Written submission from Lambeth Council (LPG 37)

 

Lambeth is one of a growing number of councils that are becoming cooperative councils. That means putting people who use our services or live in our communities in control of the decisions that affect their lives. At its core it is about citizens, councillors and council staff working together to determine local outcomes and how best to deliver those.

 

We understand that the central focus of the inquiry is about delivering good value for money. Our submission focuses on this in the context of our cooperative council approach. Our approach, based on cooperative commissioning, is more sophisticated than a traditional value for money approach and requires a deeper understanding of what value means for the community and citizens of Lambeth.

 

Over the next few years we need to make each pound count for more and need to realise the maximum possible direct and indirect benefits for the people of Lambeth.

 

  1. Delivering value for money and social, economic and environmental objectives, including stimulating the local economy.             

 

Cooperative Council

 

1.1              Lambeth is one of a growing number of councils that are becoming cooperative           councils. That means putting people who use our services or live in our communities in control of the decisions that affect their lives, because that way you get more responsive services and more resilient communities. At its core it is about citizens, councillors and council staff working together to determine local outcomes and how best to deliver those.

 

1.2              Top-down public services do not work because they fail to understand the needs and fail to harness the insights of the communities for whom they exist. Services often fail to meet community needs because citizens – the people who use public services – lack the power to make them change to suit them, so they become increasingly provider-led.

 

1.3              The cooperative council is about building on the assets that exist within the community to deliver on the outcomes citizens want to achieve. For example, the Council made an open call to citizens to ask them if they would like to be green community champions and asked them to define what they wanted to do, supported by a single office. There are now 500 champions working with over 60 groups and 5,000 residents on local environmental issues – from food growing to community energy projects. It has led to more innovation and community ownership than if the Council had pre-defined things at the outset.

 

1.4              This approach creates resilience among communities, fosters aspiration and breaks dependency on the state. A diverse supply base offers our citizens more choice, is more competitive and more likely to meet their needs. Through this approach we make sure that every pound we send realises the maximum possible direct and indirect benefit for the people of Lambeth. This is more sophisticated than a traditional value for money approach and requires a deeper understanding of what value means for the community and citizens of Lambeth. Value might mean a local voluntary or community group running a youth centre instead of a commercial body as they have links to the community and provide employment opportunities locally. By doing this the service is run and delivered by local people who use the service which might mean that a young mum who is struggling to find employment now has the experience and confidence to do so. This is the prize of the cooperative council approach – which more traditional approaches to public service fail to understand.

 

1.5              This kind of approach – where the community say what they want to achieve, can influence what services they receive and be involved in running parts of them   demands that the Council: a) recognises and supports assets in the community, that are helping to deliver the outcomes residents want and b) helps community assets to grow - which needs facilitation and support. The community is a complex patchwork of different interests sometimes overlapping each other with variable capacity and resources of their own to offer. By taking this approach the Council needs to start thinking of itself not primarily as a service deliverer, but as an enabler, a guarantor of high standards of quality and safety and providing strategic oversight and accountability.

 

How we got here

 

1.6              Our approach is part of a continuing journey. In 2009, our Cabinet and senior management were examining our future finances and we felt we were faced with a bleak picture. We asked ourselves how local public services can deliver good outcomes for the coming budget reductions and what should the relationship be between the citizen and public services.

 

1.7              Answering those questions led to a white paper and we tested our propositions through an inclusive commission. The commission’s findings were published in a report, “Sharing Power: A new settlement between citizens and the state” which contained  recommendations for what would need to happen for the cooperative council to become a reality.

 

1.8              The approach builds on the boroughs strengths; Lambeth has a blend of committed politicians and dynamic community activists. The Council has learnt much from a number of areas that are already working cooperatively and through a range of early projects – what we call early adopters – and we are now building on the approach.

 

Early Adopters

 

1.9              Lambeth’s approach has never been pursued before. We have achieved:

 

 

1.10              In terms of procurement we have learnt that we need to make our processes as simple as possible as it takes time for community groups to form collaborations and work together to develop a bid. Ward councillors also need to be involved from the outset. Through these and other early adopters we have worked to understand our markets better, got better at understanding community need and have become more skilled at asking their opinion about what we do. Importantly, we are focused on outcomes not services which are the cornerstone of our cooperative commissioning approach.

