Friday, 18 December 2009

Councils should become more businesslike but not more like a business

The New Local Government Network thinktank proposes that local authorities should be allowed to engage in commercial trading in order to supplement their income. It suggests that councils could sell insurance and mortgages. The idea is specious, ill thought-through and dangerous. It undermines the public ethos of councils and the importance of maintaining a clear distinction between organisations that trade with the public in order to return a profit, and those that have a guardian status in protecting and serving the public. It risks moral confusion inside the council, as well as with members of the public and other commercially competing organisations.

Under existing legislation, local authorities already have powers to raise revenues from car parking. The London Borough of Hounslow has been accused of sharp commercial practice over this, from which I have personally suffered. Such councils have no interest in charging just for the time used. It suits them if people have to estimate the likely time they need in a pay-and-display car park, then inadvertently overstay, so that they can then ‘fine’ them £50. Showing discretion and tolerating overstaying by a few minutes runs counter to the council's interest in collecting a stiff fine. This commercial mindset can lead to setting targets and incentivising parking attendants.

Darlington Borough Council has been criticised for fining householders over refuse collection infringements, such as a £50 fine for putting their rubbish containers out onto the pavement six hours too early.

The consequence of commercialising a public service is an erosion of trust between councils and members of the public. It overlooks ethos-related questions such as ‘Why are we in business?’, ‘Who are we here to serve?’ and ‘Who is paying our wages?’

Such philosphical issues are, of course, matters of leadership. This subject is explored in The Search for Leadership: An Organisational Perspective. In particular the book examines the important work of Jane Jacobs in Systems of Survival.