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Delivering Services Differently

Delivering Services Differently. Wednesday 10 th July 2013. Conference Chair Cllr Anthony McKeown, Deputy Leader, High Peak Borough Council. Transforming Public Services. Presentation to East Midlands Councils Wednesday 10 th July William Burgon

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Delivering Services Differently

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  1. Delivering Services Differently Wednesday 10th July 2013

  2. Conference Chair Cllr Anthony McKeown, Deputy Leader, High Peak Borough Council

  3. Transforming Public Services Presentation to East Midlands Councils Wednesday 10th July William Burgon Policy and Commercial Advisor, Cabinet Office

  4. TransformationWhat We Mean Transformation = Structural Change 4 Transforming Public Services Transforming Public Services

  5. TransformationCase for Change Transformation Significant financial constraints High quality services fit for the 21st Century Restrictive bureaucracy Motivated and empowered staff Untapped commercial potential Revenue generation for HMG and the taxpayer 5 Transforming Public Services Transforming Public Services

  6. TransformationStrands of Work Digital Services Alternative Models Commercialisation Workplace 6 Transforming Public Services Transforming Public Services

  7. TransformationCross Government Transformation is taking place across government 7 Transforming Public Services Transforming Public Services

  8. Commercial ModelsMission We help identify, develop, and deliver the best business models to achieve better public services 8 Transforming Public Services Transforming Public Services

  9. Commercial ModelsPrinciples Our work is driven by a number of core principles, which guide how we deliver projects 9 Transforming Public Services Transforming Public Services

  10. Commercial ModelsApproach Each opportunity, whether in central government or in the wider public sector, is approached on its own merits 10 Transforming Public Services Transforming Public Services

  11. 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 HMG In House HMG Joint Venture Outsourced Service contract Mutual Mutual JV Privatise HMG / Private HMG / Mutual HMG / Mutual / Private 11 Transforming Public Services Transforming Public Services

  12. Commercial ModelsSuccesses We have recorded some impressive results already, with a lot more to come within the lifetime of this Parliament 12 Transforming Public Services Transforming Public Services

  13. 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 commercialmodels@cabinet-office.gsi.gov.uk 13 Transforming Public Services Transforming Public Services

  14. TransformationQ&A Q&A 14 Transforming Public Services Transforming Public Services

  15. Making the Right Choice Anja Beriro, Browne Jacobson LLP 10 July 2013

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

  17. Spending

  18. Austerity

  19. Politics

  20. Public sector reform

  21. Risk v capacity

  22. Strategic commissioning

  23. Main delivery models • In House provider • Shared services • Private Sector Operator – not today • Joint Venture • Social Enterprise • Trading company

  24. 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

  25. 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

  26. 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’)

  27. 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

  28. 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

  29. 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

  30. 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

  31. 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?

  32. Choice of structure • Incorporation required? (see later) • Companies • Limited by shares • Limited by guarantee • Community interest companies • Industrial and provident societies • Limited liability partnerships

  33. 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

  34. 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.

  35. 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).

  36. 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

  37. 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 343136 E: anja.beriro@brownejacobson.com

  38. Rushcliffe Borough Council – Growing a social franchise 10 July 2013 Neil Clarke, Leader

  39. 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

  40. 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

  41. 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

  42. The future of service delivery Transition Support / Profit Share Social Enterprise / Cooperative Direct Provision Support / Merger and Growth Contracted Service Investigate / Procurement Investment / Profit Share Efficiencies and Service Standards

  43. Looking at private sector business models

  44. Looking at private sector business models All of the brands are franchises Offering consistent quality, service, pricing and environment

  45. 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

  46. Taking care of grounds maintenance and street cleansing in the Borough • 30 years experience of caring for the Borough • Highly skilled workforce with a can do attitude

  47. 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

  48. 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

  49. 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

  50. 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

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