Don't lose momentum after mutualisation
The public service mutualisation agenda is gathering pace. Andrew Laird and Oliver Cappleman offer their ideas on how to scale up after the first contract
A range of NHS services have now fully transitioned to independence and are blazing the trail for other health and social care services to follow. Plenty of Councils are now allowing staff the chance to preserve and grow a service by exploring mutualisation rather than going down the usual route of salami-slicing as budgets are reduced. Probation is the latest area of interest with the MoJ’s announcement that commissioner and provider functions within Trusts are to separate. Mutualisation has been highlighted as a serious option for delivery teams.
However, interest will diminish and the momentum will disappear if the mutuals that are already up and running can’t demonstrate the ability to expand and create long-term sustainability. The majority of mutuals start with an initial contract with the public body that they spun out from. Whilst it is important to ensure that contract is delivered well, there is a real need to diversify as quickly as possible to avoid the possible make or break situation when they have to retender for their one and only contract.
Many mutuals will start small, taking on additional responsibilities around their existing service. Evolve YP in Staffordshire, the first independent Social Work Practice, moved quickly to develop and generate income from services related to their core social care remit e.g. supported accommodation for Looked After Children. They have also taken up opportunities to “sweat their assets” by renting out their free space. Social adVentures, a public health provider in Salford, have also diversified locally taking on a number of additional services. These include a garden centre which it both runs as a social enterprise in its own right and has also integrated into its public health offer.
Whilst these local service expansions are important (and in many ways a sensible first step), the best way to truly remove reliance on a single contract is to expand delivery to a different geographical (and contractual) location. This might be a neighbouring area or it might be a different part of the country altogether - but the key is that it is a new and substantial contract.
Some existing mutuals have managed to do just this. A fantastic example is Ripplez, who provide NHS service to young mothers. They have expanded their service beyond Derby City to Derbyshire and Burton and as a result have achieved growth of 400% since 2007 and in the process broken their total reliance on that initial contract.
So what are some of the key challenges faced by public service mutuals looking to grow?
Robust market Analysis - Most new public service mutuals will have a firm grip on what their core customer(s) want (and are able to pay) for through their initial business planning process. However, they will probably not have had the time or resources to look much beyond this. For an organisation to grow it must spend time looking at the wider market in a methodical way to seek out new opportunities.
Writing compelling bids – some new organisations struggle with the tender process involved in winning new work. They may have the ability and passion to deliver a service but can they translate those ideas into a well written tender response?
Pressure on internal processes – expanding a service undoubtedly puts additional strain on both the governance arrangements and operational infrastructure of an organisation. The back office will have to support a wider range of services (possibly in different locations) and the governance often needs to adjust to ensure that it is representative of the new geography and wider service user group.
When you approached mutualisation, breaking away was the only thing on your mind. The whole process was likely to have been testing and exhausting. You have made the first big leap. Make sure it was worthwhile by ensuring your sustainability isn’t reliant on just that initial contract.
Mutual Ventures are working in partnership with Bates Wells Braithwaite and Matter and Co to help existing public service mutuals address these and other issues and ensure they are ready for growth. The partnership can support mutuals to apply for support and funding. The Social Investment Business are running the Investment and Contract Readiness Fund, a Government funded programme for organisations looking to grow.