Essex Cares combines private and public sector know-how

 Care worker Elizabeth Ashkarian with client Joe Ennis Essex Cares’ Tyrells day cente

Essex Council is combining public and private sector expertise to deliver services through a local authority trading company. Mark Hunter reports on the “third way” model of care

When Essex Cares was launched last July it was hailed as the “third way” for local authorities looking to protect their in-house social care services in the face of budget cuts and diminishing commissioning power due to personalisation.

While other councils were paring their services to the bone, or putting them out to tender, Essex Council came up with an innovative solution that seemed to offer the best of both private and public sectors.

The council created its own local authority trading company that would operate as a commercial enterprise. Any profits would either be returned to the council, which remained the sole shareholder, or ploughed back into the company to improve services.

The council took the decision in response to the personalisation agenda and the fact that users given personal budgets may choose not to spend them on local authority-run services.

“We looked at a number of models [including putting the services out to tender or creating a social enterprise] and held consultations with service users and staff,” says Liz Chidgey, Essex Council’s deputy executive director of adults, health and community well-being. “In the end, the trading company option gave us the most flexibility while keeping the local authority ‘brand’ that service users value and trust.”

An interim management team was duly appointed and 850 council staff were transferred to the new organisation. Essex Cares now employs nearly 1,000 staff and provides support to about 100,000 people each year. Its services include home and day care, an equipment service, and helping to improve employment and inclusion for learning disabled adults.

One year after its launch, Chidgey is pleased with progress: “Essex Cares is financially sound and, looking at its key performance indicators and Care Quality Commission requirements, we have no concerns over the standards of service.”

The relationship between the council and the company is “subtle”, says Chidgey. “The council is just a commissioner now and we have to treat Essex Cares like any other independent provider. We are not allowed to give it any commercial advantage over other providers so, although we are the sole shareholders, we stay at arm’s length.”

Mark Lloyd, Essex Cares’ interim managing director, likens the relationship to parents with a child. “But we are growing up fast,” he says.

Lloyd says Essex Cares can offer a more efficient service than was possible from within the local authority.

“There’s a cultural difference,” he says. “We are geared up for quick decisions, we have a flattened hierarchy and staff are more accountable. The service has become more responsive to service users’ needs and it’s a lot more flexible. For example, we can now cater for self-funders.”

As evidence of the benefits of this approach, Lloyd points to improved staff morale, the restructuring of domiciliary care into a reablement service that is better suited to user-directed support, and significant savings on backroom costs.

“Sickness absence has plummeted,” says Lloyd. “We have also made big savings on non-direct costs, for instance by having an HR team that is a lot smaller than at council level. We do buy back some services from the council but we are free to go to the market and seek a better deal. Traditionally, the provider arms of council services can be the poor relations. This model allows all the parties to negotiate on the same level.”

Relations between Essex Cares and the trade unions are cordial, despite some teething troubles.

“The consultation process was very good,” says Unison assistant branch secretary Sue Dainey. “We were pleased they decided to keep all the services together rather than break them up and sell them off, which is what they did with residential care. The transition went well and staff pensions are still with Essex Council. So everything was fine until the first pay day. Then the system went down and no-one was paid.”

With that glitch quickly sorted, industrial relations returned to normal.

“We still argue, but generally things are okay,” says Dainey.

Service users have few complaints. Mike Adams, chief executive of the Essex Coalition of Disabled People, says they are not concerned about the model of service delivery, as long as the quality remains high.

“What disabled people require from Essex Council is high quality service and that’s the case whoever the provider is,” he says

One area of possible conflict is a plan mooted by Essex Cares to introduce a personal assistants service. This could be in direct competition with a similar service offered by the disabled people’s coalition. However, Adams does not see this as a serious threat.

“There are so many people out there who need support and there’s a huge demand that needs to be addressed,” he says. “So I think we can form a mutually beneficial partnership with Essex Cares to address that need.”

Essex cares in numbers

● Number of staff: About 1,000 (850 moved from Essex Council under Tupe)

● Number of service users: About 100,000

● Company turnover: £35m

● Backroom cost savings in first year: £1m-£2m

● Reduction in sickness absence in first year: 16% to 4%

➔ More information on Essex Cares  

Read more on Community Care’s special report on the future of in-house services

Councils weigh up future of in-house adult care services

Outsourcing for and against

This article is published in the 29 July 2010 edition of Community Care under the headline “Best of both worlds”