 

Cooperative Commissioning

 

1.11              We have started to change how we work so that citizens are at the centre of all our activities. A fundamental part of this is the introduction of cooperative commissioning as Lambeth’s way of working. It means putting the citizen at the centre of all that we do, from deciding the outcomes we want to achieve; through to selecting which activities and services are delivered.

 

1.12              Commissioning is well established in many areas of local government. For many authorities the main reason for commissioning has been to cut costs or back service provision. In Lambeth, we want an approach that focuses not only on cost but also social value and the benefits of different ways of running services.

 

1.13              Led by Cabinet, once the desired outcome has been identified, the Council will work with citizens through a cooperative commissioning process that includes:

 

 

1.14              Procurement is an element of the commissioning process through which the Council looks to deliver social, environmental and economic value.

 

 

 

 

 

Figure 1:  Lambeth Cooperative Commissioning Process

 

 

 

1.15              Cabinet members have a fundamental and strategic role in assessing whether or not the outcomes are being delivered, they also have a role in deciding whether procurement processes need to be flexed to enable greater social, economic or environmental value to be secured. Councillors are the guarantors of cooperative commissioning; ensuring democratic accountability, leading and galvanising the community and acting as commissioners.

 

1.16              Citizens are directly involved in every stage including the options appraisal, which is where we look at what will help to achieve outcomes. They are uniquely placed to assess social value – and should be central in defining what social value is in Lambeth and how it should be delivered through our procurement practice.

 

1.17              In the context of cooperative commissioning delivery is likely to be through a mixture of in-house, private sector, social enterprises, and voluntary and community organisations. Some may be organisations which are owned by the council but are managed at arm’s length, providing a degree of autonomy, others may be embryonic or emerging community enterprises that are very small in scale. The decision to determine which organisation or organisations are used to deliver is determined through the options appraisal and acquisition phases of the cooperative commissioning cycle. It is also determined on the basis of where greatest value – including social value – can be delivered.

 

1.18              This is what marks out the difference with cooperative commissioning; it is designed to ensure that the method of delivery supports the outcome being sought in addition to the specific activities acquired.

 

1.19              We have invested in leadership development and capacity building and target social enterprises with small contracts to help achieve this. Initiatives include setting up a foundation that has overseen Britain’s first parent promoted secondary school and seeking EU funding to create an electronic Brixton £ to be used as a community currency.             

             

Value for Money

 

1.20              Our commissioning approach is based on capturing greater social, economic and environmental value, as described. We are working in partnership with our providers to ensure all of our contracts deliver to our community outcomes. A narrow focus on value for money ignores what value means for the community and citizens of Lambeth as well as the role that third sector, social enterprises and community-led providers play. These providers need to be seen as equal and legitimate players in procurement and commissioning.

 

1.21              We are acutely aware of the financial pressures facing local government and the difficult economic climate in which Lambeth’s citizens and businesses are operating. A change in the Council’s ways of working cannot be at the expense of sound financial management, nor can it prevent Lambeth from responding to the changing needs of its citizens.

 

 

1.22              These challenges and the increased pressure to do more with less means that driving down price will rarely be enough and we need to do things differently. This means a rigorous focus on outcomes – only procuring what will achieve real change and ensuring we maximise the value of all of our procurement. We recognise that achieving value for money is only partly down to how we do procurement, just as important is how we commission to ensure that every pound spent is achieving the outcomes that matter and make a difference to citizens.

 

1.23              We have recently entered into a contract with Capita to provide our customer service functions. This is a good example of how more conventional contract negotiations can be developed to adopt the cooperative principles. As well as judging tenders on standard contract criteria such as price and quality, bidders were asked to demonstrate how they could contribute to the cooperative council. The bidders proposed substantial financial support for community initiatives and a comprehensive apprenticeship scheme. We can enforce this element of the contract, so if these outcomes are not delivered the contract can be terminated – this contrasts with the need for the provider having to make a “best endeavour” to provide the community benefits stated in normal contracts.

 

 

1.24              We are also very proactive in finding shared services opportunities and using central purchasing bodies and joint partnership tenders:

 

 

 

1.25              In 2011 Lambeth established a partnership with 5 other London boroughs to procure the Oracle R12 suite including finance, HR and procurement modules. Recently a number of other boroughs have signed Memoranda of Understanding that means they will also join the partnership. The expectation is that the joint procurement will lead to shared service arrangements for a range of transactional services including finance, HR and procurement.

 

1.26              The total estimated value of the procurement for all authorities participating in the tender is in the range of £74.0m to £88.5m for the four years of the framework.

