Alternative Delivery Models
Looking at new and alternative models can unlock benefits for your service
Looking at new and alternative models can unlock benefits for your service
With public sector pressures mounting from increased demand for services and budget cuts, many organisations are looking at alternative delivery models as a way to make long-term savings, become more efficient, engage staff more deeply and diversify incomes.
Looking at delivery models can be a way to future-proof services and become more sustainable: putting your delivery in your hands.
There are many models to choose from, varying in levels of autonomy and having different governance structures depending on what best suits the function you’re looking to move out of government control. This could be back office functions (like Estates and Facilities in the NHS) but also your key front-line services. Or perhaps your service as a whole, be it part of local or central government.
New delivery models include Wholly Owned Subsidiaries or Local Authority Trading Companies (where a new organisation is created but is fully owned by its parent organisation), Joint Ventures and employee owned businesses and cooperatives. At Baxendale, we think ADMs work best when an amount of employee control is built into the model, and so specialise in helping our clients spin out into a new form that capitalises on staff engagement from the off.
Sometimes these are referred to as:
The government identifies Public Service Mutuals as organisations that continue to deliver public services after having left government control. They still have a positive social impact but staff have a significant ownership stake, meaning raised engagement, improved happiness and established channels for feedback and innovation.
When you give employees more of a say in how an organisation is run, in most cases there are notable improvements. Staff retention goes up and absenteeism goes down; there are less mistakes made, and employees report more enthusiasm for their work – something much needed in a sector faced with mounting pressure to achieve more at less cost.
Having the autonomy to choose your service lines often means new Mutuals can finally deliver those additional services they know there’s a need for in their communities, and as well as diversification, not spending time on bureaucracy means the freedom to spend time concentrating on the things your service users need the most. Reports have shown that Mutuals are growing by, on average, 50% since launching and 7% in the most recent financial year (State of the Sector, 2018).
Mutuals also have more freedom to partner with other Mutuals and other kinds of organisations. We’ve found this adds muscle to their bids, making them more sustainable, plus they’re able to share knowledge and expertise.
Who might be interested?
There are Public Service Mutuals operating in all areas of public service delivery, ranging in size from less than ten people to 1500+ employees. Sometimes a whole service will spin out; others decide to take certain departments or units out of government control. See a list of areas mutuals work in.
What do you do next?
A great place to start is to begin talking to the decision-makers at your organisation.
Advisors like Baxendale that have helped many organisations to spin out of the public sector will be able to advise you on the process and next steps. We can guide you through an options appraisal that will identify what delivery model is right for you, and help you to explore becoming a public service mutual.
