9th May 2016
Since the UK election in 2010, the UK’s public sector has endured unprecedented cuts to its budget, workforce and capacity.
This relentless and sustained pressure to deliver higher-quality services with fewer and fewer resources has made for a tough period in the public sector, but it has also driven major innovations. Many public sector organisations have rallied together to come up with innovative collaborative solutions that allow them to maintain high levels of customer service despite reduced funding. Here are five examples.
The collaboration between sectors is taking many forms, one of which is the straightforward procurement of services. For example, Echo Managed Services provides RAF Careers with contact management services. Initially, the RAF needed someone to handle calls and post brochures in response to its television adverts. The relationship has developed over time and now Echo provides information to potential recruits on Facebook, makes outbound calls to warm leads and applies analytics gathered to help RAF Careers optimise its advertising budgets.
This traditional client and outsourcer model has dominated for many years, but during the past few years, the additional pressure on the public sector has driven it to engage in longer-term collaborations with the private sector. In 2014, the Stockport Property Alliance was born out of support services firm Carillion, commercial property agent CBRE and Stockport Metropolitan Borough Council.
“This is a ten-year arrangement which aims to manage the cost of the council’s corporate property portfolio, enhance the services the council can deliver through that property, and help shape the development of the local economy,” Paul Kelly, director of Carillion Community Services, explains. “The case for making this a long-term collaboration rather than traditional outsourcing was clear: to effect long-term change management of this sort requires upfront investment on our part and that involves the security of a long-term partnership.”
This type of collaboration is taking place up and down the country, and it is not always the private sector firm that is pushing for the long-term relationship. In
Southampton, business process management firm Capita had been providing customer services support to the local authority for five years when its client announced it could no longer afford to continue the traditional client-outsourcer relationship.
“We were concerned at first,” says Stephanie Coward, partnership director at Capita. “Then we started talking to them about what they wanted for the future. We agreed to extend the contract by five years to make it a 15-year deal, and we set about a long-term re-engineering of the service.”
“We cut unnecessary services, such as keeping a contact centre open when no one used it. We drove a shift from face-to-face contact, which costs around £15 per interaction to online contact, which costs less than 50p. The overall effect is that we have delivered £32m of savings.”
When Chesterfield Borough Council was looking for a new way to deliver higher quality services with a reduced budget, it knew it would need to shift further towards digital delivery, and recognised it would need to collaborate with the private sector to achieve that shift. It brought in business process outsourcing provider Arvato to help.
“This need for channel shift has become a driver in most of our public sector partnerships,” says Debra Maxwell, managing director at Arvato. ‘The public sector is still in need of radical transformation, and for that reason I expect to see more and more of this sort of outcome-based collaborative procurement.”
Some public and private organisations are taking their collaboration even further by setting up joint ventures. Capita has established one such venture with the London Borough of Barnet, which provides development and regulatory services to residents in Barnet and the South East. “If a service can be commercialised, so each party has a financial incentive to perform well, then it makes sense to set up a joint venture,” Mark Dally, partnership director for the project, explains.