By Debbie le Quesne

Could LA trading companies save social care?

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In 2009 Essex Council pioneered a new way of delivering services with the setting up of a local authority trading company (LATC).

Its aim was to deliver services such as equipment and reablement. Soon there followed NorseCare, a care home provider and part of Norse Group, a huge trading company owned by Norfolk County Council employing more than 10,000 staff across the country and offering a wide range of services.

LATCs have been around for at least 20 years in the form of large, stand-alone bodies such as airports. But more recently this remodelling has extended to integral services such as social care and I’m already beginning to twitch as I write this blog…

The methodology has somehow avoided the headlines during my care industry watch, but I note the online magazine Community Care is helping make them now.

And all is not good, despite early signs of success all those years ago the author of this latest article has some misgivings.

A social care manager writing in the mag warns that although trading companies for care may seem a great solution, “the end result can be very different than the vision.”

Quote: “I worked in a local authority trading company for over two years. I should start by saying I’m not against the idea in principle, it seems to be a good solution for local authorities, but how it is undertaken and the end result can be very different from the vision.

“Firstly, we cannot avoid the elephant in the room – no matter how the reasons are dressed up, moving to a trading company is ultimately a cost saving exercise for councils in these days of difficult economic decisions with regards to spending.

“For some local authorities, it’s also a way of bringing in some extra income. As a sole shareholder, they stand to gain from any profit generated. In principle, this is not a bad thing – all local authorities are seeking ways to generate extra income for the benefit of residents.”

Seems reasonable, doesn’t it? Working in home care, the manager admits to work culture inefficiencies before the LACT project . . . “Staff were paid for not working. They had lots of ‘downtime’ at home with no visits to make or worked all their contracted hours over a shorter period, which in effect gave them an extra day off.”

But the real problems began when the bosses who had overseen the old regime suddenly had to lead a complex organisation towards providing high quality, cost effective and efficient services that met local need.

Quote: “It was probably naïve to think that once outside, staff would have the skills and appetite for the real changes that were needed.’

The other issue, it appears was that council managers were mixed in with leaders from the private sector and this seemed to lead to “very different views on how to run a business.”

Can you imagine the boardroom conflict?

The manager, who remains nameless, confesses to issues of preserving employee terms and conditions.

Could it work in social care sector for cash-strapped local authorities? I’m not really sure, though the author does nod at the prospect of it being a “successful way of delivering local services for local people at a fair price.”

Ultimately the advice in the article is “proceed with extreme caution” and it’s my counsel too. Any business project needs the lubrication of money to make things happed smoothly. Both the public and private sector of care seem to be generally lacking in this essential commodity


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