Finances
The state of local authority finances is the elephant in the room and you just can’t start to talk about the Place agenda at local authorities without first talking about the impact austerity has had. We know the landscape of local government finance has changed. Pre-Covid most of us had never heard of S114 but it has quickly become part of our known vocabulary. Eight authorities have now submitted S114’s since 2021, declaring themselves essentially bankrupt, and there are now more than 20 in ‘exceptional financial support’. To put that into context, 14 authorities have issued S114 notices since the Local Government Finance Act 1988 became law, only two prior to Northamptonshire in 2018. These are unprecedented times for local authority spending with a significant proportion of authorities having to put in tight spending control measure to try to address large in-year funding gaps.
Whilst authorities have rightly protected children’s and adult social care budgets, since 2009 it has been Place budgets that have supplied the additional savings needed to help balance budgets. One past president of ADEPT described it as “Adults and Children’s are slowing eating my council”. We are all familiar with the graph of doom which shows government grant to local authority declining, the cost of Children’s and Adults care increasing and the gap in the middle, which funds highways, libraries, fire services, transport, and pretty much everything in the Place agenda, shrinking in size.
For managers of Place the key challenge has been about where to draw the line between what is ‘statutory duty’ and what is the ‘nice to have’s’. As well as understanding how much risk your authority is willing to take on statutory duties. How often do we empty a gully, fix a pothole or repair a street light and at what point does the risk of being held liable for an accident become too great?
Getting the balance right on capital and revenue spending is also becoming very tricky. Many authorities have taken the flexibility CIPFA (Chartered Institute of Public Finance and Accountancy) have provided in their guidelines to local authorities to stretch the meaning of what is classified as capital spending in order to use available capital grant from government to fund traditionally revenue funded areas of service delivery such as pothole repairs, bridge maintenance and repainting of road markings. Whilst this created a short term revenue savings the long term impact of diverting capital that should have been spent on road and footway resurfacing, traffic signal replacement, major bridge works, street lighting column replacement and drainage works has resulted in many ‘over sweating’ the asset and slow decline of highway assets. The proof of which is how less resilient our road networks are to weather events resulting in huge numbers of potholes each spring and angry residents.
Shire Council’s with large rural networks are finding this a major issue now as years of underspending on road maintenance is leading to a downward spiral with more and more funding needing to be diverted to safety defect repairs to meet statutory duties leaving less for long term asset renewal works.
How we go about continuing to find savings or to increase income generation is now a critical skill for any Place leader.
Resources
It used to be that whenever we discussed local authority resource issues it was usually about the lack of social workers, but the skills shortages now span the breadth of local authority business and have really started to impact on Place.
For some years now, ADEPT, ICE and CIHT have been actively talking about how we develop the next generation of town and country planners, engineers and transport professionals. Most authorities understand the need to ‘grow your own’ and have graduate and apprentice programmes in place. But the shortage of skilled senior staff is telling and has quickly become a regular talking point at industry conferences.
The shortage of skilled staff has been particularly acute for highway planning teams. For the last three years I have been trying to operate a Highways Development Management service with a 30% vacancy rate. In that time my team was actively recruiting for a development management team leader, a strategic planning team leader and three senior planner roles. Despite national adverts, website and social media campaigns, pay grade reviews, the use of head-hunting recruitment agencies and extensive searching of agency staff providers we were unable to fill the roles. This left the authority vulnerable as delays on responses to major developments did not meet statutory response timescales and began to impact on developer’s ability to deliver on housing needs. When speaking to fellow Place directors I hear a fairly similar story, often with the only solution to ‘poach’ staff from other authorities.
I even sought out professional services consultants to ask them to provide a small team of senior planners that could step in and help us meet our obligations despite how much this might cost, but none could provide a service with enough senior skilled staff. The reality is that the staff in these roles just doesn’t exist and certainly not at the wages which local authorities can afford to pay.
Agency staff is also not the answer. Whilst agency staff can and should provide the flexibility we need to adapt to changes in workloads, they shouldn’t become a large proportion of the workforce. But they have. In my last authority I was lucky enough to have had an engineering design team that had just over 100 engineers providing a great resource for designing and delivering the authorities capital programme. However, over 50% of those engineers were agency with many of them having worked for the authority for more than 10 years.
Having too many agency staff results in difficulties of having to manage a ‘two tier’ workforce with the gaps in pay between agency staff and local authority staff growing wider and wider. It becomes a very difficult conundrum to get out of when you can’t seem to get good responses to adverts for engineers. Again, it leads back to the need to develop you own pool of trainee engineers and to having a good career grade programme in place. It isn’t just about recruiting and training new engineers, but about keeping them in the workforce.
