News and Comment

Risks and accountability of the local, social entrepreneur

Thursday 14 April 2011


The Institute for Government has recently published a paper written by Andrew Cahn and Michael Clemence with the great title ‘The Whitehall Entrepreneur: Oxymoron or Hidden army?’ Interesting though the analysis of the civil service and government is, what excited me was the paper’s relevance to local government.

In the local government world there is the same loose use of the word ‘entrepreneur’ with the same risks of misunderstanding the culture of public service. Perhaps more dangerously, there is the appropriateness of taking the risks inherent in entrepreneurialism when the lives of vulnerable people and essential public services are at stake.

In some ways local government is similar to central government with the same need to minimise political risks for elected members and the same cultural focus on stability of employment and public service rather than on personal gain and competition. As local government considers how best to make reducing budgets go further whilst maintaining or enhancing positive impact on outcomes for citizens and service users, there is increasing discussion about the potential of outsourcing to providers outside the public sector in the for-profit and not-for-profit sectors.

Proponents of outsourcing emphasise the potential of innovation and the advantages of throwing off the traditional local government bureaucracy and culture; they say they want to attract entrepreneurs and social enterprise to replace cautious, inefficient public sector services, and they may be right at least in the short term. But Andrew Cahn is a wise and experienced civil servant and we should heed his warnings. Decisions about the proper use of public money are rightly made in the context of local democracy and it is therefore hard for elected members to delegate all their responsibilities to entrepreneurs when these decisions might put vulnerable people at risk and fail his ‘Daily Mail’ test.

The $64,000 question remains to be answered – how big does the strategic (commissioning only) council need to be in order to reassure elected members and account properly to the public about the system? And who will actually take the blame in an outsourced system if there is another Baby P tragedy?