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LGC FINANCE - A PRIVATE AFFAIR

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It can be well worth rebuilding a public/private partnership where there have been problems. Richard Hornby explain...
It can be well worth rebuilding a public/private partnership where there have been problems. Richard Hornby explains why and how it's done

Partnerships have the ability to bring out the best in people. Lennon & McCartney, Rogers & Hammerstein, Bogart & Bacall. But, when things go wrong, the end product can be badly affected.

When the relationship between Lambeth LBC and Capita went downhill a few years ago, services suffered. Housing benefit problems were not unique to Lambeth and, in common with a number of other councils, Lambeth decided to bring the service back in house. The council wanted to continue work with Capita and both parties knew the way forward was to rebuild and develop the relationship as a partnership.

The result has been a marked improvement in important areas such as council tax collection and the speed and efficiency with which the council deals with complaints.

Capita's role remained vital to Lambeth, even after the housing benefit contract ended. The company was still responsible for council tax, business rates, the cashier service and its supporting information technology, and for housing benefit customer contact such as dealing with telephone enquiries. Lambeth relies heavily on the resilience and economies its shared service centre has brought.

Lambeth's chief executive Faith Boardman strongly believes that the public and private sectors can learn from each other - she brought people from the private sector into her management team soon after arriving at the council - and that philosophy has influenced the strengthened relationship.

Ms Boardman says: 'After Lambeth and Capita decided to continue working together, we challenged Capita to deliver the quality services it was capable of - and it has. We have learnt how to draw from its strengths and it has learnt about what is important to us.'

The relationship between Lambeth and Capita has moved from a client/contractor relationship to a strategic partnership. Cynics might say that the latter is a euphemism for the former but there is a key difference - a good strategic partnership is built on trust more than on the detail of contracts.

These changes did not happen overnight. Mutual trust and respect had to be earned. It was important to get the contracts right and both parties approached negotiations openly, looking how they could benefit the service without taking advantage of each other.

The benefit of the trust built up during the negotiations. Subsequently, both parties have been able to set targets that are not contractual but which both work to. For example, they have agreed year-on-year targets for increases in council tax collection. Lambeth does not have a good record on collection - the rise last year from 88.7% to more than 91.5% represents a major advance for the council - but Capita is committed to getting Lambeth to 95% collection in three years.

According to Capital executive chairman Rod Aldridge: 'An effective partnership is when a council and Capita continually review, challenge and evaluate each other.

'Our strategic partnership with Lambeth is an excellent example of such an approach. The council has improved services and enhanced revenues, Capita has a stable partnership contract and the people of Lambeth continue to experience step changes in all the services they receive.'

While some aspects of the relationship are less formal and based on trust, Lambeth has strengthened other parts. Where the changes needed were more project based, it has used formal project management disciplines to ensure delivery on time.

Both project management and routine operational meetings alternate between council offices and Capita's offices. By sharing the hosting of meetings, both are demonstrably working more co-operatively and we can approach meetings in a more open way.

This has paid off in a number of ways that demonstrate the advantage of strategic partnering over client/contractor attitudes.

With the joint service centres, Capita has worked with Lambeth on issues such as staff training - even though it is not in the contract - because it recognises the importance of the development to the council.

Like most relationships, the partnership still has its ups and downs. But both feel confident they can keep the council on the road to improvement.

Richard Hornby

Assistant director, finance, revenues and business support, Lambeth LBC

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