delivering services differently wednesday 10 th july 2013

Delivering Services Differently

Wednesday 10th July 2013

Conference Chair

Cllr Anthony McKeown, Deputy Leader, High Peak Borough Council

Transforming Public Services

Presentation to East Midlands CouncilsWednesday 10th July

William BurgonPolicy and Commercial Advisor, Cabinet Office

Transforming Public Services4

TransformationWhat We Mean


Transformation=

Structural Change


TransformationCase for Change


Significant financial constraints

Restrictive bureaucracy

Untapped commercial potential

High quality services fit for the 21st Century

Motivated and empowered staff

Revenue generation for HMG and the

taxpayer


TransformationStrands of Work


Digital Services

Alternative Models

Commercialisation

Workplace


TransformationCross Government


Transformation is taking place across government


Commercial ModelsMission

We help identify, develop, and deliver the best business models to achieve better public services



Commercial ModelsPrinciples

Our work is driven by a number of core principles, which guide how we deliver projects



Commercial ModelsApproach


Each opportunity, whether in central government or in the wider public sector, is approached on its own merits


Commercial ModelsTypes of Model

All models have their own advantages and disadvantages; in each instance, we explore which is most appropriate and how it should be applied


Outsourced

Service contract

Mutual

Mutual JV

Privatise

HMGIn House HMG /

PrivateHMG / Mutual

HMG / Mutual / Private

HMG Joint Venture


Commercial ModelsSuccesses


We have recorded some impressive results already, with a lot more to come within the lifetime of this Parliament


Commercial ModelsContact Us


Read more on GOV.UK and the Mutuals Information Service, or get in touch with the team

Online

Search ERG on GOV.UK

mutuals.cabinetoffice.gov.uk

Twitter

@mutualsgovuk

Email

[email protected]


TransformationQ&A


Q&A

Making the Right Choice

Anja Beriro, Browne Jacobson LLP10 July 2013

Content

• Strategic Context• Strategic commissioning• Different delivery models• Undertaking an options appraisal• Your role and who to involve

Spending

Austerity

Politics

Public sector reform

Risk v capacity

Strategic commissioning

Main delivery models

• In House provider• Shared services• Private Sector Operator – not today• Joint Venture• Social Enterprise• Trading company

Options appraisal

Provides a framework for:

• Identifying the different ways outcomes might be achieved

• Systematic process• Evidence informed case for change• Transparency : sharing the decision making

process and outcomes with others

Key issues to consider • Establishing the strategic need. • Establish the range of resources available. • Establishing the key outcomes and objectives you want to achieve in

terms of meeting the strategic need. • Establish your ‘do minimum’ or “baseline” position. • Establish your organisation’s position on risk transfer. • Develop your evaluation criteria for the long-and short-listing

process. • Identify the full range of options, which may be available to deliver

your desired outcomes and objectives. • Create a short-list from a high level option appraisal. • Evaluate fully the short-listed options against the evaluation criteria. • Progressing the preferred option

High level appraisal criteria

• Improved quality of service• Improved efficiency• Quality of employment• Corporate impact on the authority• Sustainability and growth• Added value• Speed of implementation• Flexibility/scope for collaboration• Governance (LA ‘control’)

Who should be involved?

• Politicians• Overview and Scrutiny• Senior Managers• Commissioning staff• Service staff• Other staff within the organisation• Service users• Members of the public

Joint committee

• S101(5) and s 102 Local Government Act 1972 - full Council functions • s9EB Local Government Act 2000 and subsequent regulations –

executive functions• Discharge of functions or advice on discharge of functions• Members of JC are elected members of the delegating authorities –

tasks carried out by officers• Purely administrative arrangements – no contract, therefore outside

public procurement regime• No corporate status so need “lead authority” for any contracts with

third parties – these may need to be procured • Documented in a governance agreement• Examples include regional procurement bodies such as ESPO and

YPO• Much simpler than a corporate structure but without protection of

limited liability

Delegation

• S101(1) Local Government Act 1972 – full council functions• s9EA Local Government Act 2000 – executive functions• From one authority to another which has same functions• Again an administrative arrangement keeping it outside public

procurement regime• BUT – recent ECJ case Piepenbrock C-386/11 setting out clear

reminder of what a true delegation means– It is not the same as control over a Teckal company– It is not the same as Hamburg Waste judgement (next slide)– Cannot have a supervisory role