 

 

Social Value

 

 

1.27              Our approach to cooperative council requires a nuanced approach to value and to social value. Understanding what citizens’ value is central to what we do. While the benefits of delivering greater social value from how we award contracts are real, as detailed below, recognising the value of wider, whole system social benefits, and supporting officers to reduce bureaucracy simultaneously is key.

 

 

1.28              In Lambeth we have a strong and growing track record of using our procurement process to deliver social and policy benefits over and above the direct benefits of the services being bought. For example, our Facilities Management contract promotes good employment practice (through the London Living Wage) and opportunities for young people (through apprenticeship commitments). In the contract we are letting for banking services, we will be looking for our future bank to support our ambitions to tackle financial exclusion and promote responsible lending to individuals and local businesses (amongst a host of other community and employment benefits). Our community benefit checklist assists officers and Cabinet Members in deciding the possible benefits for each contract. 

 

 

Local Economies

 

1.29              As described our approach demands that the Council: a) recognises and supports assets in the community, and b) helps community assets to grow - which needs facilitation and support.

 

1.30              We are committed to doing business with a diverse supply market, including small businesses, social enterprises, voluntary and community sector and apprenticeship schemes.  Lambeth has streamlined procurement PQQ, tender and quotation processes in order to make it easier for smaller businesses to do business with the Council; we foster relationships with the third sector and social enterprises to build capacity and work to remove barriers that may exist to doing business with the Council, as described.

 

1.31              We support: supply chain based apprenticeships programmes for Lambeth residents, capacity building workshops for SMEs and voluntary and community organisations and “Meet the Buyer” events where local businesses can meet Lambeth's purchasers. The recent Facilities Management (FM) tender for Lambeth secured the winning supplier's investment in local Lambeth businesses though an SME capacity building programme.  The key FM supplier will provide business support for a group of local FM businesses who need help to develop their business capacity.  The goal will be to up skill these businesses in order for them to join the FM supplier's supply chain. 

 

1.32              Each year Lambeth Council compiles and analyses its procurement information into a procurement expenditure report.  This report is published on our website so residents and stakeholders can see where and with whom Lambeth spends their procurement budgets; no other council in London produces and publishes this type of report. 

 

 

 

  1. Empowering communities needs a new kind of council

 

2.1              The shift to cooperative commissioning as the standard process by which local outcomes are determined is not an end in itself but will facilitate the rebalancing of power between citizens and service providers. Through the early phases of the cooperative council we have learnt that achieving this requires a different structure and operating model for the Council. The ‘traditional council’ where decisions are taken at the top, filtered down through services (housing, education, environment etc.) and are then acted out on the community below, will not empower communities. Put simply, we cannot achieve the ambition without the right infrastructure. To do this we have shifted from service delivery based on traditional departments to one where functions are clustered as:

 

 

2.2              This model recognises that the community is not a cohesive whole that can be supported by inflexible services but a complex patchwork of different needs, made up of communities of interest of varying sizes and with variable capacity and resources of their own to offer. The Council also acts as a platform for services like IT, finance systems, HR, legal – support services which can help community-led services get off the ground and avoid duplication of costs elsewhere.

 

2.3              Our approach to re-shaping, is, therefore underpinned by a commitment to be:

 

 

2.4              The key to unlocking the potential, if our organisation is to work collaboratively with both our citizens and communities, rests in all levels of the council taking seriously their responsibilities as leaders. Whether supporting the council’s commissioning activities, delivering key activities or providing support that enables community to deliver, collaboration is an absolute necessity. No one part of the system is any more important than another.

 

2.5              This change requires staff to be more facilitative and enabling. To support this we have a new behaviours framework. Lambeth staff need to be committed and invested in Lambeth and be ambitious for the borough. Our new behaviours include:

 

 

2.6              We have also changed the Council’s constitution so that individual cabinet members act as commissioners. We will make further revisions as we work to put the citizen at the centre of what we do and to accommodate new types of operating relationships with mutuals and social enterprises and community-led commissioning.

 

  1. Conclusions

 

3.1              Lambeth’s journey works because of its DNA but local government can become an enabler that brings together communities to help them achieve the outcomes they want, achieve value for money and to deliver in ways which make sense of the way people actually live their lives.  Councils are critical to this agenda and those that embrace the concept provide the building block for local accountability, funding, assets, commissioning community-led services and technical expertise.

 

 

September 2013