Co-operation and care: CLES pushes a new economy solution to national crisis

The report was commissioned by social services directors in the north west of England

Co-ops and other community business models can offer a way out of the crisis in social care in the UK, says the Centre for Local Economic Strategies (CLES) in a report highlighting successes by local authorities such as Wigan, Tameside and Knowsley.

CLES – which is working with local authorities around the country to develop Preston-style community wealth building projects – says decades of outsourcing and privatisation, and the austerity measures of the last decade, have left local authorities “strongly reliant upon large providers who extract wealth from the care system, wealth that could otherwise be used to provide additional benefits for citizens and the state”.

The report – A Progressive Approach to Adult Social Care – was commissioned by the North West Association of Directors of Adult Social Services. It says councils commissioning care should take an “activist approach” to ensure that care systems offer genuine choice and control to service users, and produce wealth which stays in the local economy.

It recommends a blend of in-house delivery with services delivered by the council itself; care businesses that are mutually, worker or community owned; and local private ownership that supports a triple bottom line – concern for the wider community, the environment and workers, alongside the pursuit of profit.

This balance is to ensure there is no further “outsourcing of already debilitated public services to impoverished communities on the basis of cost … Outsourcing to the community should not be a decision that is solely guided by cost and the notion that CICs and the like constitute the cheaper option”.

It adds: “In essence, the intention should be to reshape adult social care markets, so that services are run in conjunction with a plurality of providers who augment existing core services and help to minimise the extraction of wealth and maximise the delivery of social value.”

 Getting this balance right is crucial to solving problems in the sector, the report argues. It highlights difficulties in the north west of England, where 69% of local authorities have seen a provider fail in the last six months – while the recruiting and retaining of younger workers is problematic. The total cost of care in the region is forecast to increase from £1.9bn to £2.8bn by 2022-2023.

Example of successful change include Wigan, says the report, with the council creating a new market based around the establishment of 100 community interest companies (CICs).

“Before 2014, day services in Wigan were delivered primarily via its 14 council-owned day centres. However, the council felt these centres were outdated and were failing to provide customers with the kind of care and flexibility they wanted. The decision was therefore made to close 10 of the 14 day centres.”

Instead – to make the adult social care offer more resilient – the council tried to stimulate the market by encouraging the development of CICs to provide services.

“The council used its market development team to provide support to day centre staff facing redundancy, enabling them to make the transition into setting up a series of individual CICs. 

“This included linking them to the council’s business support offer and helping them to access support from the Community Investment Fund, which is designed to support community-based social enterprise and charity work across England. 

“The council were also flexible in how staff could use their redundancy payments to support the development of their new enterprises and in some instances provided loans to assist with cash flow in the transition to becoming a CIC. 

“A managed process was used to shut down the centres and they were only closed when the new market was deemed to be ready and could transition into service provision by the newly formed CICs.”

Meanwhile, Tameside abandoned a system where workers were paid according to 15-minute blocks of care in favour of a “people centred” model. The report says this resulted in improved outcomes and pay.

CLES says councils can go beyond ideas like this to develop a community wealth building approach which “aims to reorganise and control the local economy so that wealth is not extracted but is instead broadly held and generative, rooted locally, so that income is recirculated, communities are put first and people are provided with opportunity, dignity and wellbeing”.

The report adds: “By ‘generative’, we are referring to businesses with plural forms of ownership such as mutuals, co-operatives, and social enterprises.

“These ownership models enable public spending to be retained within the local economy. Increased local spend creates jobs, contributing to a multiplier effect which in turn creates additional jobs via increased demand for local goods and services. The more money spent in a local area, the higher the multiplier effect.”

CLES worked closely with the local authority in Knowsley to come up with recommendations as to how this community wealth model might be achieved. With £100m of budget cuts since 2010, the authority has been hit hard by austerity – but the report says it is still looking to follow a community wealth model of care. 

There are important tools a council can use to drive this work, adds the report: these include the benchmarking and targeting of spend to ensure generative outcomes and a greater use of direct payments instead of channelling money through large outsourcers. And in-house resources should be focused on the most complex needs; those with less complex needs who have asked for care to be delivered in a different way might benefit instead from “specialised support from within the community”.

The report warns against reviving David Cameron’s Big Society by “devolving the remnants of a broken social safety net – dressed up in the language of community empowerment” and instead recommends genuine community-based alternatives. It says Knowsley has a micro fund offering grants of up to £500 to support the development of new ideas and get small organisations off the ground.

Communities and service users should be involved in the co-production of care, it adds. 

“Putting communities and people first and providing them with opportunity, dignity and wellbeing means they should be involved in planning and designing services from the outset. 

“As such, professionals and citizens should share power to design, plan, assess and deliver services together.”

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