• True delegations must give over all responsibility for delivering service to the delegatee

• Delegator can withdraw delegation at any time• Difficult balance politically

Hamburg Waste judgement

• Different type of public-public co-operative working

• Very little case law but being set out in new Procurement Directive

• Between two or more public bodies:– To facilitate genuine cooperation to perform a public task– Not to advantage any particular private entity– To reimburse the costs of carrying out the tasks – With a distribution of tasks (not necessarily equally)

between the authorities– With no private sector involvement in the agreement

Issues to consider - corporate• Governance arrangements: staff ownership; user

representation; local authority involvement;• Income/funding: trading; grants; contracts;• Distribution of profit / surplus;• Asset Lock;• Market maturity: sufficient choice of suppliers;• Risks;• Procurement strategy;• Regulation requirements;• Power to trade?

Choice of structure

• Incorporation required? (see later)• Companies

– Limited by shares– Limited by guarantee– Community interest companies

• Industrial and provident societies• Limited liability partnerships

Other issues

• The role of members (“owners” not elected)• The role of Directors• Conflicts of interest• Governance and decision making• Dispute resolution and deadlock• Appointment of new members• Resignation and termination• Funding• Role of executives• Confidentiality and FOIA• Impact of procurement law on the above

Public procurement

• Local Authorities are as a matter or principle subject to EU procurement regime.

• The EU procurement regime applies to the award of certain types of services contract when their value exceeds £173,000

• Accordingly, when considering the establishment of a shared service the implications of the procurement regime must be considered.

• There is no automatic exemption purely because the contract is between public bodies and a procurement exercise may still be required.

Teckal exemption

• Where services are provided by an organisation which, although legally separate, is "economically dependent" on the buying authority to such an extent that it would be inappropriate to make their dealings subject to the EU procurement rules.

• This is known as the "in-house" or “Teckal" exception, established by the case Srl v Comune de Viano and Azienda Gas-Acqua Consorziale (AGAC) di Reggio Emilia (C-107/98) [1999] ECR I-8121.

• The case establishes the principle that, to benefit from the in-house exception, the buying authority must be satisfied that the authority selling the services is a captive entity, that is, the selling entity:– Carries out the principal part of its activities with the relevant authority.– Is controlled in a similar way to that which the relevant authority

exercises control over its own internal departments. – Is funded wholly or mainly by the controlling authority.– Has no private sector participation or financing (although private sector

directors are permitted if their role is to provide expertise to fulfil public interest objectives).

Multiple controlling authorities• Possible for more than one local authority to

be a member of a Teckal company• Although no individual authority needs to

have sole control of the company, the participating authorities must have ‘decisive influence’ over strategic objectives and significant decisions

• Decisive influence can be present even where it can only be exercised jointly alongside other public authorities

We are a national firm with a track record of delivering solutions to our national and international client base. We have experience across a wide variety of sectors and a client portfolio to be proud of - including blue chip corporates, major insurers and public sector organisations including over 150 local authorities We have a national reach from our offices in Birmingham, Exeter, London, Manchester and Nottingham.

This Seminar and supporting materials are prepared solely for training purposes and are not a substitute for legal advice.

Anja Beriro, Associate

T: 0115 976 6589 / 07796 343136E: [email protected]

mailto:[email protected]

mailto:[email protected]

Rushcliffe – great place, great lifestyle, great sport

Rushcliffe Borough Council

– Growing a social franchise

10 July 2013Neil Clarke, Leader


Introduction

• Background – drivers for change• Our approach – planned and

considered• Growing Streetwise into a social

franchise• Lessons learnt from our journey so far• Group discussion and feedback


Drivers for change

The challenge faced by many councils and elected Members

•Reducing costs (2.8 million) •Maintaining the quality of service•Providing a sustainable future for current employees•Contributing to the local economy


Our Approach – the 4 year plan

• Proactive approach – service reviews to consider ‘doing it differently’ and alternative delivery models

• Production of a ‘Four Year Plan’ to manage the funding gap over the four years by:

• Cost reduction• Income maximisation• Service Redesign

• Established a Transformation team to help drive the change agenda


Investigate /Procurement

Investment / Profit Share

Transition Support / Profit Share

Contracted Service

Direct ProvisionSocial Enterprise /

Cooperative

Efficiencies and Service Standards

Support / Merger and Growth

The future of service delivery


Looking at private sector business models


Looking at private sector business models

All of the brands are franchisesOffering consistent quality, service, pricing and environment


Emerging service delivery models

Social franchising is the use of a commercial franchising approach to replicate and

share proven organisational models for greater social impact


• 30 years experience of caring for the Borough

• Highly skilled workforce with a can do attitude

Taking care of grounds maintenance and street cleansing in the Borough


Why transform Streetwise?

