Revisiting municipalisation

Local responses to local conditions

Building on Summertown Road, Govan cc-by-sa/2.0 - © Steven Brown - geograph.org.uk/p/1765905

This essay is part of our post-covid councils work looking at the future of local government. Here Janet Sillett offers a vision of a council choosing to bring a 21st century take to the concept of municipalism.

In Glasgow following the cholera epidemics of 1842 and 1853, those responsible for running the city and shaping its future accepted the link doctors had highlighted between dirt and disease.

There were a number of influencing figures dubbed “Glasgow’s City Fathers.”

Flour merchant John Ure was behind the driving force to regulate sanitary conditions and eradicate the city’s filthy environment.

Lord Provost John Blackie was largely responsible for the 1866 City Improvement Act. It introduced the scheme to bring a clean water supply into the city with the opening of the Loch Katrine project. Gas and electricity systems followed.

City Fathers under the management of James Dalrymple, provided public transport including a tramway network.

Wholesale grocer Samuel Chisholm and coal exporter Daniel M. Stevenson, worked towards providing housing provision for the poor.

“The principal objective of the public health department of a local authority is the provision of a healthy environment in order to ward off sickness and ill-health from the inhabitants of its district. Although the provision of hospitals are included among their powers, our local councils are more concerned with the prevention of illness than with their cure.

“Slums are demolished and new houses built; public swimming baths, maternity and child welfare services… these are only some of the tangible achievements of local government, which have revolutionised the health and welfare of the whole population as compared with their grandfathers.” (Walter Elliot, Minister of Health — responsible for local government from The ABC of Local Government, C Kent Wright, 1939.)

These words are as relevant today as they were in 1939. And, especially, in the context of Covid-19. The health of our society, citizens and communities depends as much, indeed more, on the homes we live in, the environment around us, and the wider services we have access to. The stark lessons from the pandemic emphatically underlined what we learnt, for example, in the Marmot Review ten years ago.

What else can we learn from the municipalism that emerged in the early twentieth century? A clear lesson – it wasn’t imposed from the centre. Each place had its unique players and the solutions to poverty and ill health were shaped by the individual political and social and circumstances. We can’t just copy one place’s ‘solutions’ and deposit it somewhere else: even though the early twentieth century municipalisation shared many ideas and principles each town and city responded to their own circumstances, politics, and social and economic conditions.

So, what could new municipalism look like in a council in the 2020s?

Imagine this… From CE to management team Daynesford Unitary Council

Redoing the strategic vision 2021- 2031

You will have now read the paper from the leader regarding the rationale for updating the council’s strategic and recovery plan. Before our meeting I wanted to focus on the key issues raised by that paper and by our discussions over the last month with the executive.

Rationale

The pandemic graphically illustrated major challenges we face as a council such as economic, health and social inequalities, and in many cases the pandemic exacerbated them. It also shone a light on our services – inhouse, privatised and mixed provision – what worked well, not so well, where did we lack capacity?

The context is grim – the continuing impact of Covid on the local economy, individuals and communities; the council’s worsening financial situation, and the effect of leaving the EU (where we are still not sure about the medium term implications of the deal).

However, the political leadership is determined that this is precisely the time to be putting forward the ‘reset’ that was talked about globally and locally during the worst of the pandemic. Is this viable? What should be the priorities for change?

At the core of the leader’s vision is the new municipalism. This has many facets:

  • insourcing
  • growth that works for our people – renewal and resilience
  • Daynesford a unique place
  • a democratically transformed city
  • vision and new ventures, ideas, innovation, leadership

Of course, this isn’t all new thinking. It builds on the work of the last two years – especially the inclusive growth agenda, and the taking back in house of refuse and cleaning services, but it is a step change.

It is underpinned by what the leader says has to be a reinvigorated local social contract – with enhanced democratic and community participation and also the development of a renewed ‘local state’ involving all its partners and communities in progressing municipal entrepreneurship.

The overarching vision

A city which harnesses its assets to respond to inequalities and social injustice. Where it is entrepreneurial and fleet footed but its entrepreneurship is founded on the energy and involvement of its citizens and not on privatisation and unfettered growth and deregulation. A city which uses its purchasing and commissioning powers to promote equity and social justice.

A city where local people are involved with the design, management and delivery of services.

A city which delivers critical services through a mix of inhouse services and partnerships with key local actors, the third sector and its residents. Where ownership matters, but which will explore new and different models of ownership.

A city which has ambition – not just repairing council housing but providing a service for the private sector, not just advising residents about energy schemes but generating energy, not just strengthening our inhouse legal and estate services but offering a cost effective service to our residents and local businesses.

The leader wants to explore new and exciting ideas for ‘municipal entrepreneurship’.

Remunicipalisation

This is at the core of the strategic recovery plan. Thirty years ago the council delivered the majority of its main services inhouse – including council house repairs, maintenance of parks, highways, some local transport provision, such as buses, and waste and environmental services. All our professional services were delivered directly. We built new council housing and did much of the modernisation of estates through direct labour. We owned and managed care homes and our staff provided domiciliary care and meals on wheels (in partnership with charities). We managed schools. We provided community and leisure centres.

The administration is not wanting to go back thirty years, but they want to see privatised services returned to direct control where it makes clear sense. This will take time – some services will be able to be municipalised quite quickly and others will take far longer. Some will mean a completely different concept for the service.

First steps

Insourcing

Officers will be expected to provide a feasibility study for each service the council believes could be brought inhouse.

