Perspectives

Episode #1 - Places, people and public services: Sir Howard Bernstein in conversation with Rebecca George OBE

Talking Public Sector

In our first episode, we discuss places, people and public services with Sir Howard Bernstein.

Sir Howard joined Manchester City Council in 1971 as a junior clerk and rose though its ranks to become chief executive, serving a total of 46 years for the city. During that time, he became well-known as one of the chief architects of Manchester’s resurgence.

Rebecca George OBE leads Deloitte’s work with government and public services clients across the UK. She has worked extensively with central government departments such as HM Treasury, the Cabinet Office and the Department of Health and Social Care as well as the broader NHS.

During this episode, Rebecca and Sir Howard discuss the challenges of leading place, the importance of vision and how to put people at the centre of change.

Speakers

Rebecca George OBE
Vice Chair and UK Public Sector Leader

Rebecca leads the UK Public Sector practice in Deloitte, supporting government to drive large-scale, complex transformation programmes, for the benefit of the UK’s citizens.

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Sir Howard Bernstein
Strategic Advisor

Sir Howard Bernstein serves as a strategic advisor to several public, private and academic institutions in the UK and internationally specialising in health and social care, government reform and devolution, and regeneration.

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Transcript

Rebecca George (00:00:04): Welcome to “Talking Public Sector”, Deloitte’s podcast on government and the public services. This series features conversations with Public Sector leaders as well as insights on the big issues facing their organisations.

Rebecca George (00:00:21): Hello everyone. My name is Rebecca George and I lead Deloitte’s work with Public Sector clients in the UK. One of the best parts of my job is spending time with people who run the Public Sector, whether they’re in government departments or public services or other agencies. And what fascinates me is their different approaches to leadership – how they energise their teams, how they drive change, how they deliver in an environment that is often challenging and under intense levels of scrutiny. So I thought why not talk to some of the UK’s most celebrated Public Sector leaders and find out what makes them tick. And that is exactly what we’re going to do in this podcast series. To start us off, I’m joined by Sir Howard Bernstein. Sir Howard is of course legendry in local government and regional devolution circles. He joined Manchester City Council in 1971 as a junior clerk and rose through its ranks (to) become Chief Executive, serving a total of 46 years for the city. During that time, he became well known as one of the chief architects of Manchester’s resurgence and before stepping down in 2017, he led the establishment of the Greater Manchester Combined Authority as well as the development of the Northern Power House. I’m very pleased to say that since then, Sir Howard has been working with us at Deloitte, advising our clients on issues like devolution and regeneration. Sir Howard – welcome to our podcast.

Sir Howard Bernstein (00:01:55): Hi Rebecca.

Rebecca George (00:01:57): So Howard, we’re going to zero in on leadership in a specific context today – leadership of place. How would you define that as a challenge?

Sir Howard Bernstein (00:02:07): Leadership of place – huge challenge today. I would identify two key influences on that – first of all, globalisation – what that has meant in terms of new emerging economic markets, new trade, new investment platforms, how we actually handle climate and environmental pressures; and at the same time recognise the disruptive impact globalisation, particularly through technology has had on our traditional view of industries and economic growth. On the other hand, the other side of the coin is what perhaps some of the impacts of globalisation have been – rising inequalities, more and more people feeling as that they’ve been disconnected from that pathway of success, fragmented educational systems, skills deficits and all of that comes together in my view by an increasing awareness, not just in this country, but I think in many parts of Europe in particular, that people want to have more say, more influence over their life chances, over the way in which spending priorities are actually determined.

Rebecca George (00:03:38): And value’s a challenge also because of demographics isn’t it? So, you know, young people vs old people and what they want.

Sir Howard Bernstein (00:03:44): Yes, young people want to have more say and they are I think, by and large, prepared to, by definition, take a longer-term view of fiscal priorities. On the other hand, you have older people who are worried about their legacy, their short-term impact of changes in priorities and perhaps changes in fiscal priorities. So there are clear tensions, clear dilemmas in all of that. But in general terms there is, I think, a consistent theme about what globalisation brings, not just the opportunities, but also the threats and the absolute requirement to do a lot more to combat those threats and turn globalisation into huge opportunities.

Rebecca George (00:04:34): I couldn’t agree more and I think we have a great opportunity actually, in post-brexit Britain to do more of that. Let’s talk a bit about growth. It seems to me that the government’s vision or at least its pre-brexit vision was for local government and combined authorities in particular to drive local growth. What’s your response to that and how do you think local leaders ought to be approaching that?