Existing quality service, with strong local brand and potential to grow

Opportunity to do it differently Empower staff to have a greater say in their

destiny Retain social values, but with a more

commercial approach Greater freedoms to make decisions, trade,

market and innovate Develop the brand and services


How? – My perspective

Established cross party member group – overseeing the review:

Appointed Cabinet Member to lead Workshop to identify Members’ individual strengths

and commercial experience Member development programme e.g. social

franchising & business case assessment Addressing Member concerns – becoming more

commercial Portfolio holder briefings


How?

Review explored options of reducing costs, generating income or ‘doing things differently’

High level of staff engagement in process

Phased approach with review gate at each key stage


The journey so far

Identifying the skills and knowledge gaps Getting the right advice Establishing the governance structure Stakeholder engagement and support Changing the culture Developing the offer Testing the concept - dipping our toe in the

market


Streetwise Evolution

Step 2 Social Enterprise

Other clients

Other clients

Rushcliffe BC

Step 1 Council Enterprise


Proposed Business Model

Step 3 Social Franchise

Franchisee

Other clients

Other clients

Other clients

Franchisee

RBC FranchisorBusiness

Unit


Conclusions

At present our key focus is on…

Workforce challenge – culture and Ts&Cs Procurement challenges Local economy – opportunity to grow Element of risk and reward for the Council Council – secure financial return?

We’re excited about the potential to do something different and show other councils opportunities to develop.


Questions

Any questions?


Discussion

Discussion topic:

• What are the key issues for councillors when considering alternative service delivery models?

• 10 minute discussion in your groups, followed by feedback


Discussion

Discussion topics:

• How are you driving innovation and development within your authority?

• 5 minute group discussion followed by feedback

Commercial ModelsMutuals Programme

Presentation to East Midlands CouncilsWednesday 10th July

William BurgonPolicy and Commercial Advisor, Cabinet Office

Commercial Models - Mutuals Programme58

Commercial ModelsMutuals Policy

The Coalition Programme for Government made a clear commitment to new forms of organisations delivering public services

Commercial Models - Mutuals Programme

“We will support the creation and expansion of mutuals, co-operatives, charities and

social enterprises, and enable these groups to have much greater involvement in the

running of public services”


Commercial ModelsMutuals Definition

Although the sector has varying definitions, a public service mutual has three key characteristics



Commercial ModelsMutuals Numbers

The number of public service mutuals is growing rapidly, with many more in development

Commercial Models - Mutuals Programme Probation

9 70 120

Q4 2010 Q2 2013 Projected


Commercial ModelsMutuals Sectors

Mutuals are operating in a range of sectors, delivering services from the front line to the back office

Commercial Models - Mutuals Programme Probation

Adu

lt Le

arni

ng

Community Learning

Libr

arie

s

Health

Social Care

Soc

ial W

ork

Fire

& R

escu

e

Education

Children & Youth

Leisure

Hou

sing

Community Safety

Environment

Sch

ool S

uppo

rt


Commercial ModelsMutual Sectors


The growth in scope has been explosive, and developing projects will further broaden the services offered by mutuals


Commercial ModelsMutuals Benefits

Mutuals deliver a number of benefits which improve outcomes for staff, for commissioners, and for citizens



Commercial ModelsWhat We Do


Our work is designed to inform, guide, and support public sector staff and parent bodies along their journey to mutualise services


Commercial ModelsMutuals Support Programme


The Mutuals Support Programme provides a comprehensive package to help at every stage in the journey

Exploration Planning Development

Website & Hotline‘One to Many’

Training‘One to One’

Funding

Ambassadors & Mentors


Commercial ModelsMutuals in Action


A number of mutuals have already recorded impressive results, and the evidence base continues to grow

