News
Cross-council collaboration on administration has done little to help with the impact of austerity
Thomas Elston and Ruth Dixon, both of the Blavatnik School of Government at Oxford University, have taken to the LSE’s Policy & Politics blog to report on their assessment of the effectiveness of “sharing” administrative services across council boundaries as an approach to dealing with the swingeing cuts to local authority funding that have prevailed since the settlement of 2010.
… administration costs fell on average relative to total spending across the period 2008-2016. The size of this reduction varied by council type, with, in particular, district councils showing a greater relative fall than other types of council (though from a much higher baseline). However, there was no evidence of a relationship between the degree of participation in shared services and the change in relative administration costs, either for all councils taken together or for upper- and lower-tier councils separately…
… we found no evidence that lower structural complexity improved reform performance. And sharing of labour-intensive professional (rather than automated clerical) services actually showed a small but significant positive relationship with administrative intensity. This likely reflects the limited potential for scale economies in activities that are not capital-intensive, combined with the costs of coordinating multiple partners.
The implications of these findings are fairly damning for the collaborative administration paradigm:
Overall, then, we found no evidence that sharing either administration or tax services has helped councils to cope with the budget cuts brought by austerity. Nor does our research suggest that imposing strict “scope conditions” on sharing arrangements – limiting participation to organizations with high baseline administrative intensity; only forming partnerships of low structural complexity; and only sharing capital-intensive (technology-based) functions – is a promising way forward.
While we do not exclude the possibility that individual sharing arrangements can and have produced efficiencies for their participant councils, great caution is needed by those advocating and implementing this type of reform.
This is valuable knowledge, given that there is every likelihood that budget cuts will remain the norm for some time to come… but it makes grim reading, given that caution seems to be an increasingly scarce commodity.