PPPs in British social services sector A4e experience

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1 About A4e Hbksjdhaa akdhad dahda dhadh adak ada dakdka dkad dad dioofr eeorr rirh rrjr ruj rjjrwjrfw ghh eye t jkk lun gggg sgs dgdd gf iirrn of fogmv osj do djg fi fnb jgv vjddsm Roy Newey A4e Group Director PPPs in British social services sector A4e experience 1

2 Who we are.. Mission: Improving People s Lives Business : Running front line public services Market: International public service reform Sectors: Customer facing public services Service : Customer at heart of design - personalise Outcome: Win/win for client and government High quality, value for money, high performing services A4e an organisation with a social mission A few facts A4e launched in Now a 180 million company Employs 3,500 people across 250 locations One of the world s largest providers of welfare, vocational training and employment services on behalf of Governments Operating in Europe, Middle East, India, Africa and Australasia Our services - five pillars Employment and welfare Education, skills and vocational training Enterprise and entrepreneurship Exclusion and advice to the disadvantaged Export and international services 2

3 PPP at the core of what we do A4e works with the UK government, local authorities at different level, government agencies and other public bodies to deliver as a private company services that until now have been delivered by these entities The sectors we work in in this form are: Unemployment assistance and welfare to work services Financial advice, debt managemetn support Prison education services Disability assistance Social care Business start-up support, entrepreneurhip promotion Our vision of labour market (and outside of it) The A4e Unemployment Funnel Employees In Employment Barriers un-related to the Labour Market LTU Hard to Place Excluded Youth Social Barriers 5 Inactive Older people Lone Parents Sick/disabled 6 Removed from the labour market Offenders More and better Jobs and training on the job Up-skilling and vacancy matching Motivation and confidence building and barrier removal Unemployment Duration 3

4 Introduction to social PPPs in the UK PPPs: private sector introduced into public services (health, prisons and education) PPPs at the heart of the UK s successful public service reform agenda - many countries designing and developing PPP projects based on the UK mode Private Finance Initiative most popular in UK Introduced 1992 by Conservative government - boost public investment without increasing public borrowing, Labour goverment in 1997: drive on efficiency and more services outsourced and in PPP form Not easy at the best of times: political, fiscal and institutional barriers must be overcome in order to move from a traditional, public sector model of public service delivery towards one in which public, private and increasingly third sectors work together. Schools and education Building Schools for the Future: - 45bn programme to invest in all secondary schools in England so that all pupils benefit from learning in a 21st century environment. (aims to rebuild and renew all of England s 3,500 secondary schools) - launched by the Department for Children Schools and Families in February At the launch of the programme, - David Miliband Schools Minister at the time, said that: School buildings should inspire learning. They should nurture every pupil and member of staff. They should be a source of pride and a practical resource for the community. - government agency delivering: Partnerships for Schools (also now responsible for helping to deliver the government s commitment to build up to 400 Academies) - BSF is the largest single capital investment programme in 50 years 4

5 Schools and education Now 71 Authorities already named as being in the first 6 Waves of funding in the BSF framework. Each Wave: on average a project of around 150m in capital value (authorities with large numbers of secondary schools will receive more than one Wave of funding) The running order for the early Waves based on criteria of educational deprivation more recently on the concept of readiness to deliver Local Education Partnership a company that will provide long-term partnering services for the local authority to deliver BSF aims joint venture company comprising the local authority, BSFI and a private sector partner The local authority has a contract with the LEP (Strategic Partnering Agreement): exclusive rights to the LEP to deliver projects for a fixed period, likely to be 10 years. local authority as client and commissioner consults stakeholders (including schools) through the Strategic Partnering Board. Performance Effectiveness of operational contracts in PFI, KPMG

6 NHS Local Improvement Finance Trust LIFT PPP model for improving primary care facilities in the UK: projected investment of 1 billion established in 2001 to deliver a new model of investment in primary care. national programme of public/private joint ventures designed to transform health and social care venues into purpose-built public sector infrastructures strategic step change in primary and social care facilities: by summer of 2008, 47 LIFT companies had been established in the UK, working in partnership with local public sector organisations to provide bespoke, tailor made facilities. LIFT covers over half the population of England, involves 87 Primary Care Trusts and 78 local authorities. LIFT is represented in all 10 SHA regions. These companies have generated over Ł1,500 million investment to develop more than 225 new integrated community facilities NHS Local Improvement Finance Trust LIFT East London and City LIFT Announced as one of the first 6 schemes in January 2001, their private sector partner is GSL Babcock and Brown. They achieved financial financial close in May 2003 and began construction of their first building, The Centre, Manor Park, Newham in June of that year. The building opened to patients in September The Centre, Church Road, Manor Park, Newham A 4.9 million purpose built one stop primary care centre that has relocated 3 GPs practices into one state of the art development for patients. It brings with it: District nursing Health visitors Dentistry Pharmacy Diagnostic services (including x-ray, ultrasound and blood testing) 6

