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What are ‘alternative delivery models’?

When we talk about alternative delivery models, we mean the different ways in which public services can be delivered. A range of vehicles come under this heading – Local Authority Trading Companies, Joint Venture Partnerships as well as staff-led mutuals. Each offers a different set of opportunities (and challenges in set up) for public bodies that are looking to move service delivery away from in-house provision to a new model that allows improvements, efficiencies or growth.

What is ‘spinning out’?

Spinning out is a term used to describe the transition of in-house services into a new organisational structure outside of the direct control of a public body. The service continues to operate, often with the same staff and in the same locations, but it has ‘spun out’ of the public sector into a standalone enterprise.

What is a mutual?

Mutual is a term that refers to the ownership of an organisation. The phrase ‘public service mutual’ has become shorthand for an organisation which has left the public sector but continues to deliver public services. Strictly, a mutual is an organisation in which employees hold majority ownership. In practice, the extent to which employees control and influence how the business is managed plays an equally significant role in determining whether an organisation could be called a mutual.

What is a social enterprise?

A social enterprise is a broad term for a business that exists not to make private profit – but to serve a social or environmental purpose. The difference between a social and an ordinary business is that a social enterprise reinvests any profit it makes (which are often referred to as a surplus in social enterprises) in the business or the local community.

Like any business, a social enterprise needs to be set up as a legal company and be officially registered. There are various forms of company that a social enterprise might take, the most common form is the Community Interest Company (or CIC).

Enterprise in public services… This is about privatisation then?

No. It is actually about offering public bodies a real alternative to outsourcing to the private market. It is about bringing some commercial reality to services to help drive the efficiency and innovation necessary for them to survive with shrinking budgets and increasing demand. It is not about generating profit for shareholders out of public money, though.

It is about increasing staff and community engagement and control over services and using greater operational independence to enable services to forge better, more responsive relationships with the communities they serve.

Does this save money for public bodies?

Yes it can – and it can do so without services being cut or ‘salami sliced’. Depending on their structure, spin outs may be able to secure additional income streams or investment that is not accessible to public bodies. Realistically, savings are usually not achieved immediately – this is part of a long term transformation of services with savings achievable over a period of time after a period of transition and repositioning

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Got Another Question?

Contact us and we'll be glad to try and answer it.