Alternative Models of Service Delivery

Local government is currently facing huge challenges with significant cuts in funding which are likely to continue for the foreseeable future together with increased demand for services as a result of demographic changes. These along with other government policy changes are leading to a fundamental change in the methods of commissioning and the delivery of local government services.

A range of alternative service delivery models now sit alongside the core approaches of efficiency, systems remodelling and changes to service delivery.

New ways of working

Identifying and delivering savings and avoiding cutting services tends to get the lion’s share of attention but the flip side of the sector’s response to government funding reductions and demand pressures on service provision is innovation.

The services range from the expected internal, back office and management support functions – such as IT, payroll and human resources – to more front line services, such as benefits administration, housing repairs and sports and leisure management.

The Task and Finish Group was established at the request of the then Minister of Local Government, Lesley Griffiths, to review and report on a new approach to achieving sustainable local services in Wales. This report sets out an approach to addressing the immense financial and service pressures facing the public sector in Wales (February 2015).


Alternative Models of Service Delivery case studies


Model of delivery Essential Characteristics

Asset Transfer

Asset transfer involves the transfer of the ownership of land or buildings from organisations such as local authorities to community groups, for example local sports clubs, trusts, arts facilities, libraries, theatres and buildings of historical interest.

Commissioning services externally Where local authorities engage external third parties to provide the service.
Co-operative councils Co-operation between authorities, communities and service users/providers that enables everyone to become active participants in the service rather than passive recipients.
Co-production A way of designing and delivering services in an equal and reciprocal relationship between staff, people who use services, and their families, friends and neighbours.

Demand Management

Demand management is a planning methodology used to manage and forecast the demand of products and services.
Direct delivery by local authority, including In-sourcing Where services that have been outsourced are returned to direct provision (to join up services or be more responsive).
Internal transformation The redesign of services or activities currently provided in-house.
Joint Venture This involves the creation of a new company, potentially in the form of a Joint Venture company with a private sector partner, sourced through an OJEU competitive procurement process.  The local authority holds a share in the new company and may have senior officer/councillor representation on the board.
Lead Authority Model This could feature a solely public sector organisation led by the parent local authority or the establishment of a best of breed solution with private sector involvement.  The lead authority would establish the vehicle and carry out services on behalf of other public (and potentially private) organisations and would grow its market share through the provision of a particular range of services.
Local Authority Trading Company

Local Authority Trading Company (LATC) A local authority is able to establish an LATC through powers in section 95 of the Local Government Act 2003. A local authority is permitted to trade in anything that it is authorised to do under its ordinary functions. LATCs generate a vehicle into which large portions of the Local Authorities business can be moved. They can be set up without a tender process but thereafter, can tender for additional work in other councils.

Mutuals and co-operatives The service is provided by organisations that are owned and controlled by their members, who may be employees, organisations or consumers.
Outsourcing Subcontracting processes, services and/or whole operations to a third party organisation while retaining overall ownership and ultimate responsibility.
Partnership Where local authorities work with other public, private and voluntary/community sector organisations or a mix of them to provide a service.
Private companies The service is provided by a sole trader, company or franchise where the business successfully tenders for a contract.
Shared services These have existed as a change option for local government for a number of years.  This constitutes the merging of services between organisations and can be geared to deliver efficiency savings thorough reductions to overheads and/or performance improvements.
Social enterprise Businesses with social or environmental objectives develop the service, where any profits are usually reinvested in the service.
Strategic Partnership A formal arrangement between a public body and private sector organisation (or consortium) designed to plan and deliver specific long-term transformation objectives and provide services.