THE B USINESS SERVICES ASSOCIATION
Devolution and Integrated Services February 2016
ABOUT THE BSA The BSA is a policy and research organisation. It brings together all those who are interested in delivering efficient, flexible and cost‑effective service and infrastructure projects across the private and public sectors. Research conducted by Oxford Economics, commissioned by the BSA, shows that business service providers make a huge contribution to jobs and prosperity in every part of Britain. The sector accounts for over 9 per cent of gross value added to the economy and provides 3.3 million jobs, equivalent to over 10 per cent of all UK workforce jobs. More than two thirds of business services are provided for the private sector, with the remainder commissioned by the public sector.
The Business Services Association 2nd Floor 130 Fleet Street London EC4A 2BH 020 7822 7420 www.bsa-org.com The Business Services Association Limited is registered in England No. 2834529 Registered office as above. Designed by Soapbox www.soapbox.co.uk
CONTENTS
Executive summary
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The importance of stakeholders in service delivery 3 The role of digital in service transformation
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Devolution and service transformation across the range of services
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Economic development
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Transport and infrastructure
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Improving skills and apprenticeships and helping people into work
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Housing
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Health and social services
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Blue light services
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Appendix – List of BSA members
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EXECUTIVE SUMMARY
The Business Services Association is a policy and research organisation. It brings together those who are interested in delivering efficient, flexible and cost-effective service and infrastructure projects across the private and public sectors. We believe devolution has the potential to unlock local and regional economic development and stimulate innovation in the delivery of public services including through greater service integration - cutting down on wasteful service duplication and enabling a greater focus on user need. These goals will only be achieved through a progressive, outward-looking and forward-looking approach to engagement with local communities and the full range of stakeholders, including those from the private and VCSE sectors who have the relevant expertise and experience. This should be based on a vision of where communities want to be in ten or 20 years’ time - in terms of economic development, service delivery and a wider sense of ‘place’. The ultimate policy goals should be economic development and better outcomes, value and social value in service delivery.
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The importance of stakeholders in service delivery Surveys of local authority leaders show that drawing upon external expertise and skill, and benefiting from innovation, are recognised as important reasons for entering into partnerships with other organisations. External providers from the private and VCSE sectors can build up expertise, experience and economies of scale. Devolution enables them to develop local solutions to local need; share innovative techniques learnt from elsewhere; and help replicate and scale up best practice which has taken place. They also have access to upfront capital. These organisations have considerable expertise in a number of key areas, including: •
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Devolution enables external providers to develop local solutions to local need, share innovative techniques and help replicate and scale up best practice
not only the delivery of services themselves, but the skills required to successfully integrate services across agencies, including managing supply chains; helping assess user need and engage with customers, facilitating coproduction; analytics and insight, leading to substantial service improvement; performance management and measurement; sharing existing assets and improving asset management; and facilitating integration of ICT systems.
Achieving social value through the provision of services now matters more than ever. Providers of service and infrastructure projects have long been delivering added social value, both through individual contracts and as part of their overall work. The commissioning process is the foundation on which objectives are achieved, local service delivery is built, and value and social value obtained. All this means councils and combined authorities need to build on their commissioning capacity under the new arrangements which emerge, and learn from the lessons already learnt. These include the need to: •
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put residents and service users in the lead. In assessing user need and engaging with customers and residents, and then determining service outcome, external partners can help, facilitating co-production; ensure early dialogue. Commissioners need to have meaningful dialogue with service providers early in the process to ensure that providers’ ideas for innovation in social and wider value can be adopted, and new ways of providing services developed. Commissioners should encourage longerterm relationships with partners; always focus the procurement process itself on service outcomes; implement ongoing professional contract management. This is essential for ensuring high quality services; and set out clear procurement pipelines in order to allow suppliers to plan ahead. When local agencies work together it should be much easier to plan integrated pipelines so suppliers can plan their work and the skills they will need.
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The role of digital in service transformation In particular there is much further room for progress on the wholesale transformation of service delivery through the use of digital technology. Devolution allows policymakers to take a completely different look at how they do things – both the internal management of service delivery; and determining a shape of service delivery appropriate for the modern day. Digital is about transformation in itself, but it also enables a greater integration of services in terms of operation and delivery, including environmental services; direct council services such as benefits and Council Tax collection; and blue light services. Providers of services can have a convergence conversation - including providers of back office services where there has been modulated silo systems, databases, support services and help desks. These can be integrated, delivering greater efficiency and better services because there is a co-ordinated view of services and the people to whom they are delivered.
