success?: Accounting & Business

Posted on September 21, 2010 · Posted in Accounting & Business

 

Joining-up public services has been a holy grail of public policy since the Labour government was merely a Labour opposition.  Yet the intervening years of government hectoring, performance targets and constant restructuring of public bodies has always seemed to offer more hope than actuality when it comes to abolishing the public service silos.

 

But, just as it seems as if one administration is to be replaced by another, could it be that the right path has now been found?  Many observers are confident that Total Place will achieve far more than all the many programmes and initiatives seeking joined-up government that went before.  Timing, of course, is everything.  And when it comes to achieving efficiency savings, there has never been a better time.

 

Two years ago the Treasury published an operational efficiency review produced by Sir Michael (soon to be Lord) Bichard, a former permanent secretary at the Department for Education and Employment, chief executive of the Benefits Agency, chief executive of two local authorities and now executive director of the Institute for Government.

 

Bichard proposed what might be regarded as a truly radical set of proposals, or, you might think, the plain obvious.  Public service delivery should be seen from the perspective of the locality and the service user, not through the prism of the agency that delivers the service.  Along with various proposals to strengthen local partnership working and rationalise performance targets, Sir Michael recommended the creation of Total Place.

 

The following summer, Total Place was underway, with the then newly appointed communities secretary John Denham enthusiastically approving some 13 Total Place pilot schemes that have now conducted initial mapping exercises.  These have surveyed the extent of local public service spending and considered how the service delivery might be organised on a more collaborative basis.  The objective is to both cut costs and improve service delivery.  Total Place has caused such excitement across much of the public sector that as well as the official pilots, complementary Total Place mapping exercises have been underway across in many other areas, too.

 

Opportunities revealed by Total Place for savings have been enormous.  According to Denham, a saving of 5% to 6% in local public service spending is possible, generating across Britain a potential cost reduction of £20bn a year.  Enthusiasm for Total Place is cross party, with Conservative Party local government spokesman Bob Neill indicating that Total Place would be retained by a Tory administration and possibly extended to government departments and private sector public service providers.

 

PricewaterhouseCoopers has just completed a study commissioned by London Councils that mapped local public service expenditure across the city.  It found that total spending on London’s local public services – for residents and visitors – is around £73.6bn a year, or roughly £10,000 per person.  Even more significantly, the study suggests that a vast quantity of this could be saved without any services cuts.

Andy Ford, a partner in PwC’s public services practice, says: “Not only did we map the money that was spent, but also we looked at the opportunities to actually deliver more – or at least the same – for less, through better ways of spending that money.”

 

The PwC study focused especially on three service areas that are a particular financial burden: chronic health conditions, especially diabetes; anti-social behaviour; and the problem of worklessness.  In doing so, PwC made policy conclusions that are common across the range of Total Place pilot schemes and complementary studies.  Savings and service improvements can be achieved through better service design and by focusing far more on preventing problems rather than addressing the symptoms. 

 

The three service areas considered together account for 10% to 12% of total local public spending in London – and the scope for savings through service redesign are problem in the region of 15%, believes PwC.  Moreover, a similar scale of financial savings are probably also available across the range of other local public services in the capital.

 

“Through applying Total Place principles, potentially as much as 15% of current expenditure can be reduced, without impacting adversely on outcomes – and arguably improving outcomes,” explains Ford.  “Those principles are by are large replicatable across the public sector in London.”

 

The first of those principles is “greater personalisation in the delivery and design of public services,” suggests Ford.  Another is “much earlier intervention by agencies and also much stronger integrated case management” – so that there is less referral between agencies of people and families who require support. 

 

Ford stresses that its study for London Councils is not a blueprint to achieve savings, but rather a collection of case studies that provides evidence for the type of savings that are available.  It is what the firm describes as “a strategic positioning base”. 

 

One of the implications from the PwC and other Total Place studies is that it is service redesign and collaboration that offers the most significant savings, rather than the perhaps more obvious sharing of offices and other property.  “Savings that can be achieved by the rationalisation of assets tend to be by-products of things like personalisation of public services,” says Ford.  “That is consequential.  Then you don’t need a clinic here or police station there.”

 

Similar conclusions are reached about quangos – the study found there are 156 quangos operating in London, which spent between them £5.6bn in the 2008/9 financial year.  This is music to the ears of local authorities, which are campaigning for a ‘cull of the quangos’.  But PwC’s perspective is that it is by improving the way that public services address the problems that led to the creation of the quangos that can lead to them being dismantled.

 

Westminster City Council is convinced by the arguments for Total Place.  It has just completed an exercise to calculate the total public spending of all local public bodies in its borough – and has concluded that the figure is £2bn.  On the basis of this, suggests Westminster, savings of at least £20m should easily be identifiable in just one council area.

 

Councillor Colin Barrow, Conservative leader of Westminster City Council, explains: “The figures are estimates.  If the saving that could be achieved were one per cent, then it would be £20m.  That is not trivial.  Sir Michael Bichard and PwC talk actually about 20% savings.  So it’s just £20m, or £300m.  Either way it’s a lot of money!

