Alternative approaches to service deliveryHow can we do things differently?
Mark BandalliSenior Consultant, Mutual [email protected]
27th November 2014
Objectives
Identify & discuss the challenges currently facing Local
Authorities and the VCS
Outline the main alternative approaches to service delivery being
considered & implemented by LAs
Learn how these models work in practice
Suggest ways of ensuring VCS involvement in the planning and
delivery of services
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Who are Mutual Ventures?
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The challenges from a LA perspective
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Several years of budget cuts has meant difficult decisions for all
Councils:
Reduced overall staff numbers, primarily back office
Found ways to deliver some services more efficiently
Cut some non-essential front line services to enable focus on priority services
Entered into new service delivery arrangements, often with private sector partners
Continued cuts are now a real threat to priority front line services –
Local Government budget is to be reduced by £193m (4.2%) during
15/16
The challenges from a LA perspective
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Change around the margins won’t lead to the delivery of sustainable,
efficient and effective services
Most sustainable way to realise savings and maintain quality is to
radically rethink how services are delivered:
Push responsibility and accountability down to the front line
Effective involvement of VCS in the planning and delivery of services
Fundamental changes to behaviours and motivations of staff
Create culture of continuous improvement through small and ongoing adjustments
Challenges from a VCS perspective
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Increasing competition for funds:
Reduced levels of funding (Gov/LA/charity)
Consistently high levels of competition for funding
LAs may enter into new service delivery arrangements, often with private sector partners
Increased expectations/demand for services currently delivered by the VCS – doing
more with less
Limitations associated with 3 year funding programme & dependence upon
grant/core funding
Difficulties associated with winning a contract for the first time
Difficult to develop new services to meet emerging need, stifling innovation and
collaborative working
Opportunities for the VCS
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Pressure on LAs to increase service quality and work collaboratively with the VCS
LA responsibility to develop the market in specific sectors (e.g. Care Act)
Requirement for ADMs to commit to sub-contracting with local VCS providers
Ability for VCS agencies to develop consortia to respond to specific procurement
opportunities
VCS agencies required to tell a strong story about value, create new ways to
collaborate and rethink their business models
Contracting authorities can limit participation in a tender exercise for the award of
certain listed contracts, which include certain health, social and cultural services, to
VCS organisations and staff mutuals (Draft Regulation 77)
Share intelligence regarding upcoming opportunities
Proactively identify joint venture opportunities (VCS/non-VCS working together)
with LAs
Differing approaches to service delivery
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Increasing number of LAs considering various alternative approaches
to service delivery via options appraisals
LAs are considering the desirability, feasibility and viability of a
number of options:
Keeping in-house & re-engineering
Local Authority Trading Companies
Public Service Mutuals
Integrated commissioning model
Outsourcing
Joint venture with public or private partners
Alternative Delivery Models
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Have left the public sector (also known as ‘spinning out’)
Continue to deliver public services
Employee control plays a significant role in their operation
Public sector mutuals are organisations which:
Business Models: Ownership / Governance:Legal Forms:
Public sector mutuals can take a range of different forms (not exhaustive):
1 2 3
Profit
Not-for-profit
Social Enterprise
Community Interest Companies
Industrial and Provident Societies
Distribution of nominal shares
Part or all equity ownership
Joint Ventures
What are Public Service Mutuals?
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There are several benefits frequently associated with the option to deliver public services through the mutual model:
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Why consider this model?
Sustainability1 Greater opportunities for a service to access alternative income
streams outside public sector ownership
Resilience
2 Ability to move quickly to meet the demands of users and
respond to changing market for public services
Improved outcomes3
Ability to respond more quickly to user needs and take decisions closer to the service user
Reduce red tape
4 Current policies and practices within the public sector may be perceived to reduce efficiency / effectiveness of service delivery
Specialisation
5 Employees may wish to become more specialised in their role
within the organisation
Innovation
6 Culture or risk adversity within the public sector may have stifled
creativity and restricted innovation to achieve outcomes
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A growing number of mutuals are being created across the country – with a wide geographical spread
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Emerging landscape
2010 2012 Cabinet Office estimate 140 will be operational
by April 2015
Mutuals are operating in a range of sectors, delivering services from the front line to the back office
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Example of PSM involving VCS
Adult education service based in SW England
Drivers for change include reduced SFA funding (CL and AS), risk to the
continued delivery of community learning opportunities across the city
& changing learner preferences
Group of staff requested permission to undertake a feasibility study to
test the desirability, viability and feasibility of establishing the service as
a PSM
Business plan identified the preference for the involvement of 2
community partners (both charities) – forming a ‘Community Joint
Venture’
Both partners share the service’s priority of promoting adult and
community learning
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Example of CJV involving VCS
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Example of CJV involving VCS
Board of Directors
Responsible for strategic management, direction
and review of performance
Financial Director
VCS rep (1ii)
Staff Director (1)
Staff Director (2)
VCS rep (1i)
Strategic Service
Manager
VCS rep (2i) VCS rep (2ii)
Non-Exec Director (1)
Learner Director
Learner Forum Staff Advisory GroupAdvisory Groups
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Benefits of ‘Community Joint Venture’
Sharing of ideas/learning & innovation
Lobbying/common voice on issues
Peer support/mentoring
Access to management that are used to competing for business
Joint bidding for work – agreement of a shared investment appraisal tool
Incubation of new organisations – smaller VCS agencies
Back office efficiency
Agreement re competition / conflict of interests
Available support from Mutual Ventures
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Legal and governance support to establish formal/informal consortia
Support to develop and quality assure tender proposals and business
development concepts.
Support to help develop business plans, or audit existing business
plans;
Quick Guides to:
Public Service Mutuals;
Going for Growth;
Available via MV website (www.mutualventures.co.uk)
Available support
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Wales Co-operative Centre - Enterprise Programme
Mutual Ventures, in partnership with the University of Wales, Trinity Saint
David, deliver support via this programme;
Designed to provide an overarching structure to support the Social
Business Sector in Wales;
Aim is to increase the number, sustainability and growth of new and
existing social businesses in Wales;
Required to demonstrate the ability to increase levels of employment,
while at least 50% of income needs to be realised via trading;
http://www.walescooperative.org/social-enterprises-and-co-operatives
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