Tag Archives: Westminster City Council

Mutuals: “lean, people-focused businesses” trying to “climb a wall of technical complexity”

By David Bicknell

There are some insightful comments from Co-operatives UK’s secretary general Ed Mayo and the London Borough of Hammersmith & Fulham’s Andy Rennison on mutuals in this piece by People Management.

Mayo is quoted as saying, “At the moment we are asking people in public services to climb a wall of technical complexity, and the most urgent task for the mutuals programme is now to simplify it.”

He highlights taxation and procurement as the areas in most need of attention, and would ultimately like to see public sector mutuals given the same special dispensation as they have in Italy.

Rennison, Hammersmith & Fulham’s mutual lead, provides an interesting description of a well-attended bidders’ day held where 28 private organisations expressed an interest in being backers of the tri-borough’s (Westminster City Council and the London Borough of Kensington and Chelsea are also involved) schools IT services mutual project.

 “The feedback from one organisation was that we had too many people, we’ve got to cut this and cut that. But we felt that, actually, no, we’re already quite lean with a clear business plan which we’re confident we can deliver. That demonstrated their lack of understanding about what this business does – it’s a people-focused business.”

Tri-borough mutual plans to save £1m in costs for London councils

By David Bicknell

Council staff across three London boroughs who are setting up their own employee-led mutual to take over school support services expect to save a million pounds over four years.

The three councils – Hammersmith & Fulham, Westminster and Kensington & Chelsea – already share several services, which they say is enabling them to reduce back office costs to help protect frontline services from the public spending squeeze.

Now, a statement issued by Hammersmith & Fulham for the three councils says the staff involved in supplying support services for schools across the boroughs are “putting the finishing touches to plans to set themselves up as an employee-led mutual.”

Andy Rennison, assistant director in Hammersmith & Fulham children’s services, who has been leading the mutual project, said, “Staff in these areas have experience of trading with schools and are excited about the new challenge. We feel that having more control, flexibility and being able to develop a more commercial approach will benefit schools, the mutual staff and the three councils.

“If the venture is successful, and we have every reason to think so, the councils will receive 50% of the mutual’s net profit to reuse in providing educational opportunities.”

The mutual will pilot the new arrangements for four years, with support from a joint venture independent sector partner, currently being selected through European procurement processes.

Hammersmith & Fulham says an open day for potential bidders held on January 24 attracted around 60 delegates.

The project is being supported by the Cabinet Office which picked Hammersmith & Fulham to be a Pathfinder  to explore new ways of delivering public services more efficiently. The services include financial management support and budget planning, IT and building development projects, as well as strategic advice to councils.

Francis Maude, Minister for the Cabinet Office, said: “Front line staff know what local people want from public services. The mutual model being pioneered in Hammersmith & Fulham will give staff the power to do things the way they know works best. The evidence is clear, when staff have a real stake in their business productivity rises and customer satisfaction grows.

“This Pathfinder mutual is particularly groundbreaking as staff are forming a ‘joint venture’ with a partner organisation that will help to develop the business further. I commend the staff leading this exciting project for their achievements and hope many more will follow their lead.”

“We are very pleased that staff across the Tri-borough area are excited about this opportunity and taking the lead in this Pathfinder. After the initial four years, the service will be retendered on the open market to ensure that taxpayers continue to get the best possible value for money in the longer term,” said Hammersmith & Fulham cabinet member, Cllr Helen Binmore.

Independent adviser OPM was asked by the Cabinet Office to provide expert support to Rennison and his team as part of the Pathfinder programme.

OPM chief Executive Hilary Thompson said; “Elected members, managers and staff at Hammersmith and Fulham have shown real commitment and energy throughout the process of developing the staff mutual. This is an innovative example of a council recognising and seeking to realise the potential of employee ownership and new ways of working.”

It has emerged that academies and free schools will provide a future opportunity for the mutual to extend its services. There are currently two free schools and two academies in Hammersmith, with more in the pipeline.

Further background information on the mutual is being made available in a Hammersmith & Fulham Cabinet report.

(Thanks to Ian Makgill of government contracting specialist Govmark for his help with this story)

Related Links

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London Borough of Hammersmith & Fulham mutual process ‘continuing’

By David Bicknell

The London Borough of Hammersmith & Fulham told Campaign4Change today that the council is continuing to work its way through tenders received in January in response to an invitation to tender (ITT) for  “an innovative independent sector partner (ISP) to participate and invest in the creation of a Mutual Joint Venture Company.”

The mutual, which is due to be up and running in September 2012, will cover services to schools across three London boroughs working together: Hammersmith & Fulham, Kensington & Chelsea, and Westminster City  Council.   

In response to a Campaign4Change call checking on progress, a spokesperson for the London Borough of Hammersmith & Fulham said the tender evaluation process was ‘continuing’, as normal.

