The quirk ethic

Why does one council spend more per tenant than a nearby registered social landlord on managing and maintaining its housing? Why is a council running a housing benefits processing department remarkably similar to that of its neighbour, yet separate? Could a council housing provider buy repairs, paint or energy more cheaply?

These are the questions Barry Quirk, the chief executive of Lewisham council, will be asking as the government’s new “efficiency czar”. For two days a month, he will be in Whitehall, troubleshooting state spending and advising on efficiency in local authorities.

Quirk will effectively be a kind of super-consultant. His task is to “share and promote best practice on the ground”. He says this means working with councils to ensure efficiency gains are realised and working with Whitehall to line up departments’ own efficiency programmes with what they expect from local government. But who is Quirk and why is he so qualified to tell other councils how to save money?

He’s certainly got a big brief. In the July spending review, the government allotted councils some £6.5bn of the £21bn that is to be sliced from the running costs of local authorities by 2008 – this means they have to secure efficiency gains equivalent to 2.5% of their budget over the next three years. Of every £1 of efficiency saving, 40p is to come from schools, 10p from the police, 35p from social services, housing, highways and other services and 15p from administration costs. Council housing and RSLs are expected to make about £800m of savings by 2008.

Quirk says he is talking to people in the Treasury and the Office for Government Commerce rather than writing reports, giving civil servants, as necessary, “a reality check on what practically can be achieved”. “It’s crucial to represent local government within Whitehall so that its plans for efficiency have the bite of realism,” he says.

Quirk’s twin is Tim Byles, chief executive of Norfolk council, who is coordinating local government’s rethinking of how it buys goods and services. Byles, the London Government Association, the Improvement and Development Agency and Quirk have a common task: reminding Whitehall of things like budget-setting dates and how they align with councils’ reporting requirements.

This needs “sharp-end experience”, says Quirk. This he certainly has, having been chief executive of Lewisham council for a decade. But he’s no stranger to central government; previous assignments include casting an outsider’s eye on HM Customs & Excise and on the Treasury itself, so Whitehall knows it can trust him.

Its trust is based on Quirk’s longevity and track record at Lewisham. His decade at the helm makes him something of a grand old man in London terms, where there is still a relatively higher rate of turnover among council chiefs than elsewhere.

Thanks to him and to steady political leadership (Lewisham has been moderate Labour for many years), the borough won for itself a stout reputation for basic services in the 1990s. It put itself on the map by opening its doors to the television cameras and, so far, has avoided the hubris that comes from self-promotion. Although not the best council in London, Lewisham remains a strong and consistent performer.

It’s no secret that Quirk has considered and been considered for a number of other jobs, both heading other councils and regulatory bodies, but he’s stayed put at Lewisham, deeply immersed in his patch. Born in Bermondsey, he lives in the borough and remains fascinated by the nuances of its public administration – to which he brings the eye of someone who has not only done the management job but also thought and written widely about it.

So Lewisham is familiar with efficiency. Indeed, the borough’s directly elected mayor began a programme called Inspiring Efficiency a full 18 months ago. But is it really news anywhere? Hasn’t it been the message for decades? Quirk’s response to this is that councils sometimes focus on their annual budgets but may not “work through to ensure genuine efficiency and productivity in the specifics of what we do”.

“A multi-purpose unitary council may be providing 200 different services; it will know the performance indicators but not the relative efficiency with which each service is delivered,” he continues. “When best value was introduced, the criticism made was that it lacked strong competition and challenge. There was lots of benchmarking but not sufficient challenge. There hasn’t been, until now, a rigorous focus on efficiency.

People who know me know that I’m not a desiccated calculating machine

“Every organisation tends towards inefficiency. You have to be mindful of the age-old tendency of bureaucrats to increase the scope and scale of their organisation. You have to have an internal drive for efficiency.”

Quirk’s remit will cover the housing responsibilities of local authorities and, indirectly, RSLs. He explains: “We need to set up benchmarks. We’ll look at the distribution of the cost of managing the housing stock around the average; what is the relative efficiency of a given authority in managing and maintaining its stock? Against that, I have to ensure the ground rules for efficiency targets are realistic and make sense.”

But isn’t the efficiency agenda centralist, pulling decisions away from councils?

“Some things can’t be done at local authority level, true, but the efficiency calculation has to be done service by service,” says Quirk. “You could look at how well London boroughs resurface their roads compared with Transport for London [the agency controlled by the London mayor]. You could say, let’s aggregate up and have a single road-resurfacing body for the whole of London. But economies of scale don’t automatically follow.

“What matters most is the amount of competition in the market supplying public bodies. It could be that markets are less competitive at national or regional rather than local level. The centres for procurement excellence will be looking at all this, along with the OGC. We don’t want to have regional cartels. It might make sense to aggregate the commissioning of services but not in terms of market supply.”

Quirk will, however, be looking closely at bidding and transaction costs and the costs to councils of “maintaining competition”.

“In the past we have tended to think that if you replace public with private, it would just work. But you only get efficiency when there is real competition, not just substitution of one sector for another. “The reason we are in business is equity. The important thing about these efficiency targets for individual councils is that they keep the pounds they save. Efficiency gains are ‘cashable’.

“Lewisham has a target for efficiency savings. The government is not going to tell us where they are to be spent. Once the savings are made, it’s up to us where to put the money. We have a choice.”

He recollects the late 1980s when the Inner London Education Authority was being abolished. A survey asked people in inner London to rate their borough’s ability to take on primary and secondary schools – Lewisham came top.

“It came top because we had the best refuse services,” recalls Quirk. “No one believed that emptying the bins well made us a good education authority in any direct sense. But you get legitimacy if you are well run. People who know me know that I’m not a desiccated calculating machine.

“Efficiency, I believe, is a means; it gives you legitimacy to do other things.”