Stepping Out NOW            January 2014
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For some years now there has been a lot of discussion about new ways of delivering public services.   While some very good things have happened, often under the radar, we still, in 2014, have public services that are mostly unreformed and unsustainable in their current form beyond the near future.
We are fast approaching a moment of truth in this country: either we deliver differently or we have fewer public services.  This point of decision is approaching fast.  Soon, many local authorities are already running on half of the income they had at their peak in 2010. The NHS, while protected, has to meet the runaway costs of health-inflation, growing demand and the crippling costs of wage settlements agreed during the years of plenty.   
Virtually all of the public services leaders I speak to are acutely aware that the clock is ticking down.  They recognise that the business-model of most of today's public services is no longer really fit for purpose. The difficulty they all face is not so much one of knowing what they want but how to get from today's reality to tomorrow's possibility. Even the real visionaries struggle enormously with the leadership task of getting their politicians, staff and communities aligned around a new type of settlement which involves replacing the old with the new. 
So what will 2014 hold for those hoping to deliver differently?  This is a year when we can hope for more movement than has been seen so far. The penny is dropping in many places that there is now a choice between doing things differently or a double-dose of electorally unpopular cuts and tax rises. The rise in the number of bids from councils to the Mutuals Support Programme and the encouraging response to the new Delivering Differently Fund are good omens.
For those seeking to 'step out', there is the added boon given by new EU rules which create a more permissive regime for smaller spin outs and give a greater clarity around how authorities need to go about creating large new public service mutuals. This is discussed in brief in this newsletter and in more detail here on our blog. A key message is that the new procurement rules do replace legal ambiguity around the formation of new spin outs with proper clarity - and this is to be welcomed. 
If you are reading this and wondering whether to set one up, our message is that if you do, you have timed your run perfectly. There is a network of people to support you, there is funding, and you may well be pushing on an open door within your own organisation.  Do get in touch if you want to talk - we can help.

-- Craig
On the sofa…

This month, something a little different, we talk to Jonathan Lewis about a partnership with Serco... 
Read more>>


Ask the Expert
I’ve heard there are new procurement rules coming in – will this make it easier or harder for a mutual to get an uncontested contract?

The short answer to this question is that ‘it’s complicated’!

New procurement rules from the EU mean that the way councils will need to go about setting up mutuals will have to change, in all likelihood, from June 2014.  

There are three important points to take on board.  
  1. The new rules mean that all services with a contract value under €750,000 (c. £635,000) do not need to go through any procurement process at all.  
  2. Councils will no longer be able to simply offer new mutuals an uncontested contract for services over the €750,000 threshold for services of a social nature.
  3. The EU has created a special list of services, for which the council can, if it chooses, restrict the competition only to organisations which themselves have a clear social mission, commitment to employee involvement and a commitment to reinvestment of profits. This list of services includes most social care, education, youth, library and heritage services.
So, very small staff-led ventures in most areas of council activity could easily be offered a contract without a need for further procurement effort on the part of councils, provided the case is made under their own contract standing orders. 

What these changes certainly herald is the end of ‘sweetheart’ contracts to large new, freestanding mutuals run entirely by former council staff.  However, the changes are also a big opportunity.  They allow councils to limit certain competitions to socially progressive organisations with business expertise, capital and experience to work with alongside the council to create viable, ethical properly funded new public service companies. 

Good Reads:

Spinning out: was it worth it?

Why a strong dose of innovation is needed to cure health inequalities

Bromley Healthcare and Serco sign partnership agreement

We need to start talking about public service reform again



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