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Service in the mix

Is the era of single solutions to councils’ service provision over? Long ago, councils provided all services directly. The 1980s saw compulsory competitive tendering with a ‘private good, public bad’ mindset in government, followed by best value, which saw micromanagement by the Audit Commission of service standards.

More from: Service in the mix

Now there is a mixed economy, using the public, voluntary and private sectors, arising partly from the sheer scale and speed of reductions in councils’ resources.

Faced with demands to make cuts faster than anyone could write and tender a large outsourcing contract, councils have reached for new solutions, often with radical change in what they do and how. But there are barriers - the public may not understand, councillors may fear for their seats and officers may resent the disruption of settled ways of working.

LGC and Serco therefore convened a roundtable discussion last week to thrash out how to make mixed provision work and examine the pitfalls and opportunities.

Participants

  • Sir Stephen Bubb, chief executive, Association of Chief Executives of Voluntary Organisations;
  • Mike Cooke, chief executive, Camden LBC;
  • Cheryl Coppell, chief executive, Havering LBC;
  • Rob Leak, chief executive, Enfield LBC;
  • Sophia Looney, director of policy, equalities and performance, Lambeth LBC;
  • Valerie Pearce, head of city services, Brighton & Hove City Council;
  • Adam Wilkinson, chief executive, Derby City Council;
  • Chris Williams, chief executive, Buckinghamshire CC;
  • Gareth Moss, local government director, Serco;
  • Daniel Drillsma-Milgrom, acting editor, Local Government Chronicle (chair).

Despite shorthand terms such as ‘commissioning’ or ‘co-operative’ councils, there was general agreement that such pigeonholes were unhelpful, as one authority could simultaneously be both these things and more.

Havering LBC chief executive Cheryl Coppell said: “The mixed economy is a good starting point, but we have got to shift the debate into getting other providers into commissioning arrangements with us that are much more flexible, and I still don’t think local government has got to that mature relationship with private contractors or the local community. It tends to be quite traditional.”

The need for flexible responses to dramatic changes in resources has meant long outsourcing contracts traditionally used to achieve savings have become inappropriate as they could not respond fast enough, said Derby City Council chief executive Adam Wilkinson.

“We are bringing things back in house, because of the lack of flexibility in contractual arrangements,” he said.”The more flexible you make them, the more they cost from third party organisations. With year-on-year reductions, you can resolve that within your organisation to a degree, but they are difficult to negotiate outside,” he added.

Gareth Moss, local government director of Serco, said these problems could be overcome but there were “procurement processes which really do get in the way because people do not understand how you can contract on an outcomes basis that gives you that flexibility”.

He added: “I think everyone accepts that traditional contracting arrangements have had their day but professional training does not seem to have changed and adapted with the way that society is changing.”

Buckinghamshire CC’s chief executive Chris Williams said the county was “very pragmatic in service delivery and has taken a view it will move over time from direct service delivery to contracts with the voluntary sector, partnerships, strategic alliances”. He said this approach did not fit any pigeonholes, as “we are all doing bits of everything”.

Camden LBC chief executive Mike Cooke said his council had embraced a mix of outsourcing, third sector and in-house provision but “the sector had been too focused on what sort of councils should we be, as opposed to what process gets you the best outcomes”.

He added: “We have balanced our budgets but we still fall short on changing people’s lives.”

Service provision flows through from the role a council sees itself having, and Enfield LBC chief executive Rob Leak said this was by using its democratic legitimacy as a community leader.

But he doubted central government shared this view, and feared it still saw councils as service providers only.

“We need to think much more fundamentally about what is the purpose and remit of local government,” he said. If it’s only to mend potholes we might as well privatise the whole lot, but it is a democratic institution that represents the people and the problem is that central government does not recognise that, and it’s a big challenge to describe its role and demand it is recognised.”

Mr Moss agreed both about the legitimacy of local government and its need to work with other sectors, or not, as it saw fit.

Lambeth LBC has a prominent programme in progress to change what it does and how by engaging with residents to discover their desired outcomes.

Sophia Looney, director of policy, equalities and performance, explained: “The core is to involve citizens far more directly in making decisions and recognise that they bring strengths to the table as well as needs and demands.

“I think it can be very easy for us to slip back into thinking we must deliver a service because we always have. We must focus on outcomes, not on how we fit our service or contracts into that outcome, but look at what makes a difference in terms of delivery and it might be something completely different from what we are familiar with.”

Ms Looney said staff skills and behaviour would need to change radically and that this could be an uncomfortable process.”The key thing will be working with local people in a different way and that is hugely challenging because it is not what our senior staff do, not what our members do. Behaviour change, whether it’s a ‘nudge’ or more direct instruction, is the biggest chunk of what we have to do,” she said.

