This week 43 English local government bodies were merged into just nine much larger local governments. Whilst most commentators have concentrated on the implications for local democracy, which are important, they have missed the bigger picture.
Back in the late 1980s and 1990s the trend in British public organisations was towards disaggregation: the creation of smaller and smaller units. NHS Trusts, locally managed schools, executive agencies in government – everywhere the moves were towards smaller, more focussed and usually more autonomous organisations carved out of previously larger monoliths.
But since the early noughties this trend has reversed. Central government has seen a series of mergers – the biggest being Jobcentres Plus (created by merging the Employment Service and Benefits Agency), HM Revenue and Customs (merged Inland Revenue and HM Customs) and the National Offender Managements Service (bringing together the Prison Service and what were previously 43 local probation services). In Health NHS Trusts have merged on a massive scale to the point where many provider trusts are now roughly the same size as the NHS Districts they were carved out of back in the early 1990s. Proposals the merge police forces into larger regional ones have faltered, but everyone expects it is only a matter of time before they re-emerge. Even the ‘quality police’ – inspectorates and audit bodies – have been the subject of a wave of mergers.
Local government is thus merely the latest in a long series of examples of ‘big is beautiful’ moves. Interestingly, one of the key alleged motivators is efficiency – merging back-office services, economies of scale, etc. Ironically, this was also one of the key alleged drivers for breaking up organisations – smaller, more focussed organisations would be more efficient than lumbering bureaucracies – as Carole Johnson and I have pointed out in our extensive analysis of this trend (Public Money & Management 2007 and Public Finance 2006). As our friend Nick Manning (then at the OECD) pointed out this was a marvellous wheeze – you get efficiency when you break things up and efficiency gains when you put them together – talk about win-win.
The underlying cause of these cycles – this is not the first and it won’t be the last and they happen in the private sector too – is the permanent tension between ‘division of labour’ and ‘coordination’ in human organisations. That’s what you get for building organisation staffed by Paradoxical Primates (see my book of that title).
STATECRAFT - improving government 
This takes me back to the mid-1990s in Victoria, Australia. Where we had a gung-ho Premier intent on reforming government at the state and local level. Local government in Victoria became a lab for some extreme experiments – the removal of elected Councils (local government exists in Australia as statutory authorities of state governments not in its own right), state-government imposed reductions in property rates, a spill of all Chief Executives and a massive merger program – 211 councils merged into 79 over less than 18 months!
Did I forget to mention the introduction of compulsory competitive tendering at the same time? The Victoria version was far tougher than the UK one: at the peak councils had to subject 50% of expenses (and accrual accounting was adopted at the same time) to competitive tendering. This meant, in practice, the most councils had to tender most services. In this heady mix, of course, was the practicalities of these mergers – one I studies invovled seven councils coming together almost overnight, all with separate (and often contrary) systems and processes. The current changes in the UK will be interesting indeed.
Colin I am really enjoying reading the blog from down here in Australia. If you are interested in some musings on Australia check out my blog at:
http://pmaustralia.blogspot.com/
Best wishes
Janine
I work in a government that was consolidated in the early 1990’s (from the merger of county and city government). While not perfect and always clean, it has seemingly worked pretty well. But of course, there are folks that 18 years on are still bitter about their loss of “their own” government.
In response to Ben: I am not “for” or “against” what we call ‘unitary’ local government in principle. The point of our studies is that in all public organisations there are permanent tensions, e.g. between focus and specialisation on the one hand and coordination and efficiencies of scale on the other. Ditto for small, responsive, local government and bigger, more strategic, authorities. The “problem” is these are irresolvable tensions – paradoxes – that tend to cycle between different configurations: small, localised and responsive gets criticised for being too parochial, inefficient and not strategic so it gets replaced with bigger; which gets criticised for being too remote, cumbersome and unresponsive – and round we go again.