The ITT which closed in January, had indicated that “the ISP will take responsibility for the creation of the joint venture company, whose shareholding will be shared between the ISP and the employees (held on the employees’ behalf in a trust). The Contracting Authority will have a contractual arrangement with the Mutual Joint Venture company to provide some of the services, supplies and works listed….. for a period of not less than 4 years.”

Hammersmith & Fulham Pathfinder tender hints at September start

Hammersmith & Fulham Pathfinder tender hints at September start for schools mutual

By David Bicknell

 Campaign4Change has kept a watch on the progress of the Pathfinder Mutual at the London Borough of Hammersmith & Fulham, which is looking to create a mutual for school support services.

The mutual will actually cover services to schools across three London boroughs working together: Hammersmith & Fulham, Kensington & Chelsea, and Westminster City  Council.   

Now a tender opportunity for the project has been  listed on the Londontenders.org website. The anticipated start date for the contract is 1st September 2012, running to 1st September 2016.

It appears from the tender that the three boroughs are looking for “an innovative independent sector partner (ISP) to participate and invest in the creation of a Mutual Joint Venture Company.”

The tender says that “the ISP will take responsibility for the creation of the joint venture company, whose shareholding will be shared between the ISP and the employees (held on the employees’ behalf in a trust). The Contracting Authority will have a contractual arrangement with the Mutual Joint Venture company to provide some of the services, supplies and works listed….. for a period of not less than 4 years.”

The tender goes on: “The Contracting Authority is working closely with the Royal Borough of Kensington & Chelsea and Westminster City Council, and it is intended that staff from all three boroughs will be transferred into the Mutual Joint Venture company under the Acquired Rights Directive (the UK’s Transfer of Undertakings (Protection of Employment) Regulations 2006). The Contracting Authority is procuring on behalf of education bodies within the London Borough of Hammersmith & Fulham, Royal Borough of Kensington & Chelsea and Westminster City Council for an independent partner to set up the Mutual Joint Venture Company.”

Interestingly , the scale of services to be offered by the Mutual Joint Venture Company is extensive, everything from ICT services and ICT supplies to architectural, building and security services.

The closing date for expressions of interest in the tender is 31st January.

Hammersmith & Fulham mutual Pathfinder expected to launch in 2012

Hammersmith & Fulham mutual Pathfinder on track for ‘early 2012’ launch

By David Bicknell

I recently  spoke with the London Borough of Hammersmith & Fulham about their mutual ‘Pathfinder’ project, which is due to be up and running in 2012.

The current plan is for all three boroughs  – the other two are Kensington and Chelsea, and Westminster – to join the mutual in ‘early 2012’.

The three boroughs are now developing the full business plan for the mutual and are looking at the sustainability of the project, with a shadow board of directors meeting regularly to discuss and work out the finer details about how to bring the three teams together across the boroughs.

Other work is going on to finalise the tri-borough mutual vision statement and create a company name (word has it that the current working title is 3BM: Three Borough Mutual) and logo ,which all staff members have been able to contribute to  to reinforce the employee ownership of the scheme.

Meanwhile a mentor from the John Lewis Partnership is working with the fledgling mutual to provide what’s described as ‘invaluable support’ on the shareholding model.

Hammersmith & Fulham mutual Pathfinder expected to launch in January 2012

By David Bicknell

One of the Government’s flagship employee-led mutual Pathfinder pilots is now expected to be launched in January 2012 and be up and running by Spring next year.

The mutual, which is being led by the London Borough of Hammersmith & Fulham, but is part of a tri-borough business model with Kensington and Chelsea and Westminster, will have ‘social enterprise status’ and will deliver existing education support services to schools and some services back to the Local Authority.

A recent report on the mutual plan published by Hammersmith & Fulham proposes a pilot scheme to set up an employee-led mutual to deliver services to schools and the council (with the council commissioning some services from the mutual for a four year period). These services are currently delivered by schools resources division within the Children’s Services Department. The pilot proposal follows the council’s five stages of transition for staff wishing to develop so-called “New Ways of Working.”

The guiding principles of the proposed scheme are that:

• Staff and financial risk are transferred out of Hammersmith & Fulham

• The pilot will have the opportunity to develop its market share not only within the three boroughs, but much wider, such as with Independent Schools and Free Schools. The council says this will enable a more robust delivery model and further financial benefits through economies of scale

• A form of Mutual (John Lewis Partnership) model of staff ownership encourages business focus. It is intended that all staff will become shareholders, with shares allocated proportionally to responsibility/commercial value

• The mutual offers more than just delivery of the council’s medium term financial strategy plans, but presents opportunities for the Council to further benefit from the outset and again if the venture proves highly successful

• The mutual is part of the tri-borough merger and follows the principle of removing the direct delivery of discretionary services

One of the key drivers for the mutual is the council’s desire to drive a more “commercial” approach to service delivery whilst delivering efficiencies in line with its medium term financial strategy. It has  proposed that the Schools Resources Division which currently offers support to the Council as well as trading directly with Schools, offers a unique opportunity to pilot these ‘new ways of working’ whilst further driving efficiencies in Children’s Services.

