News and Comment

New models of local government

Monday 18 April 2011


By Hywel Lloyd, OPM senior fellow, and Sue Goss, OPM principal

Every local authority in the country is rethinking the way they work and how they are organised. For any transformation process, form follows function, and while there are a range of promising approaches to service and system redesign, there is no one-size-fits-all.

While considering commissioning models, choices need to be made to define the ‘strategic core’ authority (how many directly employed staff and which functions); and the principles of commissioning, from a mixed economy of public trading vehicles, mutuals, social enterprises, private sector and community providers.

A ‘strategic core’

Any ‘strategic core’ will include some support for the democratic / governance activities of councillors, but beyond that, there are fascinating arguments about what else might form part of the commissioning core and how much even of this activity, might, in some circumstances, be commissioned from outside.

It will carry out its functions in the context of the priorities and principles set by the councillors, these will set the tone for the commissioning of services from providers and other organisations. We can already see different ‘in principle’ approaches to these priorities and principles, for example, the ‘EasyJet’ view of Barnet, where users can buy the additional services that they want; the ‘John Lewis’ approach of Lambeth, focusing on the contribution (including ownership) of users and employees; and the Norfolk approach which involves the creation of a local government trading company.

It is clear that such principles will have to go further than existing statements of intent, so as to set a framework for local market making, and to guide choices between different supply systems: e.g. some authorities have stated a preference for local provision, or mutual organisations to be part of the mix.

Examining the function of commissioning

For many, commissioning is a vital process of ensuring value for money from suppliers; others see it as an overhead – something that replicates activity and performance monitoring so that money saved in delivery is simply spent on a new ‘commissioning function’.

Commissioning itself could be carried out by a user-led organisation (as is happening with some social care experiments), or be contracted to the private sector (as may happen in health), or might be most efficiently done in house. Not all commissioning functions need to be treated in the same way – some could be outsourced while others remain part of the core.

How could the cost of commissioning be minimised, without loss of quality? Could trusted providers identify what needs doing and do it without the specification and monitoring that goes with current ‘contracting’? Or is the span of responsibility for all council services far too broad to hold delivery agencies to account without a strong in-house commissioning function. And if commissioning itself is outsourced – how are commissioners held to account?

Finally, we need to think about how the public, both as governors and beneficiaries, in a commissioning model feed in their views and their experiences. How will they inform what is provided and what is discontinued? What are the best ways to link politicians to the commissioning process – and to ensure that commissioning is user driven?

OPM is working with many top teams, some of whom are considering the implications of a radical commissioning model, as they think through options, the values that underpin their approach and the ambitions they have for their communities which they want to hold onto. Please do let us know how your authority is developing.