As many local authorities face their biggest financial challenges over the next two years, a new report examined the steps being taken to shrink demand on public services and prevent Councils being reduced to a state of ‘perpetual crisis management.’
Managing Demand: Building Future Public Services, a report in partnership with the Local Government Association (LGA), the Economic and Social Research Council (ESRC), Collaborate and iMPOWER, argues that most politicians and executives are aware that current local authority strategies aimed at reducing services or achieving greater efficiencies are not a long-term answer to the demands of an ageing society or the challenge of public sector austerity.
The report found that despite local authorities facing a £14.4bn black hole in funding by 2020, relatively few Councils are making demand management a core tenet of their vision for the future – through which they understand the causes of local demand, how it can be prevented, and new ways to meet the needs of individuals and communities.
The report sets out approaches that local authorities can take to effect a fundamental cultural shift that would see Councils at the heart of localities in which everyone plays a role and services and outcomes are shaped by active, independent and resilient citizens.
Whilst many councils are using demand management strategies and techniques within specific service areas, there is some way to go before a ‘whole system, whole place’ approach to managing demand for services is the norm, the report said. The report provides a framework through which Local Authorities might introduce a more systematic approach towards demand management including:
Examining new forms of community leadership: Local politicians leading a new conversation with citizens that is collaborative, meaningful and trusting.
Building insight: Public agencies getting closer to their communities, generating deeper insight into their needs, wants and aspirations, and brokering new cross-sector partnerships.
Changing behaviour: Local authorities building on ‘nudge’ and ‘network’ techniques and applying behavioural insight to areas such as recycling, littering, school transport and adoption.
Changing the system: Council’s thinking ‘whole system, whole place’ - scaling up isolated examples of demand management, commissioning services preventatively, and encouraging a cultural shift across public sector organisations. Public services focused on outcomes when commissioning services
Creating shared value: Market shaping and procurement used to support communities through targeted and collaborative commissioning that is focused on community benefit and value as well as price.
Building community resilience: Engaging the community in co-designing and commissioning services such as Turning Point’s Connected Care model is important. The private sector also has a large role to play through responsible employment practice, living wage and effective skills development.
Sir Merrick Cockell, Chairman of the Local Government Association said:
“In an ageing society, the demand on councils to provide care services is growing. To cope with the changes there needs to be a fundamental reform of the way the public sector works and an honest reappraisal of what public services should look like.
“As well as supporting early intervention we need to promote and sustain changes of behaviour in communities that will help councils to manage rising demand.
“So far local authorities have largely restricted the impact of the funding cuts on their residents and have protected spending on social care for children and the elderly. But even these areas are now facing reductions. That impact will only increase over the next two years for those who use and rely on the vital everyday local services that councils provide.”
Ben Lucas, Chair of Public Services at the RSA, said:
"Public services are facing huge pressures from shrinking resources, rising demand and a changing society. Our research indicates the need for a new approach to responding to these challenges. Demand management has emerged as an influential agenda in local government, but it often lacks definition. In this report we provide a framework for understanding how demand management can meet the challenges facing local public services and society, built on a new relationship with citizens and communities."
Report authors Anna Randle, RSA Associate and Cooperative Councils design and implementation lead at LB of Lambeth, and Henry Kippin, Director of Collaborate said:
“The impact of long term demand from a changing society is a massive challenge to local authorities and public service providers. It means we need to get beyond current efficiency agendas to really understand the drivers of need and demand in our communities. As this report argues, some local policymakers and practitioners are already starting to do this. Their innovations point the way to a future model of local services in which citizens and communities play a fuller and more co-productive part.”
Jon Ainger, Director of iMPOWER said:
“This report is a timely reminder that the local state is not sustainable without a significant focus on understanding and reshaping demand for public services. Traditional modes of transformation and the usual paths to savings have both been exhausted. Local public services need to get past the cultural addiction to certainty and focus on making the behaviour change of staff, of local partners and of the public their core business. Best practice is still to be invented; we all need to be throwing the innovation kitchen sink at trying to get this right.”
Adrian Alsop, Director of Research, Partnerships and International at the ESRC said:
“Independent, high quality research that supports the delivery of effective public services is directly relevant to ESRC’s research priorities. We are pleased to have participated in this work at a time when many providers of public services are having to contend with the challenge of growing demand with limited resources. The report contains valuable examples of demand management in practice and I look forward to how the research community will explore further the development of this approach.”
The report follows a previous RSA 2020 report, Beyond Nudge, which found that local authorities have already done a great deal to adjust to difficult financial circumstances over recent years, making significant savings and efficiencies, but that the limits of such reforms are being reached.
The report warned that with rising demand, local authorities face choosing between reducing their scope and role (with public services retrenching to becoming providers of last resort) and attempting to reduce levels of demand by radically redefining relationships between citizens, communities and services. The report showed how:
Local authorities funding for elderly social care is set to be slashed by 18% by 2015/16 and funding for working age and childrens' social care services will also plunge into the red by 23.4%.
By 2015/16 social housing-related spending is expected to drop by 33.8% and policing by 26.2%.
Demand for social services is set to spiral, with the numbers of people aged 65 and over who require daily disability-related assistance to rise from 1 million in 2010 to 1.9 million in 2030
People with at least one long-term health condition are also expected to increase from 15.4m to 18m by 2025.
By 2022, the numbers of disabled people over 65 requiring care is set to increase by 40% and the numbers of people with moderate or severe disabilities is set to rise by 32%.
Notes to editors
For more information contact RSA Head of Media Luke Robinson on 020 7451 6893 or 07799 737 970 or firstname.lastname@example.org