The people and the place
John Mascall is the Director of Commercial Services for the New Forest District Council and Test Valley Borough Council direct service partnership. As an Assistant Director at New Forest in 2000 he put forward the idea of the partnership between the Authority and Test Valley, a neighbouring District Council, to deliver direct services.
Test Valley had a combination of outsourced and in-house services and had experienced a number of performance problems. Having brought the refuse service back in house, it lacked management capacity to develop services in accordance with its ambitions. New Forest had continued to deliver direct services through a Direct Labour Organisation (DLO) but was looking for strategic partnership opportunities in order to save on management costs under the new best value regime.
There were similarities between the two authorities both politically and culturally, and they saw each other as confident and equal partners. Politicians on both sides were open to new ideas, and key decision makers quickly pursued the idea.
The innovation and the impact
The partnership between New Forest and Test Valley was the first direct services partnership of its kind in local government. The partnership provides joint management of the direct labour workforces employed within their respective councils, which include refuse collection and recycling, street cleansing, building cleaning, transport, grounds maintenance and building works.
Governance arrangements involve: a Joint Executive Committee, comprising three members from each authority, which meets quarterly; a joint scrutiny committee that meets twice yearly; and a joint Direct Services Organisation headed by a partnership director. The partnership works to a business plan agreed annually by the Joint Committee and approved by both councils.
There have been positive outcomes from the partnership, both financially and operationally. Financial outcomes include annual savings in six figures from a combination of management savings (for example, through shared managers for some services), and procurement efficiencies. Operational outcomes include the employment of a dedicated horticulturalist, which neither council would have been able to justify or afford individually.
Performance has also improved. In Test Valley, for example, the number of missed bins fell from 213 per 100,000 in 2003/04 to 48 in 2004/05. The councils also learn from each other. New Forest, for example, has implemented a green waste scheme based on the approach taken by Test Valley. 8 Both authorities feel that the partnership has provided a solid platform for further phases of integration, and could produce even bigger savings and performance improvements should it realise its full potential.
How did the innovation happen?
The initial idea was adopted by both Chief Executives and supported by politicians. An options appraisal report followed in 2001 and a joint project team with officers from both authorities then developed the project. 'The Partnership Proposal', published in May 2002, set out the business case for proceeding with the new joint venture supported by a first-year business plan. The report was critically challenged within Executives and Councils and accepted in November 2002. The partnership was then mainstreamed as policy and a commercial agreement signed by the two authorities.
Part of the reason for a high-level willingness to support the initiative was the ability to demonstrate that efficiency savings could be achieved. The development and implementation of the project were carried out using the existing resources of both councils. The councils were unable to access any external funding to support the work despite approaches to regional agencies.
As the councils worked through the project they were aware that an unravelling of the partnership was possible if required. But both authorities are enthusiastic about the future direction of the partnership and the Gershon efficiency agenda has added new impetus for future back office savings. Test Valley has made an explicit commitment to innovation in its corporate values and seeks to embrace change where it will deliver improvement.
What helped to get it started?
At Test Valley concerns regarding identified areas of poor performance meant the case for change was relatively easy to make. A Compulsory Competitive Tender culture also helped to secure the support of the workforce and unions. As part of the wider political climate, in particular the national Best Value regime, New Forest had begun to think seriously about the possibilities afforded by partnership working.
The involvement and commitment from the outset of key players and decision makers allowed issues to be dealt with straight away. Although John Mascall had initially identified the business opportunity, the support of key Heads of Service (Finance, Legal and Personnel) from both authorities was fundamental to the process and their buy-in helped to secure the support of senior decision makers. There was also a desire to promote efficiency, and politicians could see that savings were costed and achievable.
The compatibility of the authorities' structures and culture was also important. Both councils have open cultures - they look outside their organisations and adopt good practice, and carry out brainstorming events and away days. Both councils were confident and willing to try something new.
What helped to keep it going?
The knowledge that the changes were reversible helped. The councils took things step by step so that confidence could be built as positive outcomes became clear. The steady approach helped confidence building, as it meant that risks were manageable and retained equally by each council.
The energy of the key officers involved and an ongoing commitment from senior managers and members has also been important in keeping up momentum, particularly as some two years elapsed between the original vision and the councils putting pen to paper on the partnership.
What helped to share the learning?
Although the authorities haven't pro-actively sought to disseminate learning from their partnership model to peers, they have taken opportunities where these arise, including speaking to the Chief Executives and leaders at Hampshire and Dorset.
The authorities have also had discussions with the Improvement and Development Agency (IDeA), and the Innovation Forum group of councils, but the benefits of doing so have not been clear or sustained, beyond a case study on the latter's website. They maintain an awareness of opportunities arising through the Beacons scheme but their partnership has never quite fitted with any of the Beacons' themes.
Challenges along the way
There were clearly sensitivities among staff about the new structure, including fears of redundancies, questions over possible duplication of roles, control of budgets and the provision of support services. Support for the proposals was achieved through a programme of detailed briefings with staff and meetings with union representatives. The employees' union representatives endorsed the project's aims and objectives in a written statement.
There were also some cultural differences to be overcome. This stemmed from the legacy of the authorities' respective delivery arrangements - at New Forest the client and contractor roles were relatively integrated, whereas at Test Valley there had been a more pronounced split between client and contractor roles.
What next?
The councils are currently reviewing the possibilities of a further stage in the partnership, potentially involving further consolidating joint working practices including: bringing together employees' terms and conditions in a single employer relationship; considering what other services could play a role within the partnership; reviewing the way support services are organised; and assessing the potential for joint policy and strategy advice.
The councils are thinking innovatively about delivery and are considering options for future governance models including the formation of a jointly run not-for-profit organisation. Successful implementation of the initial innovation has given members and management team confidence in taking forward the project.