Innovation in delivering adult social care services

adult social services portrait1Andrew Pettinger looks at the potential for innovative ways of delivering adult social care services including via Public/Private collaborations.

A number of local authorities, faced with decreasing budgets and an ageing population, are looking to find innovative ways of delivering adult social care, whether that be for nursing or residential care or using other models such as “extracare”.

The continued statutory duties of local authorities, combined with care and the ageing population being a high profile political issue, means that this is an area where it is very difficult for authorities to simply find savings by cutting the nature of the service. Therefore local authorities are increasingly being driven to find new ways of delivering and/or commissioning care as well as taking steps to replace or refurbish care settings that are within the control of the local authority.

We have recently seen an increasing number of proposed public/private collaborations which have been structured (or proposed to be structured) in a number of different ways, including the following:

  • A simple outsourcing of care services to a private sector provider at new facilities being built under a separate procurement;
  • A 'Design Build and Operate' collaboration under which the local authority conducts a procurement that includes the construction of new facilities, hard and soft FM services and care services;
  • A 'Design Build Operate and Finance Arrangement', which is all of the above but also attempts to source finance;
  • Joint venture or 'LABV'” models with a care element; and
  • PFI or 'quasi PFI' models.

It would also be possible for local authorities to find economies of scale by working with each other either through a joint procurement for care services or alternatively establishing frameworks for care provision that cross geographical boundaries. Though we have not seen it, it would also be possible for a controlled public sector service entity to take advantage of the Teckal exemption and provide services to more than one authority.

Such collaborations often do not yet have direct and easily identifiable precedents to draw from and often involve the letting of care contracts which are for longer periods than a common three to five-year term. We think local authorities should carefully think about the following in any such procurement:

  • Get and (if necessary) pay for the right advice: upfront strategic and structuring advice on financial, financial, legal and technical matters (and how they relate to each other) will be required. Do not overestimate levels of internal know how and/or capacity and budget appropriately before embarking on any procurement route. Be realistic on what this will cost. We have several examples of expensive mistakes being made in this regard.
  • Know what is being bought: Identify upfront what is being bought, be realistic on cost and avoid vagueness in describing the authority’s requirements – if the authority cannot articulate clearly what it wants to buy potential contracting parties will quickly lose interest. This is particularly the case in the care sector where care providers usually have the option of delivering care services through means other than under a local authority procurement.
  • Identify the right structure: many factors will influence this, including funding, land, scale, tax and politics.
  • Work out where the operational savings will come from: be realistic: will this be fewer employers who are paid less? Will it be buildings that cost less to maintain? If not, work out why will the new collaboration be worthwhile before money is spent on putting the collaboration in place.
  • Ensure incentivisation for good performance: if the care contract is for a longer term, carefully think about how the care provider will be incentivised to perform well over such long period though a clearly objectively measurable performance incentive regime.
  • Know the detail of your service and your requirements: For example: will the collaboration require a TUPE transfer – if so, has accurate and full documentation relating to terms & conditions been identified? What existing assets will be used in the new collaboration? How will the local authority interact with the collaboration (e.g. in terms of referrals, allocations and performance monitoring)?
  • Deal with real estate issues upfront: sort all real estate and property aspects upfront and do not make decisions on the form of collaboration unless and until you know that there is a deliverable real estate solution within the proposed timescales.

These are not new issues and are not specific to the care sector. However, because collaborations in the care sector have been less common than in some other areas, we think that more focus than normal is required on the above.

Andrew Pettinger is a partner at Addleshaw Goddard where he leads the firm’s local government practice. He can be contacted on 07775586509 or This email address is being protected from spambots. You need JavaScript enabled to view it..

This article first appeared in the Local Authority Companies and Partnerships (LACAP) bulletin for April 2014. LACAP is published online by LexisNexis. For more information go to Hann Books.