Monday, 17 May 2010

Responding creatively to the deficit

Some people make things happen, some watch what happens,  while many just don't know what hit them. Community groups and campaigns are about making things happen, which is what practical political education and this blog are about.

One urgent issue facing many communities and learning providers now are the coming cuts in public spending. I've been through many rounds of sharp cuts in the 1970s, 1980s and 1990s, on both sides of the cutting table, so here are a few hard-won survival tips that may be useful now.

My experience of cuts goes back to the mid 1970s when the IMF imposed spending cuts and I was a young, part-time adult / community education tutor and member of the university trade union anti-cuts committee. The cuts united blue and white collar workers on campus for the first time and we met with Shirley Williams, Secretary of State for Education, to stop cuts to the university budget. She listened intensely and described her dilemma of choosing between schools, colleges and universities. The universities won back some cash, but £1m went to the famous adult literacy campaign, On the Move: which goes to show that in the midst of cuts there can be creativity.

In the early 1980s, I lived and worked in the privatising borough of Wandsworth. Comrades on the Trades Council observed that those unions which engaged with the Council over cuts and contracts often gained more than those who went for outright opposition. I was also part of a community study group which compared spending and services in Wandsworth and Lambeth, looking at the complexity of the issues behind the headlines: more money did not always mean more or better services, but small p politics made a big difference in who got what.

After 1986, I was on the other side, as a senior manager for adult education in the ILEA, making deep cuts year after year. It was a terrible, shameful time. Endless large meetings of numerous full-time staff hammered out the criteria and processes for cutting classes by part-time tutors. Looking back, we could have cut management jobs without reducing services for the community. This was one of many times I’ve seen public sector managers subtract value when greater creativity and closer involvement of the community could have aaded value, despite the cuts. It is not easy to see what matters from the inside, when you are working flat out, doing what you believe is right. But self-interest is a powerful distorting lense. Professionals naturally believe they know what's best for people (and sometimes they do), but spending cuts should not be decided by a battle between professionals (managers and tutors in this case). In a democracy we are accountable to the people and a strong, independent Board representing learners and the community could have done a better job, but they relied on us as managers for advice on what to do.

Then in the 1990s I shared responsibility for community education in a London borough. Every year we had to offer up cuts of 10, 20 or even 25%. Then my whole team was made redundant. A few survived by creatively changing what they offered and how it was funded, but most went on to do other things. We all flourished in different ways. It wasn’t the end of the world. Although my income dropped by more than half, the freedom of self-employment brought its own rewards so that in real terms I was better off.

Throughout this time I was involved in community projects or campaigns, at different times seeking funds for new projects and trying to get services to address race equality, the needs of parents, the environment, international development or other issues.

So the following points draw on wide experience of public spending cuts.

A tale of cuts foretold
We’ve known cuts are coming for over a year. In March Alistair Darling warned that Labour’s cuts will be "deeper and tougher" than Margaret Thatcher's in the 1980s. The Institute for Fiscal Studies said Britain faces "two parliaments of pain" to repair the state's finances, with hefty tax rises and spending cuts of 25% until 2017.

Now we know there at least £6bn will be cut this year, an emergency Budget in June and deeper cuts from 1 April 2011. We have been well and truly warned, so now we can prepare.

So what to do?
Spending cuts redistribute roles and responsibilities as well as resources within organisations and sectors as well as between services. Whether this is good or bad depends on how they’re done. Usually some groups suffer while others prosper. During the 1980s, unemployment soared, inequality widened, public services crumbled and almost a generation of young and old were hit particularly hard. But that doesn’t have to happen.

Britain is the world’s sixth richest country. We waste a lot, including many talents of our people, energy, food and the environment by mis-using resources. We need to be more frugal and equitable to live responsibly on this finite planet, where most people live on less than €2 a day, thirty times less than in the UK. We have room for manover.

All public spending decisions are political battles about how to create and distribute income. At times of financial constraint we all need to look more deeply at what, why and how the state does things. This is a chance to stop doing things that cause harm and find better ways of doing good. Defending the status quo is not an option, because saving one thing means sacrificing something else. With an annual short-fall of £163bn, some taxes have to rise, some spending has to go, and many things have to be done differently or not at all. We can choose whether to be part of the decision-making process and promote our priorities, or leave it to someone else and cope with the consequences.

The following tips and questions may help you respond to the deficit. The questions are most relevant for community and voluntary organisations which get some public funds, but they may also be useful for public service users, staff and governing bodies.

1st, Be very clear and precise about your own purpose and priorities:
- What is most important to you, as a person, for your organisation, and as a citizen?
- Does everything your organisation does meet your purpose and priorities, or are there things it could stop doing?
- What do you want from state spending, for yourself, your organisation, the people you serve and the country? Are there things which could benefit from being done differently (or not being done at all)?

2nd, How could spending cuts, tax rises or innovation affect your purpose and priorities?
Speding cuts could affect communities and the voluntary sector in many different ways, such as:
- increased demand for help, if more people loose their jobs, get into debt, loose their home, become depressed, turn to crime, get into drugs, families break up, etc;
- an increase or reduction in volunteers or activists able to do something;
- a cut the income available from public or private sources;
-  or an increase in income for grants or contracts to meet specific needs in your community or area of work;
- greater competition or cooperation between individuals or organisations;
- they may stimulate innovation, so that new organisations or technologies emerge which do what you do better, more easily or more cheaply;
Look carefully at what is actually happening in your area of work and how spending cuts could affect it; what are the threats and opportunities for your priorities? Tax rises may also have negative or positive effects on what you do, so you need to look at these as well.