ADEPT has done some great work in providing leadership training opportunities to develop the next generation of Place leaders. But no one really has any short-term answers for how we fill the gapping hole in our planning or engineering resources.
In Warwickshire I was involved in a project to bring back a work experience offer to secondary schools with the aim of demonstrating to young people that a career in a local authority is a viable and exciting path. The programme aimed to offer a two weeks of work experience with the first week being an introduction to the types of work local authority environment directives undertake spending half a day in a wide variety of service areas from archaeology, ecology, highways, engineering, forestry, floor risk management, transport planning, etc…… During the second week the pupils get then choose which area of the council they wish to learn more about spending an entire week working in their chosen team. The plan was to target schools in some of the more deprived areas of the County even if it meant arranging transport to get the kids to the job locations.
But we need to do more and it means every local authority Place director dedicating a bit of their time and a bit of their team’s time to programmes of workforce development and recruitment. Sending a team to every local university career fair, encouraging staff to get involved in speaking/teaching opportunities at local schools and making space within busy diaries to mentor and develop graduate and apprentice placements.
Decarbonisation and Climate Change
I don’t think it is fair to talk about the decarbonisation agenda without first having set out the context of the financial and resource challenges Place directors are facing because it is really those factors that will dictate how quickly we can move our local authorities towards net zero operations. Simply put if a quick win is to move all of our smaller fleet vehicles over to electric but the cost of those vehicles is twice what has been planned for in the asset replacement strategy then making the switch now may not be possible. And if you don’t have a fleet manager or the room within staff budgets to have climate change advocates in the business then where is the expertise and resources needed to develop the strategies and implement the change?
The challenge facing Place Directors is to get the balance right between demonstrating movement on decarbonisation whilst at the same time waiting for optimal time to invest. It still feels a bit like some of the technologies are still too ‘ground breaking’ and on the higher end of the technology adoption cost curve. Whilst the move to smaller electric vehicles seems manageable now as the costs of electric vehicles has begun to drop, solutions to our larger waste collection, winter gritters and fire appliances are still someway off. Whilst electric buses are starting to be seen on our roads industry is still piloting hydrogen and other low carbon bio-fuel options.
Our private sector partners have latched onto the importance of the decarbonisation agenda to our future procurement requirements and they have experimented with replacing petrol based hand tools with electric ones and with lower carbon materials such as cold asphalts but it will be some time before these initiatives begin to report results and even longer before low carbon materials asset life can be assessed.
Authorities have also started to invest in solar and wind, using land and building assets to help secure future reduced energy costs or income streams. The pathway to this has been tried and tested by local authorities who over the last ten years have made the switch to LED street lighting saving up to 70% on energy costs and making a significant dent in their carbon footprint.
Probably the best place for Place Directors to begin is with getting our house in order by developing decarbonisation plans setting out a road map for each area of business so that the costs associated with the changes need can be assessed and planned for in our long term financial strategy.
In Warwickshire, one of the key pledges elected members made as part of their climate emergency declaration was a target to plant a tree for every resident. Trees are brilliant at carbon capture and can lock carbon away for many years so many authorities are making pledges to plant more trees. The government has been backing this up by making funding available to assist with the purchase of land and for the establishment of tree nurseries to supply trees.
With limited number of tree nurseries in the UK most orders for tree whips or two-to-three-year-old saplings can only be filled through European providers meaning the trees are not likely to be native species, have higher risk of disease and come with miles of transportation carbon built into them. Working closely with a lead arboriculturist, I developed a business case to convert one of Warwickshire’s small holding farms into a tree nursery with the goal of making it self-funding within four years through the sale of trees to other local authorities and external groups. The trees being cultivated are all indigenous including a local variety of ash that is resistant to ash dieback. Acorns collected at the Council’s country parks or through local school children and volunteer initiatives provided the first plantings.
Looking to the future the trees and woodlands within Warwickshire will always need restocking. Not all trees survive when planted out and trees do eventually die. Both the recent Environmental Bill calling for more street tree planting in new developments and the councils rural tree planting programme will increase the tree stock that WCC manages. Replacement trees will inevitably be required in the future and a WCC tree nursery can provide these. Indeed, the more the nursery does provide the more the financial business case stacks up and the more the other benefits improve.
Warwickshire is fortunate to have skilled forestry staff with knowledge and experience of tree production but there is a lack of skill arboriculturalists and the hope is that the nursery will also provide a source of apprenticeships for forestry students.
Scott Tompkins
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