To put the drivers into context, Hammersmith’s Schools Resources Division must deliver annual reductions totalling £475k of savings over the next three years; a 34% reduction in its baseline spending. It says, “Maintaining the confidence of schools through effective service delivery efficiencies requires creative solutions. This proposal provides an opportunity for piloting a ‘New way of Working,’ whilst exceeding the proposed medium term financial targets. It offers a broad package of services that by externally trading provide opportunities for expansion to deliver savings, whilst taking advantage of additional opportunities available through the tri-borough merger.”

It adds, “As part of the development of the business model, tri-borough partners in Westminster (WCC) and Kensington and Chelsea (RBKC) have identified opportunities to expand the scope of the mutual to provide IT services to schools in RBKC and WCC. Any tri-borough partnership will be subject to all the respective Cabinets’ approval, although the opportunity supports the joint strategy of progression for the three directly managed services.”

Although it is possible numbers might change, the report indicates that the proposed mutual “will be comprised of 21 Hammersmith & Fulham staff from the onset, with the additional inclusion of 12 ICT staff from Kensington and Chelsea (subject to RBKC Cabinet), and a further 7.8 ICT staff from Westminster (subject to Westminster Cabinet and further due diligence). Both Councils are expected to join the proposal between January 2012 and April 2012, depending upon the most appropriate timings for their respective Councils.”

The anticipated launch date of the proposed mutual is 9 January 2012. Hammersmith & Fulham says this date is a realistic one and is confident of an April 2012 start although further work is being undertaken to establish if the timescale can be accelerated. Hammersmith & Fulham says the inclusion of the other two boroughs will significantly develop the schools market and provide the business with a larger base to manage its operations from.

Some other points are covered in the report:

  • “The Council envisages that all staff will transfer from the Council(s) to the new company under TUPE (The Transfer of Undertakings (Protection of Employment)) Regulations with the possible indemnity for the first twelve months redundancy in line with other outsourced contracts”
  • “In addition, the mutual will reinvest a percentage of its net profit back to the local authorities(where the business is receiving income) for the enhancement of learning for young people, as identified by the Councils. This will be enshrined within the contractual relationship between Hammersmith & Fulham (and other Councils) and the mutual for the four years of the pilot phase where the Council(s) is also commissioning services.”
  • “For the first four years of the mutual the other 50% net profit will be retained by the business to provide a profit for any partners and develop a growth fund and develop the business on a secure footing. Given the national circumstances it is envisaged that there is unlikely to be any pay awards or dividends to the mutual staff in the first few years of the business, although this will be determined by the business and its partner in line with the business progress.”
  • “At the end of the four year period the Council will be tendering the strategic contract and the mutual would be able to compete with other providers and may or may not win the contract. By allowing the mutual four years it can effectively build its client base and develop its offer to schools, such that it should have sufficient capacity to re-direct resources should it be unsuccessful in the Hammersmith &Fulham contract.”

Andy Rennison, Hammersmith &Fulham’s assistant director for schools’ funding and the future director of the mutual, said: “What we do makes a big difference for schools and while we have solid systems, a solid approach and strong brands as boroughs, the status quo is no longer an option for us. We are working against a backdrop of massive financial pressures and that, along with changes in government policy around academies and free schools, means we must fundamentally change the way we deliver our business if we are to survive and grow. Becoming an employee-led mutual gives us a real opportunity to take control of the agenda and further develop a strong and sustainable service going forward.”

Questions and Answers

Q. Who is the lead council on this?

A. Hammersmith & Fulham Council

Q.Do staff from all councils get the opportunity to go into the mutual to work? 

A. Staff from the three boroughs who are engaged in this specific area of work will get the opportunity to go in to the mutual

Q. Are the timings in the report up to date – i.e. when it is planned to be set up (September 2011) and begin (April 2012)? 

Yes, we aim to have it running by April 2012.The mutual social enterprise is currently in the process of being set up and the council plans to go to market in September to procure a private sector partner to assist with its establishment. The tri-borough mutual social enterprise plans to go live from the start of April.

Q. Has this been approved by all three councils and what are the next steps?

A. The proposal to set up a mutual social enterprise was part of the tri-borough implementation plans in education services for all three boroughs. H&F council has approved the option appraisal and initial business plan, which includes authority to go to market to procure a private sector partner. Discussions are still taking place in the Kensington and Chelsea and Westminster boroughs about the final arrangements and staff affected. A tri-borough staff consultation is planned to take place in October.

Hammersmith & Fulham Mutual Proposal Report

Tri-borough Proposals Report