Wallace Mark Wallace of the Taxpayers Alliance suggests a rewards scheme for staff who some up with efficiency saving ideas.

How do you cut spending? That is the inevitable and crucial question facing every section of the public sector this year, and it applies just as much to councils as elsewhere.

In practice, identifying where spending can be cut and then implementing cuts can be difficult for elected councillors – particularly given the vast size that many councils have grown to.

The problems often faced by councillors seeking to make spending reductions are two-fold.

First, you come up against Rumsfeld’s famous “known unknowns and unknown unknowns”. In effect, councillors are left to shoot in the dark with questions, guessing what might be happening behind the scenes in the council’s myriad offices.

Probing and imaginative questions about each department’s activities are essential, and going through budgets line by line in detail is extremely important, but even that won’t tell you everything that goes on.

Sometimes the waste that occurs is so absurd or obscure that even an enquiring councillor wouldn’t even think of asking about it, and some council activities are so specialised that a lay councillor might not be able to see the inefficiency that might be going on.

Second, and far worse, is the problem of deliberate obstruction by council officers. Many naturally oppose the idea of spending cuts, both for personal and ideological reasons. I’m sure many councillors who read ConHome will attest to experiences of officers who view councillors as a nuisance to be fobbed off rather than bosses to be obeyed.

Middle management in particular have many opportunities to torpedo potential spending cuts if they so wish. If they don’t want their budget reduced, or the size of their personal empire cut down, they can start by being obstructive and unhelpful in the information they provide.

Talking in management speak, holding meetings at awkward times for councillors, providing only bare bones financial information and even concealing the reality on the front line all help to frustrate the process. If the councillors they are pitting themselves against get angry or critical, then they can report them to the Standards Board and subject them to an investigation.

If councillors insist on implementing spending cuts, then middle managers have the opportunity to make them politically untenable. The classic approach is to focus cuts on sensitive front line services that people actually use – close libraries, cancel meals on wheels, increase care charges, scrap bin collections and so on. There may be twice the management staff needed, awards ceremonies that cost a fortune and subscriptions to a dozen professional institutions, but they can still make sure it is the public who suffer from any cuts.

Both of these factors are serious barriers to successful cuts, and to achieve the sizeable reductions in public spending that are now essential they must be overcome.

It is impossible to give councillors a perfect view of the full organisation in all its complexity, although increased transparency does help. Similarly, it is not possible to force middle managers to be helpful rather than obstructive. Instead of overcoming the problem, therefore, you simply need to go around it.

In seeking practical and sizeable spending reductions, councillors should first set out to make new allies – the front line staff. None are better acquainted with the nitty gritty and day to day workings of the organisation. For that reason, probably they more than anyone else feel frustration at wasteful and pointless processes that obstruct getting the job done and increase the cost of delivering services.

It is probably too much to simply assume that front line staff will simply volunteer all their money-saving ideas off their own bat.

For a start, they are somewhat sceptical of spending cuts – associating them inevitably with job cuts. Furthermore, if they aren’t unionised themselves then there will certainly be card-carrying colleagues nearby to exert peer pressure against helping to find spending cuts.

Most importantly of all, they have no particularly good reason to put in more work by going above and beyond the call of duty to propose ideas to save money, unless they are ambitious for promotion. Even then, there is no guarantee their managers will actually pass on or implement their ideas, even if they are good and practical.

They need to be offered an incentive to put their ideas forward. Councils should introduce reward schemes to encourage staff to propose successful ways of making savings. Today’s grumbles at lunchtime about this or that pointless form, or the absurdity of having to make two trips in the van instead of one, could be transformed into tomorrow’s practical spending cuts.

The specific size of the rewards on offer should of course be down to individual councils, but a percentage system makes sense. If someone’s idea of how to save money is agreed by the council’s leadership, then they should be given a share of the savings made at the end of the first 12 months as a bounty.

Whether it’s 1%, 5% or 10%, and whether the amount is unlimited or if you want to cap it at a maximum amount, this is a winner for all involved. If the council gain a money-saving idea that really works and which they hadn’t already though of, then even if they give away 5% of the money as a reward, they are still well up. The staff member gets a potentially sizeable reward for their good idea and you can start to build a culture of creative thinking in which cuts aren’t always viewed as a negative thing.

Of course, it would be best to allow the option of anonymity if it was wanted, in order to protect helpful staff against the spite of the unions or managers. However, in time I suspect such a scheme would actually motivate many people to put forward good ideas.

It is a free market concept, which would harness people’s aspiration and reward their imagination and cooperation, as well as short circuit the obstructive officials who currently delay and overcomplicate the process of making savings. We need to bring out the best in council staff, and this is one way of doing so.

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