Devolution provides the opportunity for joined-up, insightdriven services to be scaled up across service streams
The actions required for this to happen – for example using data as a rich source of information for future service configuration – are ones in which the private sector can excel. There are good examples of the public and private sector working together to deliver joined-up, insight-driven services with better outcome for users, but devolution provides opportunity for this work to be scaled up across service streams.
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Devolution and service transformation across the range of services
Problems of overlapping provision, lack of co-ordination and data not being shared can all be tackled through devolution
Residents in each area clearly care less about the categorisation of services, which agency is commissioning them, or which funding stream is paying for them, than they do about the quality of services and whether they are provided seamlessly. Devolution provides an opportunity to improve this. It can tackle the problems of overlapping provision, lack of co-ordination, and data not being shared - so residents have to provide the same information multiple times. The Devolution Deals which have been announced represent incremental progress towards achieving this. Most Deals only cover a selection of the services provided in an area, but the hope and expectation is that the range of services covered – and the numbers of agencies involved - will increase as the reforms evolve, trust between partners is built up, and discussion focuses less on governance structures or geographic boundaries and increasingly on the practicalities of service transformation. The spectrum of what is meant by ‘joining up’ a place-based service is also a broad one. It ranges from full local control, perhaps with joint budgets or joint commissioning between local agencies, to greater local input in service commissioning and design. The range of services in each place and included, in varying degrees, in Devolution Deals to date, include: • economic development; • improving local infrastructure; • services to improve the skills and training of the local workforce and to help people into work; • housing provision; • health and social services; and • administering emergency services in an area. Each of those services has the capacity to be organised more effectively and across service boundaries with the input of the full range of stakeholders, including the VCSE and private sectors spreading innovation and new ways of working.
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Economic development The business services sector comprises five strands: ICT and digital services, business process outsourcing (BPO), facilities management (FM), construction and infrastructure services and managed public services. This is a very geographically diversified industry – accounting as it does for at least 8.5 per cent of employment in every English region, and 10 per cent or more in the North West, North East and South West. Across the UK, 70 per cent of business services are provided business-tobusiness, helping a wide range of businesses across all sectors and regions to innovate and grow and therefore contributing to jobs and prosperity. Therefore, in order to be successful, any attempt to rebalance the UK economy away from London and the South East must first recognise the role of this sector and then ensure all sizes of company within it have a voice in local economic decision-making which is commensurate with the sector’s contribution to local economies.
Transport and infrastructure
Transport should be viewed through the lens of its impact on the whole community and the needs and wishes of all stakeholders
Bodies built around combined authorities – such as Transport for Greater Manchester – are already bringing together the variety of transport services available across an area. Meanwhile bodies such as Transport for the North can help join up transport services across a wider area, ensuring that intercity connectivity is improved. The involvement of infrastructure providers in their work means innovative ideas can be spread more easily between different parts of the country. Transport should be viewed through the lens of its impact on the whole community, and the needs and wishes of all stakeholders – including businesses – fully taken into account when decisions are taken. For example stations, particularly on the outskirts of a city, should provide a focal point for the development and growth of a community and devolved bodies can take a lead in ensuring investment in new builds and renovations. Areas with a significant tax base can consider options such as Tax Increment Financing in order to fund the development of new infrastructure. This can provide a cost-effective means for ensuring transport infrastructure is constantly updated to reflect the need to attract new businesses to the local economy.
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Improving skills and apprenticeships and helping people into work The business services sector is committed to developing the skills of the people it employs and training more people through apprenticeships. Research conducted by the BSA found that BSA full members employ approximately 17,000 apprentices and provide 845,000 training days each year. The BSA will also be sitting on an apprenticeship trailblazer group this year to develop an apprenticeship standard for the cleaning sector. Skills, education and training are common themes in the Smith Commission and many of the Devolution Deals signed to date. This will impact on the provision of skills services and has the potential to enable different funding stream for skills and training to be combined at a local level. Services can be tailored to address local skills needs and any skills gaps, as well as supporting educational attainment, particularly in regard to adult learning.
Services can be tailored to address local skills needs and any skills gaps as well as supporting educational attainment
In some areas, such as construction and care, there are national skills gaps which the UK as a whole needs to address. In such circumstances, a national focus may need to also be applied, in conjunction with skills and education agendas at local level. A growth and skills agenda has implications for all business services providers, and for the full range of services offered – from construction to facilities management and ICT. All these sectors can work closely with LEPs to contribute to growth, jobs and productivity in an area by helping to align the focus of skills investment with the area’s need. As well as creating jobs, and training people in an area with the skills that area requires, residents in each ‘place’ also need services to help people into work or to progress in the jobs they have. Devolution of employment and skills services to regional or local level can help with joining up funding streams designed to achieve these various goals and which may traditionally be held between different central and local government bodies.