This would consider what kind of provision would work (eg direct labour, arms length but council owned, partnership, coop, wholly owned trading company), the reasons for insourcing, an analysis of how the existing service worked during the pandemic, the ‘costs’ of bringing a service in house, the social and possible financial benefits, the state of the market, the feasibility re status of current contracts, timing etc. The capacity of the council as a whole needs to be measured – have we the people and skills to manage this change in service delivery and to ensure continued effectiveness? And how bringing a service in house would fit with the council’s wider objectives and strategic vision.

The terms and conditions of the workforce are critical aspects of insourcing – what are the implications for different contracts and what are the best ways to proceed. We will be continuing with the meetings with trade unions but with a wider range involved.

Municipalising the local economy

We need to revisit the work done pre-Covid on community wealth building – is it still relevant now and if so, how can it be updated to reflect the Covid and ‘post-Covid’ context? We had begun to explore with key institutions what we meant by community wealth building and whether they shared the principles behind it. We need to pick up those contacts again and to develop the research into what is coming in centrally to the local economy and what is being spent from different institutions and how.

But the administration wants to go further. The leader mentioned alternative local currencies, municipal banks, smarter procurement. As well as the more traditional support for co-ops and community land trusts. He is especially interested in municipalising pension funds – can we do a note of the legal and regulatory framework for him asap.

Underpinning all this is considering how we can measure social value – developing our own model and/or building on others.

The work on bringing services inhouse is, of course, integral to this wider context – retaining community assets, rebuilding skills and capacity, exploring new kinds of partnerships, and using procurement to deliver value to the city and to communities rather than going for the lowest price.

Housing

The council has built a small number of council houses over the last two years. There was always the ambition to increase the number and this is now a priority. This will mean:

  • urgent identification of land
  • developing inhouse skills and capacity

The leader talked about ‘building better’ – design quality, sustainability and environmental impact are as important as numbers.

We used to employ architects, including landscape architects. Our DLO built some of our housing stock. Our small direct labour organisation has retained certain skills but they are not ready for building new homes. How are we going to deal with skill shortages? We need to link these challenges to the new local economy agenda – discussing them urgently with the city college. Can we increase our apprenticeship programme substantially? How can we work with local businesses to improve skills and capacity generally in the city? And how does new council housing fit in terms of modelling for social, environmental and economic outcomes?

Funding? We need to revisit the financial modelling on borrowing from the HRA. Where are we on RTB receipts and receipts from other sales?

Conclusions

This is an ambitious project – especially now as we start to recover from the pandemic. Not everything will be feasible but the principles behind it are. Some of what the administration wants to see in place over the next period clearly depends to some extent on central government action – a major house building programme of the sort envisaged may require us being able to use 100 per cent of capital receipts for example, but much of what is proposed is in our own hands.

Birmingham Library cc-by-sa/2.0 - © Philip Pankhurst - geograph.org.uk/p/4636868

Real life municipalisation

Insourcing

A new study published in May 2019 highlighted an increase in popularity for bringing services in-house.

Based on a 2017 survey from the Association for Public Service Excellence (APSE) with 208 respondents 77 per cent of councils indicated that they had started – or were in the process of starting – insourcing a service. Around 45 per cent reported having already completed the process. The report calculates that between 2016 and 2018, at least 220 local government contracts have been brought back into council control.

Rebuilding Capacity: the case for insourcing services (APSE) argues that insourcing has become a popular response to austerity because it gives councillors and service users more democratic control of service provision.

APSE chief executive Paul O’Brien commented (in LocalGov) : “By taking back control of local services, insourcing can make it much easier for councils to adopt a community wealth building approach to service delivery; allowing for supply change management, jobs and skills and environmental endeavours.

“As austerity continues to bite, this report has found that insourcing has helped many councils across the UK lock wealth into their local communities and drive prosperity.”

This Guardian article describes why some councils decided to bring services back in-house and includes several examples.

This article from Public Finance from February 2019 considers the slowdown in outsourcing:

FOI responses from 60 councils across England show a stark tailing off in the value of outsourced contracts. Where there was a 39 per cent increase in the value of contracts between 2013-14 and 2014-15, this had almost flattened to just 1.6 per cent between 2016-17 and 2017-18, with much smaller rises in the intervening years.

 The failure of Carillion is seen by some commentators as being an incentive for some councils to consider the insourcing of essential services.

The local economy

 The Preston Model is the one most cited in relation to community wealth building:

Community wealth building offers an opportunity for local people to take back control, to ensure that the benefits of local growth are invested in their local areas, are used to support investment in productive economic activities and that people and their local institutions can work together on an agenda of shared benefit.

 This article by CLES describes its development.

‘New municipalisation’ is not just a UK concept and it is a growing trend globally.

In 2017 Barcelona hosted the first international gathering of the ‘Fearless Cities’ network – drawing together around 700 participants and 100 citizen platforms from 180 cities and 40 countries, “aiming to democratically transform cities to resist growing inequalities, democratic deficits and social injustices”.

Further reading

A more inclusive approach to economic strategy for local communities

A more inclusive approach to economic strategy for local communities

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Scotland's City Region and Growth Deals

Sustainable Futures: Community wealth building

Introduction One alternative approach to local economic development is community wealth building, which evidence suggests can bring a multitude of benefits to local areas across economic, social, and environmental spheres. Centred on the desire to keep locally generated wealth circulating within local economies, Community Wealth Building is a framework that brings together a multitude of […]

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Exploring the Carillion collapse

This briefing provides a brief summary of what is known so far about the collapse of Carillion At the time of its collapse in January 2018, Carillion was Britain’s second largest construction firm, employing about 20,000 people directly in the UK and about 43,000 worldwide The collapse was probably the biggest corporate failure since the […]

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