7 Performance Effectiveness of operational contracts in PFI, KPMG 2007 Social care Treasury Spending Review 2007: set aside 130 million in PFI credits for Adult Social Care for the three years 2008/09 to 2010/11. The Department of Health launched an Adult Care PFI bid round in Summer 2008 and 9 authorities have December 2008 had the PFI EoI projects approved. Each project now moves forward. Many of them will be using procurement via LIFT for some procurement via Local Education Partnerships is suggested 7

8 Enterprise promotion Furness Enterprise - a public-private partnership supporting enterprise has been recognized as aleading intitiative in the Enterprising Britain competition. - a development agency, formed as a partnership between Government, both local and national and the business community to develop the Furness area of South Cumbria. Effects: jobs created and 45 jobs safeguarded in 2007; 113 jobs created in New Start Businesses in 2007; 190 people accessed employment in 2007 and 300 people retrained through the Re-skill scheme; 650 workless individuals in Barrow s Disadvantaged Wards assisted towards employment; 40 organic growth projects supported against a target of 35; A590 High and Low Newton Bypass opened - a real partnership lobbying achievement; Furness Peninsula Task Force Enterprise Fund renewed with 2.025m of support; GlaxoSmithKline Enterprise Development Fund delivered 187 jobs in 67 companies by July 2007; Furness Enterprise independently reaffirmed as companies first choice for business support. Working together: Gordon Brown agenda and A4e future Local Employment Partnerships: Aim: to give people looking for work the help they need to take up the more than half a million vacancies employers are looking to fill. How? Employers commit to advertise their non-specialist vacancies through Jobcentre Plus, to fill more of the jobs they create locally through the Local Employment Partnerships and take advantage of the skills support available, including through Train to Gain. Result until now: over 100,000 people have been helped back into work since the scheme was created in March Brown: further 200,000 jobless people back into work through the local partnerships in the next financial year. (HM government, Working together 2009) 8

9 How is it working? Evaluation: users are satisfied with the services provided by PFI projects, with 79 per cent of projects reporting that service standards are delivered always or almost always; public authorities are reporting good overall performance and high levels of satisfaction against the contracted levels of service.(overall performance of 96 per cent of projects is at least satisfactory, and that in 89 per cent of projects, services are being provided in line with the contract or better) the services contracted for are appropriate with 83 per cent of projects reporting that their contracts always or almost always accurately specify the services required, with this result getting better the more recent the contract; the incentivisation within PFI contracts is working (payment deductions low reflecting the high performance and almost all projects report satisfactory levels of service after a deduction has been applied, 72 per cent report good or very good performance. (Treasury 2006: Strengthening long-term partnerships) Why is it working so well? Quotes from the providers themselves What you get through PPP is a licence to innovate. All the risk sits with one party, so it s a better environment to try new things, and also, you get economies of scope, so you have more flexibility for staff to multi-task, for money to be re-allocated from one area to another and for all the considerations to be factored in together so you get better value for money. That s why you get better facilities because it s a total solution. You get much more creativity you can get things done that wouldn t be possible in a traditionally-built facility, because there is a willingness to take considered risks to achieve better outcomes. Serco report 2007: Built to serve: the benefits of service-led PPPs 9

10 Virtuous circle UK social PPP models exported - UK at the forefront of PPP development: countries form their own models on UK best practices - Ex. Spanish regional government of Valencia and that of Singapore: launched build and refurbishment programmes for their schools, both adopting strategies similar to the Building Schools for the Future model recently developed in the UK. (Going global, CBI 2007) A4e exports: First Welfare PPP in Israel 2004 launch of PPP Welfare Mehalev 10,000 people Jerusalem 5 year contract Payment to reduce benefits payments Provider incentive based on reduction above 35% baseline Defined area and open end return policy Great success now planning national role out Other countries on our targets list 10

11 Thank you Thank you 11