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2017: New Year, New Challenges

As we all adjust to the changes brought about over the last year, what does this mean for public services in 2017? John Copps looks forward to what might be in store for the year ahead.

The past 12 months will live long in the memory. With the vote to leave the EU, the resignation of the Prime Minister and the US turning to Trump, to say it was a turbulent year feels like an understatement.

We will gladly leave the geopolitical commentary to others – but the events of the last year have important ramifications for public services at home. With the elevation of Theresa May to PM, some of the themes of the previous administration – most notably the rhetoric around austerity – have faded. The new Chancellor, Philip Hammond, whilst not an instinctive big spender, has argued that the timescales for balancing the budget need to be relaxed to soften the impact of Brexit.

If 2016 is anything to go by then making predictions is folly – but that doesn’t diminish the temptation to make some. So, looking into our crystal ball, what fortunes lie ahead for public services in 2017?

Brexit in 2017 – distracting from reform elsewhere?

First a quick word on Brexit. I think we can expect little direct impact on public services over the next twelve months. A poll we conducted at an event in Manchester showed that public servants still see budget cuts as the key driver of their decision-making over the coming years. Brexit was at the bottom of their list.

The greatest risk in 2017 is that Brexit becomes a distraction, monopolising the time of ministers and senior civil servants at the expense of reform elsewhere.

Beyond 2017, we can only speculate. Exiting the EU may bring change to procurement law – possibly reducing the transaction costs of commissioning by making it easier to directly award contracts. However, this could be counterbalanced by more stringent immigration laws pushing up wage inflation. We can expect both pros and cons for public services.

Mixed results for devolution – but regionalism still alive and well

Since the summer, it is fair to say that devolution has stalled. Under the Cameron government, it was the bright new future for the UK’s regions.

In the boardrooms of town halls, devolution plans have been beset with problems. Witness to this is the collapse of deals in the North East, East Anglia and Lincolnshire. These areas found that the devil is in the detail, with financial pressures playing a critical role and many local politicians reacting badly the idea of an elected mayor. This hasn’t ended the prospect of greater cooperation within regions through combined authorities though.

Bucking the trend, Manchester continues to forge ahead with devolution proper. Those at the sharp end of public services in the North West are full of optimism about its future. In particular, plans for collaboration in health and social care are gaining momentum rapidly and the Greater Manchester Combined Authority has secured £450m from central government for a ‘transformation fund’, on top of its £6bn annual health and social care budget.

The danger of devolution was always that it could lead to divergence between different parts of the UK. At this rate, Manchester is on its way to looking like a city-state, as regions elsewhere risk falling behind.

No option but to work together – health and social care at a crossroads

It’s now a cliché, but we will say it again: social care faces a crisis. To the dismay of sector leaders, the Chancellor’s autumn statement was silent on the issue. However, since then we have learnt that there is a debate at the heart of Government over how far to loosen the controls on raising council tax to help plug the financial gap.

By passing over the immediate demands for more government money, the government does have at least one thing right – there is an underlying structural issue that can’t be solved by throwing money at the problem. There is now no alternative but for closer collaboration between the NHS and local authority social care. 2017 will undoubtedly see more of this. Sustainability and Transformation Plans (STPs) – the health sector’s take on regionalism – must be the vehicle to make this happen. To date this has not been without its problems and what is now required is genuine collaboration between local authorities and the NHS.

Picking up the pace of reform to children’s social care

Many local authorities are advancing plans to become ‘enabling councils’, externalising provision to community providers, the voluntary sector, or giving employees the chance to take on the services themselves. Children’s social care remains the area of council-spend that has been least subject to this trend. 2016 saw an increase in the number of councils looking to develop alternative models for their children’s services. Will we see this continue in 2017?

The sector is battling against a perfect storm of financial pressures and rising demand for safeguarding services. But according to the National Audit Office, child protection services in England remain ‘unsatisfactory and inconsistent’ six years after the government vowed to improve provision. 75% of safeguarding services are judged by Ofsted to be inadequate or require improvement.

A year ago, then Prime Minister David Cameron, announced that the transition of services to independent Trusts would be the preferred route for failing authorities. Now, the pressure for all local authorities to reconsider traditional methods of delivering children’s services is growing. In 2017 we expect to see many more council follow the example of Kingston and Richmond, Doncaster, Slough and Sunderland, creating new innovative models to drive improvement across services.

Overall, 2017 is set to be a year of adjusting to change, no doubt with a few surprises thrown in.

From everyone at Mutual Ventures, we wish you a peaceful Christmas and a healthy and prosperous 2017. We look forward to working with you in the year to come.

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