She added there had already been significant resistance from staff, and so Lambeth had sought to identify “disruptive innovators in the system we can work with in more subtle ways, not necessarily recognising them formally but working beneath the surface”.

Some 60-70% of staff were, “sitting on their hands”, hoping either that change would go away eventually or thinking “we’re not going to do this”, she said, “but it is not going away and either you get with it and change or you’ll be off”.

Staff had become comfortable “and that makes it very difficult for us to say ‘this has got to change’”, Ms Looney added.

Mr Wilkinson said he had met similar problems, in particular from members of nationally organised professions. “When preparing budget options, I see a real issue about getting professional mindsets to see the world as it is now rather than 30 years ago, which is what they’d like to get back to,” he said. “Some nationally organised professions can be real tough cookies to break, but it is necessary as they are hindering change.”

Mr Wilkinson said the problem was exacerbated by reductions in staff numbers, which had meant “those with an inkling of ambition to set up on their own see it as an opportunity and take redundancy, and we are left with those not ready for the challenge”.

Valerie Pearce, head of city services for Brighton & Hove City Council, said these new approaches would require a higher proportion of senior officers to be generalists rather than promoted from a professional specialism.

“We will need generalists to do this kind of thing. However, organisations are organised in ways that are not conducive to generalists, and members can regard their appointment as a risk,” she said. “If we are all organised in professional silos, how can change happen?”

Ms Coppell noted she was a generalist, previously a head of policy “and I do not find very many others come up the policy route”.

Mr Williams agreed on generalism, noting that, once service provision was settled, whatever remained of a council’s centre “will be running multiple delivery vehicles, so how do you keep control of that and how do you drive further efficiencies? It is going to require a very different skill set for senior managers.”

He said Buckinghamshire now emphasised a community development role for officers “who can stimulate voluntary action, which is a skill quite rare in local government”.

He added: “How do you identify people with the credibility to operate within community networks transforming relations between citizen and state?”

One way to work with communities was to see older people as a resource rather than a problem, as “if they are pretty fit and active and want to give something back, harness their commitment, time and skills to do more community work, it’s brilliant”, said Mr Williams.

Many councils use voluntary bodies in a more formal way to provide services, but Mr Leak highlighted a tension between the skills and resources of national charities delivering local services and the need to foster community capacity.

“It’s a challenge around building locally strong communities and we have a £1m capacity fund to nurture new voluntary groups, but the NHS tends to favour large national charities,” he said.

“There’s nothing wrong with them, but we think it’s really important that local voluntary groups can prosper because they know communities,” he added.

Sir Stephen Bubb, chief executive of the Association of Chief Executives of Voluntary Organisations, said the issue of national versus local charity providers was divisive in his sector.

“Loads of big national charities work at a local level and are just as effective at engaging local communities as local charities,” he said.

“There is a tendency to think only an organisation defined by geographical boundaries can work, but communities of interest are often best represented by national charities,” he added.

He said the third sector could bring “huge added social value” to public services, but this went unrecognised, as “state procurement policies tend to base all on price”.

Sir Stephen said the return of public health to local government raised “a very interesting agenda of the voluntary sector and councils getting the NHS to see the importance of public health and prevention, and moving resources from acute hospitals into support for people with long-term conditions, and for the elderly”.

Ms Coppell feared getting clinical commissioning groups to understand how local government works “and that it charges for things, is quite a big challenge”.

She added: “There is a lot of discussion around shifting money from acute to local services, and we’ve got them along the path, but it’s difficult as they see it about them setting up better GP services, but sitting behind that we need local communities.”

Changes needed around service design, delivery and partnerships all depended on sound political leadership in councils, participants agreed.

Mr Leak felt it was essential that “we have politicians who will engage in a debate, while Mr Cooke called for courage from them “predicated on clarity of vision and stability”.

Staff valued stability, but Mr Wilkinson noted the financial climate meant they were unlikely to get it, and “we need to shift cultural mindsets so people think change is interesting, challenging, fun and rewarding so it becomes positive”.

Councils had come through recent financial turbulence with their public satisfaction levels up, several participants noted.

Mr Moss said this had been “a really good example of what local government does far better than any other sector, which is to manage in uncertainty and occasional instability, and it’s a lesson the commercial sector could learn from”.

A future of mixed services providers overseen by generalist council managers would move local government ever further from its traditional service provider model, and that may demand changes from staff and professions that will generate negative responses without careful handling.

LGC Roundtable in association with Serco

This roundtable discussion was sponsored by Serco. The topic was agreed by LGC and Serco. The report was commissioned and edited by LGC. See LGCplus.com/Guidelines for more information.

 

 

 

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