Can Strategic Partnering Deliver Best Value?

October 22, 2001

Introduction

I am delighted to be addressing you today and I would like to thank in particular the CBI, NLGN and I&Dea for hosting this event. This is the first in a series of seminars taking place across the country over the next month that I and other Ministerial colleagues will be attending.

This Government has set as one of its higher priorities the need to deliver real improvements in our public services. Our ambition is to build world-class public services for Britain. Local Government will be at the forefront of delivering these services. So I am looking forward to working with you because I know you share our ambition and commitment.

The East of England has been very clearly involved at the leading edge of strategic partnering work. There are several regional examples, for instance, the partnership between Bedfordshire with HYDER, the partnership between Hertfordshire CC and CAPITA in developing a call centre and the Peterborough City Council arrangement with SX3. Not forgetting of course, today’s Host Case Study, involving Norfolk CC and Capita Group.

These are examples of where public/private partnerships are developing, but as I shall go on to say, they are just one type of partnership activity that can be included under the heading of strategic partnering. I also know that local authorities and other public and voluntary bodies are starting to work together to develop similar arrangements. In Cambridgeshire local authorities are coming together to form a shared vision on developing modern public services. In Norfolk, the Norfolk Connect project is bringing together local authorities and other public and voluntary bodies to develop county wide services geared to the needs of the community.

Developing a framework that delivers what the community needs

Government’s role is to create a framework which encourages effective and innovative councils to improve the services they provide to the community. It is not about directing the detailed delivery of services at a local level.

In my previous post as Minister responsible for construction, I placed a very strong emphasis on providing and encouraging new relationships between clients, contractors and sub-contractors based on partnering and long term relationships. I take a similar approach in my new role as local government minister. As a government we believe that greater freedom for the way in which local authorities work and greater scope to develop innovative new partnerships goes hand-in-hand with better outcomes.

That is why we replaced CCT with best value and why we will continue to reform best value to focus on results.

That is why we want to remove unnecessary restrictions on local authority financial freedom and to introduce a new prudential financial regime.
And that is why we are rolling out local public service agreements. In this region, both Norfolk County Council and Cambridgeshire County Council have been involved as LPSA pilots and are well placed to appreciate the potential benefits that can come from this initiative. Other councils in this region are about to start this process.

By reducing the planning and reporting burdens local authorities face, we free them to tackle problems faster, and in the most effective way.
Whilst the Government can set national priorities and provide the structures and resources, it is the local authorities that need to make real choices about how to meet local needs. The development of community strategies over the next year, through the work of Local Strategic Partnerships, will help to facilitate this.
We want a spirit of enterprise in the public sector, where local leaders have the freedom to innovate and change, and where we can delegate more autonomy and budgetary responsibility to authorities that can deliver high standards. That is the thinking behind local PSAs and other initiatives that have been developed.

Creating a Taskforce

Strategic partnering is one of the principal options open to local authorities in achieving the higher levels of performance that we owe to our communities.
The reports that NLGN and the 4Ps produced recently on this new approach are very timely. I hope they will encourage a wider debate about new forms of service delivery and help to raise expectation levels about what is possible.

But authorities want more than research reports or paper-based guidance. They want practical support to help them in the real business of setting up partnerships. That is why as part of the R&D programme we have put together a Taskforce of experienced private sector and local authority project management, finance and legal experts. They will be able to provide direct support and advice to those authorities that want to enter into these partnerships.
The Taskforce has now started its work. Earlier this month we invited best value authorities in England to apply for pathfinder status as part of the programme. This is a real opportunity for them to benefit from expert advice and learning. By the end of the year the Taskforce will have selected 30 projects to work on.
What are Strategic Service Delivery Partnerships?
Strategic partnering can cover a wide spectrum of options. They are not just about the large scale partnerships that have attracted a lot of coverage recently.

A partnership is strategic not just because of the size of the contract. A partnership is strategic if it delivers services that are of critical importance to the success of an authority’s community aims. We want small authorities to be able to use these new ways of working as much as large authorities.

Strategic partnering is appropriate to all areas of service delivery. Furthermore, we want to see partnerships that involve a variety of partners. A truly mixed economy of service provision is the best way to ensure genuine innovation and true competition.
A local example of this is Norfolk Connect, which I have already mentioned. Councils in Norfolk are committed to developing a shared vision of modern service delivery across the county. This partnership comprises local authorities together with other public and voluntary sector agencies. By 2004 you should be able to go into any Norfolk Connect Point and get the same quality of service with the ability to deal with 80% of interactions immediately, more in the larger centres based in every market town. The same service should also be available on the internet and over the telephone. This work will contribute to the wider LPSA target on e-government that Norfolk CC are pursuing.