Sir Howard Bernstein (00:05:00): I think there’s a number of things I would say about local leadership. First of all I think we need to be clearer about what we mean about local leadership of place which is not the same as leadership of organisations, certainly where the public sector is concerned. I think we should be celebrating a lot more, the many examples we see in this country which through Deloitte (we’re privileged to work with) where we see real evidence of energy and drive from locally democratic politicians working with business leaders, working with communities and repositioning their areas for the opportunities which globalisation brings. I don’t think we incentivise that local leadership enough. We should be allowing and encouraging those places which are growing their economies and to encourage them to grow their economies more by enabling them to capture the proceeds of that growth so that there is then a direct, causal relationship between the resources they have to spend and the growth they are actually driving and also, I think as well, we should be rewarding and incentivising more local place leadership in terms of how they engage or the public service providers, the health and social carers are particular examples. The rising demand for high dependency services is unsustainable, not just because of austerity, but because of the growing fiscal pressures in the future – how do we actually develop new early intervention, how do we develop new commissioning arrangements at local place level. How do we actually join up our health and social services and our public services of a more effectively a place level in order to ensure that they are people-centric, people are placed right at the heart of those services so they’re encouraged to go into work and progress, build up their personal responsibility, their personal resilience rather than possibly increasing reliance on the state.

Rebecca George (00:07:18): So I think that’s a really great point. I, for a long time, felt that if local leaders’ primary responsibilities to their own organisation is going to drive a different set of behaviours to the ones that you’re describing which are very much about how can we enhance the living conditions and opportunities for a population. I’ve seen a lot of that especially in the health and social care arena. But the incentives are important and I am not sure we’ve quite got those right.

Sir Howard Bernstein (00:07:52): I think we’re moving in the right direction with the re-localisation of business ranks. I think in principle that’s something to be welcomed – it still has to happen, but there is commitment across the political parties to ensure that does happen. When that does happen, we can then start to join up a lot more of the proceeds of growth with the requirement to generate growth.

Rebecca George (00:08:19): So you’ve mentioned already that really important link with people and growth and connectivity with local leadership and you have also mentioned inequality. We do struggle don’t we in this country with inequality and with social mobility. What would you say that how we start to shift that dial – how can you deliver the growth that everyone benefits from?

Sir Howard Bernstein (00:08:46): We talk about it but we still have to do so much more to really get to grips with that. There is no such thing, in my view, as a trickle down approach. It requires different levels of interventions. There is a big debate going on at the present time around towns and cities which we’ve been reading about in the press – the importance of driving city growth and that it shouldn’t be an expensive growth in towns. Well of course it should - we need both. We need all towns and cities to be achieving their full economic potential. This isn’t an either-or situation, it’s a question, really, of how we do both. And I think we do both by re-thinking what the role of places actually are, whether you’re a town or a city, you will never be able to return to a position which, say, Manchester was 20 or 30 years ago when some of the challenges some of my generation faced in leading the city around the loss of huge ways of manufacturing and production capabilities – that’s been lost. So what you’ve got to do is start to address new sectors of growth; investing now means investing in innovation, investing in technology and commercial prevention, science-based activities. Those are all aspects of economic performance which this country still excels in and which we have the opportunity to create hugely distinctive economic centres of trade and investment internationally. We have got to do a lot more than that, but equally, what we have also got to do is to see the centre let go a lot more around not just the purse strings but also the overall level of responsibility they wish to discharge for different places in this country. It’s the devolution debate. People are rightly saying that we still have to most centralised system of decision making to be found in the western world. It wouldn’t be so bad if it worked – but it doesn’t work terribly well, particularly doing the difficult stuff in encouraging people into pathways, into work (employment), which is the key to long term success, economic success (and) productivity and also people taking more responsibility for their own life chances.

Rebecca George (00:11:30): So on that particular point on centralisation I just wondered if you had any comments about education because I do think that getting the foundation levels education right is a key component of addressing some of the social inequality issues that we have. Do you have any views around the role of local policy makers in delivering excellent education for all?

