An “Exclusive” in this week’s Municipal Journal trails an article in their next edition about place-based budgeting (son of total place, grandson of community-based budgeting, younger brother of localism and so on…).

The thrust of the article will apparently be that

many councils are not ready to implement place-based budgeting and must shift from their ‘comfort zone’ to co-ordinate radical Treasury plans for devolved public spending

and as a taster it’s claimed that

Treasury officials have warmed to the idea of merging public services budgets across a locality – such as council, health and criminal justice spending – into a single pot, and devolving decision-making over how cash is spent, and services prioritised, to local managers.

There’s a clear attraction for local politicians of that sort of devolution although I’m not sure they’d accept it should be to “local managers” and it’s accompanied by the threat that devolution is expected to go beyond public agencies to communities.

My advice would be softly softly catchee monkey, for those old enough to remember that piece of folk wisdom.

Yes, it might be good to bring public services together locally.  But the lessons of systems thinking would urge caution.

One of the basic ideas of systems thinking is to work out what the system is, what should be part of it and where you should draw the boundary around it.

The system needs all its parts to work in harmony (for which read efficiently and effectively) for the greater good.

But individual parts, no matter how superbly designed, will not function without being part of the whole.

Systems thinker Russell Ackoff used to exemplify the idea with the everyday motor vehicle. Individual parts of the engine will not work without being joined to the rest of the engine. The engine will not work without a fuel supply and a transmission system. And so on.

“The car” is the system. It stills needs inputs to work – fuel, a human driver, occasional intervention for maintenance and repair – but with these taken care of it works in harmony as one system.

The challenge for those looking to brigade services on a local geographical basis is the answer to the question “What’s the system?” If it’s essentially a local area – probably defined by the geographical boundary of a local authority, fine and well. But what about functions that also form parts of other systems?

Criminal justice might be an example. Yes, the links to local authority services are there. But are they stronger to, say,

  • a police force that transcends several (maybe many) local authority boundaries
  • a national courts service
  • a national probation service
  • a national prisons (sorry, offender management) service
  • a ministry of justice that sets policy and makes key interventions?

You don’t have to look far for examples of where a system is dysfunctional because it hasn’t been properly defined

  • when British Telecoms was first privatised it restructured itself into districts across the UK, each a profit centre with its own directors, HR and training functions and so on. But a moment’s rational thought would have made them realise that the essence of the business was communication between a national (indeed worldwide) network of points for which local geographical boundaries were irrelevant
  • numerous examples of out-sourcing of work (usually “back office”) in the belief that it can be done cheaper elsewhere by experts processing higher volumes of transactions from a number of clients.  But removing a process that is an integral part of an existing system lessens the chance for feedback between the parts to ensure the system works efficiently and effectively
  • more recently and tragically, the report commissioned by the Birmingham Children’s Safeguarding Board into the death of Khyra Ishaq concluded that had there been better assessments and effective interagency communication over a period of time it [Khyra’s death] could have been preventedBut it seems that each part of the safeguarding system thought its being part of another system was more important.

The rush to place-based budgeting brings to mind the quote (variously attributed) that you should be careful what you wish for because you might get it.

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