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Newcastle University London holds a workshop on how local governments cope with austerity, shock and crises

The workshop brought together academics, policy makers, the accounting profession, artists and public managers and aimed to discuss and contrast national and international experiences by looking at how municipalities have faced recent crises and austerity

On Wednesday 22nd November a workshop was held by Newcastle University London’s Director of Research Professor Ileana Steccolini alongside Professor Laurence Ferry, Durham University, to discuss how local governments cope with austerity, shocks and crises, with a global perspective on governmental accountability and financial resilience. The workshop opened with a projection of a video from the “The Austerity Playbook”, a new jazz musical drawing on Professor Laurence Ferry and Professor Ileana Steccolini’s research and stemming from the collaboration between jazz composer Andrea Vicari, writer Professor Mark O’Thomas and director André Pink. Prof Mark O’Thomas presented the contents and context of the musical, set in the mythical city of Burnside, which tells the story of how austerity unfolded, drawing on Ferry and Steccolini’s research on austerity in the North East and across the world. The video of austerity playbook can be accessed here, and the interviews here.

The first plenary session was held by Professor Irvine Lapsley, Edinburgh University, which discussed different forms of austerity and reflected on the possible implications of Brexit for austerity. Professor Laurence Ferry discussed austerity drawing on his experience of researching the reality of Newcastle Council and 70 local authorities across England and Wales, with a specific focus on citizens’ reactions and consultation processes and on the related implications for fairness and accountability. He highlighted four key points from his online animated video ‘Local Accountability for Public Money in a Post Brexit World’ that can be accessed here. These are the importance of financial sustainability, assessing financial and service performance to assure value for money, appropriate governance arrangements for place based accountability and the criticality of culture as every region has its own history, geography and politics.

Professor Ileana Steccolini then discussed austerity drawing on her experience of looking at the anticipatory and coping capacities that local governments deploy and develop to face it and adopting an international stance. She presented the financial resilience framework informing the book “Governmental financial resilience: International perspectives on how Local Governments face austerity”, recently edited with Martin Jones and Iris Saliterer and which presents 45 comparative cases of local governments from 11 countries. This research shows that different patterns of governmental financial resilience exists (from self-regulation, to reactive or constrained adaptation, to powerlessness and contentedness), as a result of a combination of internal capacities, perceived vulnerability and external factors.

Participants then headed into a panel discussion where three main questions were addressed. Is austerity over? What has austerity meant in different countries and organisations?, What are the key lessons learnt from dealing with austerity? What could have been done differently if we had known then what we know now? and What are the key organisational challenges and opportunities going forward?.

Summary of the panel discussion

1. Defining austerity: is austerity over? What has austerity meant in different countries and organizations?

Austerity appears to be an umbrella term, which refers to different phenomena, within and across countries. However, austerity is not a global term, for some e.g. Ireland, the focus is on the deficit. Also, in developing countries the focus is not on austerity but economic development and growth.

Under a short-term view, austerity has meant serious cutback measures and intensification of fiscal restrictions and constraints on public finances. While this has affected most European countries and developed economies, austerity appears to have translated differently in different contexts and countries, with some appearing to be more exposed (e.g., Italy, UK) and others being able to buffer it more (e.g., Austria, France, Sweden). At the same time, some countries appear to be still experiencing austerity (Italy), yet in other. However, under a long-term view, austerity appears to be very much alive in many countries, if more broadly defined as a constant challenge to reduce expenditure, to question budget allocation, to use scarcity as a reason to reform public organization. Austerity is increasingly becoming the “new normal”, bringing about (or requiring) new behaviours and approaches that are becoming routines.

2. Lessons from austerity: What are the key lessons learnt from dealing with austerity? What could have been done differently if we had known then what we know now?

In general, there is no single best way overcome austerity or, more generally, shocks.

LGs are not uniform and responses are context dependent. ‘Good austerity management’ refers to efforts that connect to the local cultures and belief systems. However, adopting a long-term view, governments do not need to invest solely in trying to predict new crises and create procedures to absorb them. Crises are typically unforeseen one-off events. Thus, rather than investing in predicting the unpredictable, the most successful organisations are the ones who have managed to enhance organizational resilience in the face of shocks. 

3. Future challenges and opportunities

Going forward the main challenges at a macro level refer to addressing inequality in society, the issue of a growing elderly population, and managing rising demand for public services with scarce resources, Brexit, the simplification of structures and rules in order to ensure higher flexibility, the rethinking of roles and boundaries of governments. At a micro level, the challenges refer to:  the tensions between the need to deliver quick-wins to restore the fiscal balance, and the need to win the hearts and minds of the employees to ensure long-term value creation; re-focusing the attention from mere financial and fiscal measures to non-financial measures of performance; managing shared budgets effectively; adopting new solutions for service provision and investments, also through pilot testing; developing and attracting new skills and competences, successfully enrolling citizens in public service governance, delivery and funding. 

Funding

The event was kindly funded by ESRC IAA, which was awarded to Professor Ileana Steccolini (Newcastle University)and Professor Laurence Ferry (Durham University).

published on: 1 December 2017