A simple question to start The MJ/Serco survey of local authority chief executives was to ask whether respondents were exploring alternative approaches to improving council services as a result of squeezed budgets. The answer in the affirmative, unsurprisingly, was an overwhelming 100%.
The survey also asked about the most difficult challenges respondents faced in delivering improved services. Ensuring service delivery capability was top of the list followed by access to skills and meeting the high expectations of service users. There was slightly less concern about dealing with the legacy issues of service and technology contracts and indeed about access to technology. Respondents also put investment funding and collaborating on a multi-agency basis further down their list of big challenges that they faced in service delivery.
Creating successful partnerships is clearly a priority especially in services where a partner can help deliver improvements. Respondents were also asked in which of the areas did they regard having a partner as a priority in helping to tackle their challenges. Again, access to skills was top of their list closely followed by access to technology. As the latter was lower down the list of challenges, this suggests that while access to technology is a priority it is usually addressed to some level of satisfaction.
In descending order of importance partners were regarded as necessary in developing service delivery capability, dealing with legacy issues, meeting the expectations of users, investment funding and finally multi-agency collaboration.
So what are the main drivers in engaging a private sector partner? Access to skills came out top followed by cost efficiencies, then service delivery capability, access to innovation and technology, access to funding and meeting service user expectations.
Respondents to the survey clearly favoured joint ventures as their preferred contractual mechanism when working with a private sector partner followed by a fixed term contract, then an industry framework and finally a prime partner framework. Respondents were evenly divided about having their partner participate in the budget and/or strategic planning process, with just over half (53%) saying they backed the idea. One replied: ‘It is for the authority to set its own strategy and then to engage partners to deliver against that strategy’ while another commented on ‘the need to retain an intelligent client function that owns and understands the strategy.’ But in favour of participation another respondent said partners could ‘manage practicalities’ and have ‘the capacity in resourcing.’
Respondents were also asked about the importance of experimenting with service innovation and new technology as an aspect of partnering arrangements to which 41% said it was of high importance, 48% medium and only 11% said it was low. Unsurprisingly an overwhelming 93% said taking a user/citizen-centred design approach to commissioning future services was also important.
Asked about performance management arrangements, outcome-based was top of the list followed by risk/reward and KPIs.
A separate question put to respondents was whether they would consider a private sector partner acting as the prime collaborator to manage a supply chain to source services and technology aligned to the council’s defined outcomes. The answers were mixed, with just under half (46%) saying ‘yes’ and 54% saying ‘no.’
As to the key question about the ideal length of a contract for outsourcing or partnering, exactly half said three to five years, 18% said one to three years and 32% favoured over five years.
Respondents were also asked for their views on what might be the main reasons for not engaging a private sector partner.
The clear answer was fear of loss of control followed by the fact that in their opinion the service might not be suitable for outsourcing. A third reason was inflexibility, followed by the relevance of the partner’s previous experience.
Exploring new partnering arrangements
Cliff Graham, business development director, Serco Citizens Services, writes:
Serco is keen to explore new partnering arrangements with its local government clients, which includes gaining insight into what they consider the most important services a private sector partner can provide. Serco currently provides ICT, back office processing, waste and recycling, leisure, employment, skills and enterprise services to over 50 local government clients.
From The MJ / Serco survey, it was encouraging to note that local government respondents valued and sought continued engagement with private sector partners, particularly in respect of access to skills, technology and investment in council services. We note the overwhelming response on user/citizen-centred service design, and using Serco’s ExperienceLab, believe we are well placed to support our clients as they embed this approach in shaping future service delivery models.