Service Transformation

The traps in the devolution debate

Service delivery usually benefits when neighbourhood and community level organisations are in charge. But the current devolution debate is centred too much on cities and counties, says Tony Armstrong, chief executive of Locality.

Devolution down from Whitehall is a good and welcome thing – but could be so much better. That’s a message we’re hearing from many of PSE’s contacts and interviewees at the moment, most recently from Tony Armstrong, who runs community organisation member body Locality. 

He said: “The devolution agenda offers huge opportunities and it’s a welcome sign that these discussions are happening and that local authorities are actively planning what might happen to bring power closer down to communities. 

“There are risks in the current approach. From what we’ve seen so far, the neighbourhood level has been almost absent from the discussion. 

“The risk is that devolution focuses on the city-region or on counties and forgets that neighbourhood level. 

“Our other concern is that the community and social sector organisations are not playing an active part in those negotiations.” 

False economy 

PSE has reported before on Locality’s ‘Keep it Local’ campaign, centred on the theme of local-by-default: if services can be run locally, they should, and commissioners need to pay attention to that fact. Standardising, centralising and upsizing all too often present a false economy – they may seem cheaper at first, but one-size-fits-all, provider-led models often fail to take account of specific needs and circumstances at the neighbourhood level. 

Armstrong said: “Decisions and service delivery can be more cost-effective and offer better outcomes when delivered at a neighbourhood level. 

“At the moment, we’re seeing a lot of contracts being tendered that tend to be quite large, bundling up a number of services, done on a whole-town or city local authority basis. The problem with those approaches is that they tend to only be available for bidders who are large, mostly national organisations. The value of such large contracts mean local organisations, particularly community organisations, aren’t in a position to bid. 

“Our member organisations are finding that services they have been running locally are suddenly no longer available for them to bid for. It’s having a negative impact on the organisations themselves, and the outcome is also that you end up with slightly standardised, scaled-up service delivery models, that aren’t rooted in local neighbourhoods.” 

The community organisations that used to run such services are sometimes finding themselves called in as subcontractors to a big company or national charity. “So they’re providing the same kind of services they were doing, but management fees are being siphoned off outside the area – or else they face new organisations, new teams and new services in their patch, which means that they are in competition. Often, because these services are quite tightly specified through the tender process, they’re not actually meeting the need that still exists in the neighbourhood,” Armstrong explained. “Our members are facing the same people coming through the door, with the same needs, but the contract that’s been awarded isn’t necessarily picking up on that need.” 

Valuable role 

The most important thing is making commissioners realise the value of the level playing field, Armstrong said, with contracts at a biddable and winnable scale for community organisations. Other such organisations might be able to play a valuable role in designing tender processes in the first place. 

Place-based community organisations, especially the larger ones, can take a very holistic view. “The increasing trend to outsourcing, combined with the trend for specialising services, means often you get lots of different types of services impacting on a particular place. The beauty of a neighbourhood or community-based delivery approach is that they can see the connections. They’re not just looking at, say, mental health or housing in isolation of everything else. They know the people in their patch, and take a person-centred view. 

“One thing our members say more than anything is that they listen to the needs of people, rather than trying to impose a ‘service model’ on people’s needs, which is often inappropriate.” 

With a spending review on the horizon – due to conclude by 25 November – Armstrong wants the Treasury and departments to focus on opportunities for rethinking services, and not just cuts. 

The whole process is “full of risks”, Armstrong told us – most notably of budgets just being slashed with no thought to redesign. “People have come to the end of the line – many services are at the very edge of their ability to bear more salami-sliced cuts. 

“The spending review could focus on supporting local authorities and community organisations to work in partnership to rethink the way services are delivered.” 

The signs are ominous though, with the mood music from the Treasury “very much against what we’re trying to say”, according to Armstrong. 

The language used so far has all been about efficiencies in combining services, centralising procurement and so on. “That’s a false economy of scale: the bigger you get, the more centralised you get, you can only then respond in a fairly one-size-fits-all, service-provider-led model.”

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