3rd, Be pro-active: don’t wait – find out what might happen, prepare thoroughly and take the initiative.
- Study the thinking and planning in government and agencies that affect your work, purpose and priorities, including the manifestos of the political parties locally and nationally, influential think-tanks, and national pressure groups.
- If you get and want to continue getting public funding, look at which public spending priorities it meets (these are currently expressed by local priorities of the Council, Local Strategic Plan, and Primary Care Trust or national priorities, as set out in the Conservative and Liberal Democrat Coalition Agreement, and  Public Service Agreements (PSA) indicators (bearing in mind they could be modified or scrapped).
- Join or form coalitions with others who share your purpose and priorities, both locally and nationally;
- Build links across sectors, with trade unions as well as local business, grassroots community activists as well as public services: although you have different interests, priorities and ways of doing things, you probably have a shared interest in wanting the best for your area and may find creative ways of doing things better;
- Get to know and stay in touch with your local councillors, officials and Members of Parliament, make sure they know, understand and support what you do (Contact your Councillors, MP, MEPs, MSPs, or Northern Ireland, Welsh and London AMs through Write to Them)
- Identify possible spending cuts or tax rises which would help your cause, because this could relieve pressure to cut or raise taxes elsewhere: for example, cutting subsidies or increasing taxes on pollution or anti-social behaviour could raise revenue and create benefits.
- Look for ways you could do more for less and meet needs more creatively.
- If you represent a coalition or people who could be seriously affectived by the budget, prepare a detailed budget submission to make your case for specific areas of spending, cuts tax rises, tax cuts or innovation, and get it to the people making the decisions which affect you (see next point) as soon as possible.
- Don't get sucked into competition with the public sector: co-operation can serve the public better if we focus on meeting needs, using resources better and enabling people to take control over their lives.
- Campaign for your specific aims and priorities, not against cuts: be specific about its benefits and how it contributes to the objectives of the government, department or agency the funding comes from.
The coalition government has made a lot of progressive commitments, which you

4th, Get as close as you can to the cutting table: for every budget line there is an official and politician responsible who will make the incision. Find out who they are, what pressures are on them, what are their interests and priorities, and how could you help: they may welcome pressure to defend things they also believe in.

All spending cuts involve a twin track - the big, broad headline decisions at a national or town-hall level, or the specific details which affect your area. It is worth keeping an eye on both, but focusing on the one which will have most effect on what you do. National alliances and pressure groups can focus on the big picture, but they are also stronger when they draw on local activists and examples. At a local level it is often easier to know who is actually making decisions and to be creative about where the money comes from. For example, if health spending is ring-fenced, then look at the health benefits of your work and you could get extra funding from the Primary Care Trust. For example, during the 1980s, local authorities cut youth services but some police forces funded activities for young people because they helped with crime prevention. Be creative.

Several sets of officials and politicians are usually involved in any specific decision:
- a service manager, politicians or a voluntary board directly involved, usually cutting under pressure from above;
- senior figures locally or nationally who set the budget for services, including the one that concerns you
- Finance Department or Treasury which imposes the overall budget on everyone and tries to balance the books, and the new Office of Budget Responsibility which will provide independent analysis of public spending..

5th, be creative: there are many different ways of meeting the threat of cuts – fight, flight or insight:
you can
- defend the status quo
- propose alternative cuts and or tax rises
- diversify or seek alternative funding
- do things differently

A ‘whole systems’ approach to improving public services while often reducing costs by putting users at the centre and empowering staff to respond to demand. For more details visit The Systems Thinking Review or read John Seddon's book, Systems Thinking in the Public Sector, or The Illusion of Control from SOLACE.

6th, always have a fall back (or two): when seas are rough, fisher folk mend their nets

What’s your contingency plan if your budget is cut completely? Do you seek a merger, go completely voluntary, pull back to a tiny core of self-funding activities or develop new, income-generating activities?
If you re-trench, how can you retain and develop the skills, tacit knowledge, relationships and potential to grow again when things improve.

7th, take people with you: when you have difficult choices to make, let people know what’s happening, set out the options and criteria for making difficult decisions (whether it is to a fight a particular cut or to pass it on), and invite innovation.

Austerity is often a time of innovation. Now is the time to find new, better, smarter ways of doing things. Even without the deficit, demand for public spending is rising – decent pensions for all, support for carers, health care and many tough social problems urgently need more attention. Ultimately the only way to make the money go round is to use it smarter. That's how we make things happen, even at a time of spending cuts.

1 comment:

  1. I think all of this is right, espcially points 1-7 and one way or another we're all living it. I wanted to voice some other positions and tactics alongside these to counter the self censorship that often takes hold as organisaitons focus on survial. I think we need to continue to think critically about why we have a deficit and make sure our astute moves are principled ones. The drift to the right, in our politics, away from a welfare state to an arms length one, is all about putting more responsibility onto local people. Sometimes this is right, but we should not just accept the mantra that communities have to do more, the state has to do less, and the market continues to be our ultimate arbiter. There is a sense in which the recession hit the community sector years ago, because the money that came into the third sector never trickled down to the majority of smaller community groups. The Third Sector Review by Office of the 3rd Sector picked up on the fact that small and mdeiuum sized charities were in decline by 2007, let alone the majority of community associations below them. On this reckoning, contracted organsiations becoming more sophisticated in negotiating their own future is not the issue. We need a fairer third sector / civil society, not just a more creative one hence the need for political awareness and education (matt scott)