A few years ago I was doing some coaching on performance management for chief executives of NHS trusts. When I put the question ‘Who is your boss?’ to the group it provoked a long discussion. The CEOs were unsure whether their bosses were the chairs of their trusts, or the CEOs of their strategic health authorities. Their dilemma was not just the result of unclear leadership. At its heart was the UK’s ambiguous and contradictory attitude to whether public services should be locally or centrally controlled; a debate that has resurfaced now that localism is the Tories’ new buzz-word.
Since the early 1990s, the day-to-day management of the NHS has, in theory, been devolved to local trusts. However, the structure of the old centralised NHS, with its regional health authorities, remains in place. Even those who work in the NHS are unclear about the role of strategic health authorities and the extent of their power. The introduction of the supposedly autonomous foundation trusts has, if anything, added to the confusion. Some critics have argued that “accountability still runs upwards rather than downwards”.
The same dilemma exists in local government. Local authorities are local in mame only. Their tax raising powers were curtailed by Margaret Thatcher and around 75% of their funding now comes from central government. The tension between central and local control is most obvious in children’s services. The contradictions were highlighted during the Baby P case; children’s services director Sharon Shoesmith was removed from her post by Ed Balls but it was left to the local authority to formally terminate her employment.
The Baby P case gives a clue as to why the British state struggles with localism. Devolving control and accountability to local organisations is fine when things are going well but as soon as there is any populist outrage about something that a local authority or NHS trust has done, government ministers start backpedalling like mad. Local control is great until a newspaper headline screams ‘postcode lottery’. Ministers will champion the right of schools and hospitals to manage their own affairs, free from Whitehall control, until they do something that leads to a public outcry. The minute the tabloids start throwing stones, localism goes out of the window and ministers intervene.
The case of Rose Gibb is a classic example. Her employer, the theoretically locally managed and locally accountable NHS trust, offered her £250,000 to resign from her job as chief executive without a fuss. Amid public outrage about the huge sum, Alan Johnson, the health secretary, intervened to force the trust to withhold the payment. In the event, there was a lot of fuss and a court case which is probably not over yet. Regardless of the rights and wrongs of paying disgraced executives large sums of money to resign, this case showed the limited power of the trust’s managers. As in the Baby P case, as soon as the media outcry started central control was reasserted.
The Conservatives insist that things will be different when they get into power. They really will devolve power and make the delivery of public services more locally accountable. Or so they say. James Bartlett of think-tank Demos seems to believe that David Cameron will be the leader to decentralise power. The early signs, though, are not encouraging. David Cameron has started back-pedalling even before he has been elected.
The proposal to put all public sector salaries higher than the prime minister’s £198,000 to the chancellor for approval is surely just the sort of Whitehall meddling that the Tories say they want to eliminate. At the same time as they are saying that public services should be locally managed they are proposing to centralise the control of pay and incentives, one of the most important management controls.
This measure is, of course, driven by the uproar from the Taxpayers’ Alliance and others over the high salaries of senior public sector executives but it gives a clear indication of how far Tory localism will go. Like Labour, they will devolve power until there is a row about something that a public sector body has done, at which point the ministers will intervene and overrule the decisions of local managers. The ambiguity around Britain’s not quite centralised but not quite localised public services will continue under the next government and, in all likelihood, the government after that. No politician has the nerve to devolve power and then face down the criticism when things go wrong.