Sir Howard Bernstein (00:11:57): I have never been a passionate advocate of local government getting too much involved in what happens in the classroom. I think that is around properly to do with leadership of schools and the effectiveness of what happens in the classroom. What I think we’ve missed particularly with the fragmented nature of the way in which education services are now delivered right across the piece we have lost that sense of schools being the anchors of communities. The time, years ago, when schools were almost the absolute platform for local achievement, the way in which there was real connection between the school and the community, I think we have lost quite a lot of that over the last decade or more. And I think, there is an opportunity to re-balance that debate so that schools not only remain focussed on what happens in the classroom but also have wider responsibilities about how they promote active citizenship, how they become strong community coordinators in the way in which the capacity within communities is enhanced. I think that’s something we need to re-balance.

Rebecca George (00:13:27): I agree and I’ve always been very interested in that journey – school, FE (further education), higher education and the link with business and local business. Certainly, you know, when I was growing up in the 1970s, our schools and colleges where I grew up had very strong links with local business and there was lots of interaction between them. Somehow that seems to have been lost. I’m not suggesting that we should have the same model as Germany, but I do quite like the idea that local businesses looking to a local workforce of the future and thinking about the skills to bring through and having some kind of interaction.

Sir Howard Bernstein (00:14:07): I think that interaction is fundamental and it goes right to the heart of capacity building, where we need to think much earlier than what we do now about pathways between the classroom and the workplace. I think that is part and parcel of how we need to re-think the way in which some of our key services are provided.

Rebecca George (00:14:30): Okay. Let’s move on to talk about a little bit of a naughty issue which is always a bit tricky – the money. You’ve been involved in using a number of financial instruments over the years to shape investment in Manchester and you’ve been very successful at getting that inward investment, not least in transport and housing. Tell us about your experience of finance and investment in places going forward.

Sir Howard Bernstein (00:14:57): I think what we’ve got to do is reduce our dependency on grant – public grant. What we should be thinking more about is whether its revenue spending, about how we invest to save. There have been lots of examples on the back of the austerity programs that we were forced to execute several years ago where people invested slightly more in order to save more going forward. I think that’s a very good example. I think, also, there’s the example about how local places can do a lot more in developing their own business models to support growth. How they leverage more support from different housing providers, how they leverage more support from private sector institutions. I think that’s very important when you start to go back to the first point when talked about a bit around what are the incentives for growing the economy. So if we completed more commercial buildings, as an example, then one of the manifestations of that is more business rates. So if local authorities were able, therefore, to capture the full benefits of growth through business rates then they will have a greater capacity to invest some of their own resources in growing their economy to realise some of that business rate going forward.

Rebecca George (00:16:28): So what I am hearing, and what I agree with, is local leaders should take more autonomy for the kinds of local investments that they should be making – add a bit more risk, be a bit more ambitious. But what about infrastructure? Because that’s quite hard for local leaders, isn’t it?

Sir Howard Bernstein (00:16:46): Well, it’s very hard and I think there’s a limit to what you can do even in our big city regions. In Greater Manchester, I know there are now more examples in other parts of the country, we created our own local transport fund which generated an investment capability of just less than £2billion over a ten year period. Not everyone can do that and therefore, part of the answer has to be that we need to re-think nationally the priority we make or attach to infrastructure investment because it’s more important than ever it seems to me that people, wherever they live, need to be connected to jobs and businesses need to be connected to markets. So, how we invest in transport in the next 10, 20 years in my view is largely going to determine the overall impact on our economic competitiveness as a nation.

Rebecca George (00:17:42): I’ve always been interested in the interaction between urban and rural communities and I don’t think it’s really possible anymore to separate the prosperity of a region, as you said earlier, from that of a city or indeed a town. So I think, actually, how we work that infrastructure, the link between those places is becoming increasingly important.

Sir Howard Bernstein (00:18:07): And it’s a great opportunity with the growth and development of faster trains, you know, people are more mobile or fundamentally should be more mobile. The problem really is because some of the antiquated (still) transport systems we’re having to operate in many parts of this country that mobility is restricted and that can’t be a good thing.

Rebecca George (00:18:30): I agree with that. I don’t think it can. So you’ve talked about the context in which leaders need to think about place, you’ve talked about growth and the people to mention of that and you’ve talked about investment. As a leader, how do you bring all those very disparate elements together?

