Management: Town halls' winning slogan: new chiefs, new performance

Theories may come and go but the view that corporate management is the way forward for local authorities is winning the day. Paul Gosling investigates how the pioneers of the approach are progessing.

The Government's schools improvement team shot itself in the foot last month when it criticised Hackney council's adoption of "fancy and trendy" management practices, and called on it to revert to a traditional approach that included a director of education. What the team overlooked was that the model adopted by the east London borough had been praised by government bodies, and held responsible for a big improvement in the performance of Kirklees council, in Yorkshire, which devised the structure.

A compromise has since been found that allows Hackney council to keep its new structure, while renaming one of the management team "director of education" instead of "director of schools". The Department for Education and Employment has dissociated itself from criticism of the management changes, and the improvement team chairman, Richard Painter, has become unavailable for comment.

The local row would have had widespread repercussions if a negotiated solution had not been reached. Hackney is only one of a raft of authorities, including Leeds and Islington, to have adopted the corporate model. The government-funded Local Government Management Board has endorsed the structure, it has been applauded by Birmingham University's Institute of Local Government, and Kirklees's district auditors have praised improvements in performance and strategic direction resulting from it.

Corporate models are likely to be even more widely copied if the Government- backed private member's Bill from Lord Hunt is passed, which would open the way for Cabinet-style control of local authorities, dovetailing political and management reform. And the Government's "Best Value" initiative requires participating council's to adopt a means for corporately reviewing performance.

Rather than being merely "fancy and trendy", the corporate management model seems to be an idea whose time has come. Kirklees introduced its new structure in 1990, having recognised that the authority had become weighed down by departmentalism and short-term political decisions.

"There is now a lot more cross-service working," a Kirklees spokesman says. "Before we had about seven councils in one. Departments did not talk to each other - they probably didn't even like each other."

Kirklees retained the post of chief executive, but abolished all the departmental chief officer positions. There are now five executive directors, who sit with the chief executive on an executive board, to ensure that council policies are implemented across all departments, to oversee performance management and to provide long-term strategic thought. Strategy is ultimately still the responsibility of elected members, but councillors' own executive group meets regularly with the executive board to determine strategic direction.

"The whole idea of the new structure is for elected members and senior management to be working jointly," Kirklees's spokesman says. "We wanted to break down the traditional officers versus members relationship. It is more of a partnership now."

To guarantee that executive directors are not bogged down by departmental commitments and loyalties, they have no direct service responsibilities. Instead they oversee the work of 35 chief service officers, including a chief fire officer and a chief education officer.

Heads of services are paid less than a departmental director would expect to be paid in a comparable local authority, and there is a flatter hierarchy than in the traditional council. Heads of service are paid between pounds 32,000 and pounds 50,000, while the executive directors, other than the chief executive, are paid between pounds 50,000 and pounds 70,000. Rates of pay were determined after a review conducted by Hays.

Carole Pattison helped to implement the structure in Kirklees before being employed as corporate projects manager by Leeds council to introduce a similar arrangement there. "I was working in Kirklees before that system was set-up, and I saw the improvement," she says. It made officers more committed to implementing policies, and gave politicians an environment to take better informed decisions in her opinion.

"It has strengthened both arms of the administration to take a corporate and strategic role," Ms Pattison says. "Members' structures have never been a forum where they can sit and debate strategic matters. Strategy is always at the end of a discussion, not at the beginning. This structure is designed to allow them to discuss ideas and take a strategic and pro- active approach. Officers and members work well together."

While Leeds has copied the outline structure, its executive directors also have responsibility for overseeing particular services. Some observers believe this approach is more effective but others argue that it has allowed the problems of departmentalism to continue. Islington is not giving its executive directors service responsibilities, but is giving them responsibility to ensure that the council meets "Best Value" and other performance targets.

This radical re-shaping of council bureaucracy will come as a shock to many, not only to schools improvement teams. But it is in line with moves internationally to overhaul public service management, and to give greater focus to performance management. It is unlikely that councils will turn their backs on it now, whatever some outside voices say.