Faced with budget cuts that threatened its adult social care services, Oldham council came up with an unusual solution: it spun out its services into two companies charged with taking on the private sector at their own game.
“Oldham’s unusual in that a quarter of our service was provided by the council itself, but you could see that we would get forced into outsourcing all or most of these services because of the financial pressure we’re under,” said Paul Cassidy, director of adult social services at Oldham.
Keen not to ditch its own services, the council formed two companies and on 1 October last year transferred its in-house services into them. The first, Oldham Care and Support, was charged with delivering adult care services purchased by the council on residents’ behalf.
“It took the existing business and we’ve given a guarantee to the staff that they will keep their council terms and conditions,” says Cassidy. “That gives them a future so they won’t get sold off later down the line.”
The second company, Oldham Care and Support at Home, is designed to take on the private sector in the home care and personal assistance market.
Branding is why the council believes it can succeed in this market despite its services costing more than some of its rivals. “We found that the public would be willing to pay privately in order to get our care because we are the M&S of the business – we’re reputable, we employed trained staff – you might have to pay a few extra bob but it is good value,” he says.
While staff in Oldham Care and Support at Home don’t get council terms and conditions, it pays a living wage at the minimum and offers staff guarantees in terms of the training they receive.
The creation of the companies, Cassidy admits, wouldn’t have happened if it wasn’t for reducing budgets, but he says staff have already embraced the less hierarchical structure working in a company offers. “It’s a very different way of working – some of the staff love it because there is a lot more opportunity to get involved and do things and it seems to be getting more innovation than we had previously,” says Cassidy.
Employees are also getting the chance to earn bonuses, although its a far cry from City banker levels. “All the staff are going to get a bonus, the staff divvy we call it, as a result of the first six months of work,” says Cassidy. “It won’t be a lot of money, it’ll be about 40 quid, but interestingly the staff themselves voted for everyone to get paid the same regardless of their grade so everybody’s got an equal share.”
Ultimately Oldham hopes the move can help offset the impact of future budget cuts.
“We know we have to take around £4m of cuts in the first company in the next couple of years, but we’re hoping to make that up by getting £4m of additional business from self-funders, from people who have the Independent Living Fund and picking up work from the health service,” he says.
“We are already picking up work from the private sector, where people are swapping out of private home care providers into our trading arm.”
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