Sir Howard Bernstein (00:18:48): It’s around long term planning, but also having a clear vision which is grounded in the strengths and the weaknesses of the local economy. One of the things that we did several years ago, and that was high risk at the time, was to bring in a group of independent economists to come in and check what was the economic positioning of Greater Manchester and I’m pleased to say other places have done that subsequently since. And that was quite a valuable exercise because we thought we were doing rather well but they said, “Well you’re doing okay but not as good as you should be doing. You are underperforming in some particular areas.” They attached, for example, a much higher priority on the whole health and social care as a driver of economic growth than perhaps we had done before. So having a vision which is grounded in evidence, which is grounded on opportunity as well as overcoming weaknesses is fundamental. I think the third characteristic is place leadership being collaborative. It’s about establishing partnerships not just with the business community but also with the wider resident population. Resident engagement now is so important. People demand a lot more to be involved. The emergence of new social platforms is just reinforcing that trend. So as you develop your priorities, your spending programs you have to take people with you, you have to take business with you because they are going to be ultimately investing in that vision, in that program to turn it into reality. And I think, also, the final point is being very clear about how you measure success, having your own key performance indicators, having your own capability to monitor effectively the performance of delivery is I think essential to success.

Rebecca George (00:21:09): I think that having those sorts of measures is very important and building them into a narrative with the citizens of your local place so that you can constantly be reminding people this is what we’ve done and this is what we’re going to do. But how to get that balance right with being realistic? I mean, clearly, leading Manchester, you had some huge advantages. Not everywhere is going to have the same kind of investment advantages or growth advantages like Manchester. What would you say about how you position that narrative with other sorts of places?

Sir Howard Bernstein (00:21:44): It’s being clear about what your assets are. You and I agree now everywhere has got an international airport, a world class university. But take the universities – we had three in Manchester, 15 years ago and we decided to create two universities to needed to be merged. And we’re working in different places around the country at the moment where many of the assets in those places i.e. the young people who live in those places are not being in my view properly identified and recognised in the way in which policies are being driven forward. The opportunities to work with young people create new work models, the opportunities to create start-ups, the opportunity to grow and diversify a business space over time. The way in which young people living in town centres and in start-up businesses will, of themselves, start to create new demand for amenities and diversify the offer in those town centres, are clear and not everywhere is doing that. So it is about understanding the real assets of each place and every place has assets. Everywhere.

Rebecca George (00:23:07): I think that’s true. I’m not sure that we necessarily celebrate that enough. Let me just turn briefly to the difficult aspect of leadership. When you’re in a key public sector leadership position, difficult decisions have to be taken as well as the kind of nice ones about growth and doing new things and putting incentives in place. What advice would you give to people about when you have to make the difficult decisions, terminating a contract or calling people to account for not delivering something or needing to intervene when external events cause a change of direction? What about stopping doing things as well as starting doing things? What would you say about that?

Sir Howard Bernstein (00:23:58): It’s about the culture of the organisation, the culture of the place. Not delivering outcomes, poor performance shouldn’t be tolerated, it’s unacceptable. It’s been clear that that is an outcome that will be dealt with before it happens which I think is something which is not always the case, very clearly. When you are investing in new service models there has to be an element of some double running in order to protect citizens and their priority needs for accessing public services. But that should be for as short a time as possible. We see so many national initiatives where double running becomes the norm almost after two or three years – that cannot be right. And we’ve seen lots of examples of how local places in responding to the austerity programs where they’ve withdrawn from certain services and invested in others and as a result improved the outcomes for local people. So it is about clarity of purpose, it is about saying what’s right, what’s wrong and it’s also about securing a consensus within the place among other public service leaders that they share those values and they’re going to be judged in the same way as we would want to judge our own staff.

Rebecca George (00:25:33): That’s great advice actually for the up and coming leaders of the future in public service. I just wondered if there is anything else you would add, specifically for the next generation of leaders coming through who are going to have potentially a very exciting opportunity for regeneration and building of place around the UK.

Sir Howard Bernstein (00:26:01): I was told 20 or so years ago that what constitutes good local government is not just about organisational excellence. It’s about how you create places where people want to live, work and invest. In my view, that is as true today and it will be as true in 20 years’ time as it was when those comments were made to me some time ago. So local governments (and) other public service providers need to think of their organisations and their contributions to that overall objective and it’s the role of place leaders, I think, to actually lead that process of change.

Rebecca George (00:26:46): Howard, this has been a really thoughtful discussion on what leadership needs in the context of place. I particularly love your passion for people and your passion for making places which are going to deliver better lives to the people that live in them. It’s fantastic. So I would like to say thank you very much for joining us today. And thank you for listening to our podcast and I hope you will join us next time! Bye for now.

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