 

“I just think that the potential for joining-up services across the public sector is enormous.  The secret is to put all the costs where everyone can see them.  So the Department of Work and Pensions could say if you could reduce the benefits bill then we will pay you 20% of the saving.  And we could say to a company, if you can get these difficult to employ people into work then we will pay you this.  Then there will not be anyone left lying around on the street!”

 

Barrow argues the case for Total Place as much from what achieves in getting public sector bodies to work together as partners, as he does from the likely cost savings.  He gives as an example the approach being taken in Westminster to support dysfunctional families, by having the various sections of the council, NHS and criminal justice system to co-operate and to jointly plan interventions.

 

“Co-location solves a lot of problems with communication,” suggests Barrow.  “Getting people to work together – you just have to do it!  Better outcomes – that is the big deal.  When the public sector is coherent in its offer to people who are major users of public services, then that is the answer.”

 

 

 

 

 

The outgoing leader of Leicester City Council, Ross Willmott, says that his authority’s experience as a pilot for Total Place – and also now of Total Capital, which seeks to rationalise and pool public sector spending on capital projects – is very positive. “We found that we spend £6bn between us in public bodies in Leicester and Leicestershire,” says Cllr Willmott.  “We are now looking at how to improve the processing of that money to achieve better value.”

 

The finding that most shocked the two local authorities and other local public bodies was the spending on regeneration projects.  According to the report produced by Deloitte’s, it costs the public sector £180m to spend £230m in regeneration funding in the city and county, once all the administration and monitoring of local, regional and national public bodies is taken into account.  The report also revealed that the cost of inspection regimes for the local public bodies is around £7m a year.

 

A detailed focus of the report was on local spending on drug and alcohol misuse, examining the practices and relationships that spread across the city and county council, including social services; the NHS; and the police.  “We now reckon we can save £4.5m a year, because we spend a lot on treatment, but not a lot on prevention,” says Willmott.  “There are a lot of savings to be achieved in what we spend, how we spend and in moving to greater prevention.”

 

In the Leicester and Leicestershire pilot, the emphasis was more on improving partnership working between public bodies than in the sharing of physical infrastructure and back office services.  “This is more about dealing with processes regarding drug and alcohol treatment and changing the approach of how we do it,” says Willmott. 

 

“And changing policing, as well.  Changing the approach to licensing.  Alternatives in how patients are dealt with at A&E – getting nurses to deal with it, rather than taking up valuable doctors’ time.  And improved structures for commissioning services.”

 

Much of the prevention strategy is about how alcohol is obtained, including by underaged drinkers.  The Total Place partners in Leicester and Leicestershire are now seeking to strengthen local licensing powers, with larger penalties on retailers selling to children, and the power to impose a minimum charge per unit of alcohol.  “It’s working quite well on this very specific area of drugs and alcohol,” says Willmott.  “We are hoping to achieve some very practical outcomes in a short period of time.”

 

A mapping exercise that applied only to the county within the Leicestershire Total Place project examined the vast array of customer contact points.  The survey found 450 face-to-face service points in the local public sector, which employ 350 FTE staff.  Another 300 FTE people are employed in the 65 telephone call centres.  There are also 75 different website that provide customer service information.  Not surprisingly, according to a report by the county council reviewing its Total Place experience, £29% of respondents to the telephone survey said contacting public service organisations in Leicestershire was slow, confusing and/or resulted in multiple calls”.  A programme to rationalise the structure of customer contacts is now underway.

 

John Sinnott, chief executive of Leicestershire County Council, is equally positive about the experience of being a Total Place pilot.  But he argues that there needs to be a will at senior ministerial level to take the project forward if it is to make the savings that are possible.  “What we have been saying is that we think we can join-up locally and can you join-up nationally,” says Sinnott.

 

But aspirations for Total Place have to be realistic, Sinnott believes.  “You are not going to get huge savings right away.  But you will get innovation.”

 

One practical problem, he argues, is the difference in the financial planning processes that apply in different public bodies.  While local authorities operate on a three to five year financial planning cycle, NHS bodies tend to budget for one year at a time.  Moreover, those budgets tend to be heavily influenced by the pressures to finance acute services at the expense of the preventative measures that could achieve longer-term savings.

 

With the tensions between the local public bodies that face different pressures, it has to be leadership that drives forward the agenda, suggests Sinnott.  Local leadership is important, but “only takes you so far”, he says.  “The next question is what government will do to empower local authorities at the expense of other local public bodies.  It comes down to governance.

 

Despite those local political pressures, Sinnott strongly believes that Total Place has to convert into a practical programme to achieve more effective partnership and, in doing so, cut the costs of the local public sector.  “It’s a one in a generation opportunity to show how you can join-up,” he argues.  “If you think about the financial background, if we don’t do it now we never will.”

 

Box

 

What now?

 

There is a clear movement towards adopting Total Place, despite the crowded legislative agenda as the general election moves closer.  A Private Members Bill, put forward by David Chaytor – ironically, one of the MPs disgraced and facing criminal charges over his expenses – has been backed by the Government and which would force local authorities and other local public bodies to work more closely and effectively together. 

 

In part this would be achieved by boosting the scrutiny role of councils in overseeing the work of other public bodies.  The communities department said: “The extension of scrutiny powers is part of the Total Place approach to give councils more say over spending across their area to cut out waste and duplication and deliver better value for money for the taxpayer’s pound.”