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Idea Exchange: We ‘spun out’ most major services to facilitate £65m in savings

  • Comment

Northamptonshire CC’s ‘next generation council’ model is a wholesale departure from the traditional methods of providing public services.

  • Project: Next generation council model
  • Objectives: To create an agile and resilient commissioning and operating model across all council services
  • Timescale: 24 months from April 2016
  • Cost to authority: £500,000
  • Number of staff working on project: Four full-time equivalent
  • Outcomes: Creation of new commissioning core organisation NCC Group; creation of five wholly or jointly owned service delivery vehicles; facilitated savings of £65m in 2016-17, with more likely in the medium term
  • Officer contact details:

We have established a small retained organisation called NCC Group that ‘right-sources’ safeguarding and wellbeing outcomes through a federation of bespoke, publically owned social enterprises, companies limited by guarantee, trusts and strategic alliance partnerships.

The model helps services establish themselves as new organisations, with freedom to work commercially, collaboratively and innovatively.

nick byrom

nick byrom

Nick Byrom

Northamptonshire CC had to deliver £131m of savings by March 2020. With government and business rates income forecast to reduce by 28% (£40m) as well as demographic pressures, it was clear that if we did not change the way we operated, we would eventually have to make severe cuts or seek a double-digit council tax rise.

Our whole system approach to restructuring is arguably the most significant remodelling of an operating model in the sector today. It was designed to meet residents’ modern expectations about accessing services and to be resilient to any potential changes to local governance arrangements and in funding.

Setting up the right governance and selecting the right company type for new delivery vehicles was crucial.

Northamptonshire CC had already created a company, Local Government Shared Services, with Cambridgeshire CC and latterly Milton Keynes Council. LGSS provides back-office services. This reduced the costs for these functions increasingly as new clients came on board such as Northampton BC, Norwich City Council and Northamptonshire Healthcare NHS Foundation Trust.

We also established Olympus Care Services, a company wholly owned by the Northamptonshire CC that took responsibility for council-run residential and nursing care. With these outcomes already delivered, confidence grew in pressing on and exploring potential to look at other direct customer services.

Entities that sit outside the departmental structure of a council can innovate, empower staff and exploit commercial opportunities to ensure outcomes are delivered at the best value for money.

We established the central commissioning organisation, NCC Group, in April 2016. It provides the strategic commissioning directives to delivery vehicles within the model. This is run by strategic commissioners for place and people services and those employed in statutory roles. It also provides the governance and democratic interface with our elected members.

The project has involved the creation of new delivery vehicles, such as LGSS Law Limited, which provides cost-effective legal advice to the county council and other public sector bodies. This means the council pays for legal advice on a ‘pay as you go’ basis rather than as a corporate overhead.

The project has also involved creating First for Wellbeing; one of the largest community interest companies of its kind in partnership with Northamptonshire Healthcare Foundation Trust and University of Northampton. It commissions and provides a comprehensive array of wellbeing services to businesses, GP practices and residents.

The project has established Northamptonshire Adult Social Care Services, a company limited by guarantee owned by the council, which runs social care services. This includes Olympus Care Services.

The council has supported development of a social enterprise for transport called Societal, in which it is a joint shareholder with the University of Northampton. The enterprise will take the local lead for strategic and operational transport planning.

A managing agent function for public realm, property and commercial assets and environmental services is already through the business case phase and a vehicle for children’s services will go live later this year, with full support and transformational funding provided by the Department for Education.

The model has provided enhanced commercial flexibility that enabled delivery of annual savings programme of £65m in 2016-17 and will continue to support medium-term savings and income generation opportunities for 2017-18 and beyond.

The local collaboration and support for the model is helping the new vehicles to mature quickly. The inherent power of mutual understanding and sharing of expertise is creating new options for our major programmes, such as the health and social care integration, and strengthening the collective understanding of local services and future needs for the county.

Nick Byrom, policy and planning manager, Northamptonshire CC


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