The partnership approach is not some code word for externalisation. It is about new ways of delivering services. It could involve devolution to managers and front line staff through arms-length arrangements. It could involve the best in-house providers using their expertise in wider markets within the public service. We are trying to ensure that all these options are open.
But equally if the skills and resources you require to improve your service would be best provided by a private or voluntary sector partner then that is what you should do. There is no dogma or hidden agenda in the Government’s position. We really do mean that what matters is what works best.

We hope to be able to develop a series of practical models so that when authorities are looking to innovate they have the widest possible range of realistic options open to them.

Although these partnership arrangements may be very different they will contain common factors that set them apart from traditional approaches.
They will be quality driven and add value to the overall outcome; approach issues from a corporate assessment of need; be based on the needs of the community and involve effective consultation; and seek to develop innovative solutions in the delivery of better services.

We must also move away from the purely cost-driven approach. The delivery of worthwhile outcomes sustainable over the longer term should be the aim, not low cost options delivering doubtful outputs.
Taking a corporate and longer term approach
Often this will mean taking a longer-term view rather than seeking short-term and unsustainable gains. This is about investing to save, investing to deliver more, and investing to prevent problems rather than continuing to treat symptoms. We need to move from commissioning a service, to commissioning an outcome.

Setting the outcomes we want must come from a wider community perspective not just from the narrow needs of a particular authority department. This will require moving away from the existing patterns of service provision. That is the link between local strategic partnerships and community planning on the one side, and best value and procurement on the other.
It is, for example, why we have introduced the Single Capital Pot arrangements, where asset management is looked at as a corporate function and where property and other assets are used to deliver outcomes based on the needs of the community, rather than treating each service as a distinct silo.

We also need to take a close look at how we use best value. We need an approach that focuses on fewer but more strategic and radical reviews that take account of cross-cutting issues.

The Byatt report on local government procurement published recently, suggested that the development of procurement skills needs to be given a much higher profile. We have consulted on the report. My Department and the LGA are now reflecting upon how we can turn the recommendations into action.

Consulting with users and defining needs
As Construction Minister I was struck by the words of Sir John Egan in his Rethinking Construction report:
“…in the best companies, the customer drives everything. These companies provide precisely what the end customer needs, when the customer needs it and at a price that reflects the product’s value to the customer. Activities which do not add value from the customer’s viewpoint are classified as waste and eliminated.”

That is how it should be in any public organisation.
All service delivery should reflect the needs of the citizen. This reinforces again the need to develop comprehensive community strategies that have been informed by input from all local partners whether they be from public, private, voluntary or community organisations and groups,
New Technologies and working practices
This will mean bringing to bear new technologies and working practices.

This does not mean electronic government for its own sake. Rather, it means using new technologies – call centres; smart cards; the Internet; and digital TV – as part of an integrated strategy to improve the quality, functionality and responsiveness of local services.
Councils will have to exploit new technologies, new working practices, and offer a variety of delivery channels to deliver services which reflect the lifestyles of their users. People want services to be available at weekends and in the evening.

This will have a real impact on the way we manage things and on how we develop our staff. We will need to have multi-skilled and multi-functional staff, who are empowered to deal with customer needs.
Developing and valuing our human resources to meet the challenge.

In delivering services to the community, we must recognise from the outset the vital role that frontline staff can play. Staff in local authorities and in other organisations that deliver services to the community have much to offer in the drive to improve standards.
We expect employees to be involved in the best value process and as part of the current Review of Best Value we will consider ways and means by which staff can be fully involved, for example, in reviewing key services and the appraisal of options.

We also expect public services on the basis of best value, not worst labour standards – this is irrespective of whether services are delivered directly by local authorities, or in partnership with the private or voluntary sectors.
We are currently reviewing arrangements that impact on the workforce, and are consulting on options to improve the operation of the TUPE regulations. Workers need reassurance that their rights will be safeguarded in the vital process of public sector reform and in business restructuring in the private sector.
The Review of Best Value will include the particular concerns of local government employees transferred to the private sector. We will consider the issues of a two-tier workforce drawing on the work being carried out by the Office of Government Commerce, and where evidence of a two-tier workforce is found to exist we will take action to end it.

Conclusion

In this Parliament we have set ourselves a tough target to transform the services the public receives. We have committed substantial additional resources to health, education, transport and to local government which is responsible for delivering a very large number of services that impact on peoples lives.
But the quality of services depends not just on how much the Government spends; it depends on how effectively those resources are used. The challenge to us all is to deliver real improvements that the public notice and value.

We will of course support all local authorities that are striving to make true step-changes in performance as well as continuous improvements.
But ultimately it will be up to you to deliver on the ground. It will be up to you to deliver the world class services that the public want and deserve.


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