CECS SEQOLSocial

adVentures3BM

8% savings last year

£3m new business in last 12 months

Staff innovation resulted in iPad deployment

First mutual joint-venture in wider public sector

Combines public service ethos and private sector expertise

4% increase in nurse visits per month

12% savings in first year

Building network with local VCSE providers

262% growth winning RBS SE100 award

Expansion into new and diverse service areas

20% fall in absenteeism cost




These independent businesses are delivering significant improvements in productivity, driving down staff absenteeism

Staff from Central Essex Community Services (left) and Central Surrey Health (below) at work




They are also growing rapidly, both in terms of staff size and turnover, whilst delivering significant improvements in user outcomes

City Health Care Partnership CIC staff at work


Commercial ModelsMutual JVs


Mutual joint-ventures present another take on the model, and are already successfully delivering core services in a number of sectors

• 3BM is the first mutual joint venture to spin out of local Government.

• They have entered into a partnership with Prospects, the education employment company, bringing benefits to both sides.

• By combining the public service experience and ethos of 3BM’s staff with Prospects’ capital and business expertise, 3BM is leveraging the best of the public and private sectors.

• This means both parties can access skills and resources they would otherwise lack, enabling 3BM to provide a suite of high quality services to schools, including financial management, IT, and building development

• In spinning out, the local councils will see £1million in savings over the next four years.


Commercial ModelsFind Out More


Click through to the Mutuals Information Service, call the hotline, and follow us on Twitter

Online

mutuals.cabinetoffice.gov.uk

Hotline

0845 5390 543

Twitter

@mutualsgovuk


Commercial ModelsQ&A


Q&A

Engaging the workforce

Adam Barker Local Government Association

10.7.2013 www.local.gov.uk

View from employees – CIPD surveyCIPD Spring 2011 Employee Outlook Survey – public sector

results

• Public sector overall job satisfaction down from 42% to 38%

• For larger employers overall satisfaction was at 26%

• 30% of public sector workers think its likely they will lose their jobs and are the least likely of any sector to think they’ll get a new job

• 45% of public sector workers say they are under excessive pressure at work

• Trust in leaders and senior managers continues to decrease

www.local.gov.uk

New models of service delivery and employee engagement

• “The most important point is that mutualisation of public services can work incredibly well – staff are enthused, there is more innovation, better ways of working and increased efficiency.”

• Professor Peter Marsh vice-chair of the Cabinet Office's mutual's task force

Some of the characteristics of successful social enterprises

• Staff empowerment in decision making and governance

• Commitment to social mission

• Reduced absenteeism

• Responsibility

• Lower staff turnover

• Enthusiasm

Why bother engaging staff who are leaving the organisation?

• Well managed change sends positive message to all staff

• Will improve , performance, reduce costs and ultimately improve quality service delivery

• Valued employees will be retained in new organisation

• Council will need to work collaboratively with new organisation so engaged high performing employees are critical to an effective ongoing partnership.

Barriers to effective engagement in change process

• Clear Vision developed and shared by Councillors and officers-Strong clear leadership-70% of major change programmes fail (CIPD) this is a critical feature of success

• Managers get too far ahead of staff in the ‘marathon’ of change

• Clarity• Communication• Link short term action to long term vision

Resistance to change is a natural human response

• Beckhard’s law:

• Dissatisfaction x Vision x Steps forward > Resistance

So what can help? An inclusive approach

Help people feel involved in and responsible for aspects of the change

What works? An individual approach

•Don’t take criticism personally!

•Be patient and pay attention

•Discuss implications

Adapt your leadership to what individuals need from you at each point of their change journey

•Clear explanationfor change and a vision of the future

•Allow others to take responsibility and control

•Encourage and coach

•Exchange feedback

•Encourage risk-taking

•Prepare to move on

DENIAL

ACCEPTANCE

ANGER & BARGAINING

MOVING ON

Key messages for successful engagement

• Ensure spin out proposal is viable and well thought through-internal mechanism for evaluation-What are you selling + who will buy?

• Consult early with staff and TU’s• Listen + adapt• Identify concerns and respond • Be Honest• Promote opportunities

Why do it ?

• Margaret Elliot OBE

• Founder Sunderland Home Care

• “Workers are valued and feel part of the organisation; people participate and are listened to. They have an actual stake in the organisation which in return ensures commitment, commitment, commitment!” leading to high quality service provision

Event Round Up and Evaluation

delivering services differently wednesday 10 th july 2013

Documents

wider public sector

commercial advisor

services differentlywednesday

key outcomes

desired outcomes

different ways outcomes

range of options

strategic need