Alternative approaches to service delivery - how can we do things differently?

Alternative approaches to service
delivery
How can we do things differently?
Mark Bandalli
Senior Consultant, Mutual Ventures
mark@mutualventures.co.uk
www.mutualventures.co.uk
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
2
All rights reserved © Mutual Ventures Ltd 2014

Who are Mutual Ventures?
3

The challenges from a LA perspective
4
 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
5
 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
6
 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
7
 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
8
 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
9

10
 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?

There are several benefits frequently associated with the option to deliver public
services through the mutual model:
11
Why consider this model?
Sustainability
1  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 outcomes
3
 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

A growing number of mutuals are being created across the country – with a wide
geographical spread
12
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

13
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

14
Example of CJV involving VCS

15
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

16
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
17
 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
18
 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

19
Q&A

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