Staff-led youth services gather pace

This has led some to explore the creation of staff-led mutuals. But as the idea grows in popularity, interested parties are being warned to beware of the pitfalls.

In total, the Cabinet Office has announced 22 mutual pathfinder projects since August 2010, with the hope that they will help provide blueprints for the future and pave the way for scores more across the country.

Seven of the first 22 pilots are exploring the delivery of all, or an aspect of, children’s services. These include plans to make Westminster’s children’s services an arms-length mutual, creating a youth services mutual in Havering and a mutual for delivering early intervention services in children’s centres in Newham.

Popular concept

Among the most advanced are plans for a youth services mutual in Kensington & Chelsea, scheduled to launch in April, subject to final approval from elected politicians in the borough.

Brendan O’Keefe, head of integrated youth services at Kensington & Chelsea, says several local authorities have been in touch to express interest in the council’s model. "I have had at least 12 local heads of service get in touch saying they would love to do it, but are holding back to see whether we can pull it off," he says.

Another fast-emerging trend is the participation from young people in creating organisations.

FPM Training is working with more than 15 clients on setting up either employee or membership mutual organisations, including Lambeth Council, where it has been in the process of working on a youth services mutual since the summer. "We have found there has been a great deal of energy as a result of getting young people involved," Chris Owen, head of business development at FPM says.

But although the idea is proving popular, a number of challenges are emerging. A Cabinet Office progress report published in early December sounded a warning to those considering the concept, calling for them to investigate the potential benefits and practicalities thoroughly before dedicating resources to pursuing it.

"In a changing policy landscape, unless a clear market for a service can be identified, spinning out [creating a mutual] may not be appropriate," the report states.

It also reveals that while some pathfinders are progressing well, four have in fact fallen by the wayside. Among these were plans to create a mutual to deliver a "families at risk service" in Cambridgeshire – an early intervention service aiming to meet complex family and parenting needs through behavioural, therapeutic, emotional and family support.
"Project leads were not able to develop the project as hoped and are exploring other business opportunities," the report states.

The Cabinet Office said uncertainty over future service need and the impact of restructuring on the funding and delivery of services were reasons for projects being jettisoned.

O’Keefe says it is paramount that a local authority is committed to the service area for it to achieve any success. While he says this is the case in Kensington & Chelsea, it has not prevented cuts that have seen the overall youth budget drop from £5.7m in 2010/11 to a predicted £4.5m for 2012/13.

But the hope is that this can be turned around. "This model will allow us to pull in funds from other, different, sources," O’Keefe says. This will involve contracting with local authorities – through the traditional commissioner and provider model, as well as joint ventures and delivery partnerships with like-minded partner organisations such as charities.

The mutual will also engage in the social finance field with organisations that want to invest in the social sector.

Funding alternatives

Payment-by-results is a further model for funding services, with measures such as reducing youth crime and antisocial behaviour, and reductions in the numbers of young people not in education, employ­ment or training forming the basis.

Further funding is also possible in the form of grants and "soft loans" – loans below market rate, usually provided to organisations by the government.

O’Keefe is speaking to agencies and government departments about the prospective savings that can be made in each of their respective areas as a result of work by the youth service.

"We are speaking to anyone we can save money for in the future," he says. "Our ambition is to grow and to continue to offer a top-class service to young people – we are not just looking for a lifeboat."

This approach, combined with addressing the issue of pensions and terms and conditions early in the process, has helped to convince members of staff to get on board with the idea – in the case of Kensington & Chelsea, between 160 and 170 staff will transfer to the mutual.

The concept has received the tacit support of union Unite, although concerns around whether mutuals will become sustainable remain.
Doug Nicholls, national officer for Unite, says: "If it is the only alternative to closure of services, we are not going to stand in the way. The question is whether they will last, as they will still depend on funding from local authorities."