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These bodies often have overlapping objectives of skills development, improving employability and, ultimately, helping people into work or to progress in-work. Some of the Devolution Deals announced to date include provisions for joint commissioning, co-designing or reviewing future employment support. This has some advantages in drawing on local knowledge to ensure programmes are designed to support and respond to local labour markets. It is important that local input into future programmes also draws on lessons from existing programmes to avoid having to re-invent the wheel and ensure employment support is evidence-based - and that, importantly, the resulting employment support systems are not overly complex.
Housing
A focus on housing at local level is vital in unlocking potential to build new homes across a mix of tenures that best suits the needs of local people. Local government has the tools to unlock sites for development, speed up the planning process and work in partnership with the private sector to deliver new homes. Consideration of local infrastructure requirements needs routinely to be a core part of the thinking about any new development. Ebbsfleet, Stratford and Barking are all good examples of where an investment in local infrastructure has unlocked the development potential of brownfield land in particular. Local housing strategies need to be closely coordinated and local government bodies are well placed to bring together relevant decisionmakers and budget holders to make this happen.
There is the potential to unlock millions in efficiency savings and social value by opening up social housing management
In relation to housing management, the BSA believes there is huge potential for such services to drive efficiencies for local bodies. By opening up the market for social housing management, of which only around 2 per cent is provided by external providers, savings of at least ÂŁ675 million could be achieved each year. There is also the potential to unlock millions of additional social value through such contracts as well. The announcement of 1 per cent cuts to social housing rents each year should mean local authorities and housing associations look more closely at their spend on managing and maintaining their housing stock.
Health and social services
Bringing together health and social services provision around the needs of the user is often seen as the ‘holy grail’ of service integration, given the challenges facing both these services. Devolution is not an essential precondition for this to happen, but it does make it easier because it helps to bring all the relevant local service providers together.
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In many cases this may not the first step in service integration following from devolution, but it may be an ultimate goal once systems are in place and partnership working developed. Including relevant private and VCSE sector stakeholders in these conversations is an important part of bringing innovation to the table. There is aIso the potential for data on a broader range of services – including traffic and transport, housing and higher education – to be brought together to understand better how each system is working and where improvements can be made.
Blue light services
Better joint working can strengthen the emergency services and deliver significant benefits for the public
Better joint working can strengthen the emergency services and deliver significant benefits for the public. Nationally this is reflected in the recent transfer of responsibility for fire and rescue services from DCLG to Home Office. Locally we are seeing progress with joint working between blue light services where, in Northamptonshire and Kent for example, police and fire and rescue services are aligning. There is potential to share back-office functions and introduce new technologies and smarter ways of working to drive improvements and, working with the private sector, free up the time of frontline police and fire officers. Local officers, including Police and Crime Commissioners, Chief Constables, Chief Fire Officers, Ambulance Trust leaders, and local politicians, will all play vital roles in successful joint-working arrangements. The role of Police and Crime Commissioners could be expanded to enable them to take control of fire services in their area. The government consulted on this in 2015 and is expected to outline a new strategy later this year.
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APPENDIX – LIST OF BSA MEMBERS
Full members
Associate members
Accenture plc AECOM Amey plc ARAMARK Ltd Atos Balfour Beatty plc Bellrock Ltd Berendsen plc Bouygues Energies and Services British Telecommunications plc Capita plc Carillion plc Compass Group plc Costain Group plc Elior UK Ltd ENGIE UK & Ireland Freidman FM G4S plc Ingeus UK Ltd Interserve plc ISS UK Ltd Kier Group plc Laing O’Rourke plc Maximus UK Ltd Mitie Group plc MYFM Ltd OCS Group UK Ltd PeoplePlus Pinnacle Group Prospects Services Ltd Seetec Group Ltd Serco Group plc Sodexo Ltd Sopra Steria Ltd TerraQuest Solutions Ltd Veolia (UK) Ltd VINCI Facilities
Barclays Corporate Bevan Brittan LLP Clyde & Co LLP Deloitte DWF LLP ECI Partners Grant Thornton LLP Interim Partners KPMG Metzger Ltd Nabarro LLP New Street PA Consulting Ltd Pinsent Masons PricewaterhouseCoopers UK Reynolds Porter Chamberlain Royal Bank of Scotland Group Plc Sharpe Pritchard LLP Trowers & Hamlins LLP
W W W.B SA-OR G.COM
The Business Services Association 2nd Floor 130 Fleet Street London EC4A 2BH 020 7822 7420 www.bsa-org.com