Strategic Public Social Partnership model: report

2. Co-productionin public services: definitions and models

The ways in which public services are designed, regulated and financed has been the focus of academic attention for decades (Castles et al., 2010; Esping-Andersen, 2002; Ferrera, 2010; Pierson, 2006). It is only more recently that the state, private sector, families and communities, and the Third Sector are recognised as part of a "mixed economy of welfare" (Powell, 2007, pp.2). This is partly because of the emergence of more pluralist models of governance and provision of welfare services. Such models are most often based on public–private networks, where citizens and Third Sector organisations play a role as 'co-producers' of public services (Pestoff, 2012) with the involvement of citizens and Third Sector organisations in rethinking public services from planning through to delivery (Brandsen and Pestoff, 2006; Osborne, 2006; Voorberg et al., 2015). Such processes inevitably involve a rebalancing of responsibilities and power dynamics between the state, Third Sector and communities (Alcock, 2012).

Co-production is a broad and contested concept that can assume different meanings and definitions in different political, cultural and institutional contexts (Brandsen and Pestoff, 2006a; Cahn, 2000; Parks et al., 1980; Ewert and Evers, 2012; Pestoff et al., 2006; Verschuere et al., 2012). Some scholars have focused mainly on the role of citizens and Third Sector organisations and their relationships with the state in delivering public sector services (Bovaird, 2007; Pestoff et al., 2006), while other researchers have included aspects of service commissioning, design, delivery and evaluation into its definition (Boyle and Harris, 2008; Löffler, 2009; Needham and Carr, 2012). In the first conceptualisation, co-production is separated from co-governance and co-management to explore how the different actors play a role in producing goods and services within the mixed economy of welfare (Brandsen and Pestoff, 2006), in the latter it acts as an umbrella term that covers the entire process of citizen and Third Sector involvement (Bovaird, 2007).

Based on these different definitions, four different models of collaboration (Co-Governance, Co-Management, Partial Co-Production, Full Co-Production) can be outlined from the literature and these are presented in Table 2.

Table 2 – Models of collaboration (Modified from Bovaird, 2007; Pestoff, 2012)

		Responsibility for designing public services
		Public Sector	Public Sector and Citizens/Third Sector Organisations	Citizens or Third Sector Organisations
Responsibility for delivery of public services	Public Sector	1. Traditional Public Administration Planning and Delivery	2. Co-Governance (role of citizens and/or Third Sector only in planning)	3. Partial Co-Production (role of citizens and/or Third Sector only in planning without collaboration of the public sector)
	Public Sector and Citizens or Third Sector Organisations	4. Co-Management (role of citizens and/or Third Sector only in delivery of services in collaboration with public sector)	5. Full Co-Production (role of all the actors in planning and delivery of services)	6. Partial Co-Production (role of citizens and/or Third Sector in planning and in delivering in collaboration with public sector)
	Citizens or Third Sector Organisations	7. Co-Management (role of citizens and/or Third Sector only in delivery)	8. Co-Governance (role of citizens and Third Sector in planning and delivery)	9. Partial Co-Production (role of citizens and/or Third Sector in planning and delivering without the public sector)

This section of the report presents the findings of the scoping literature review (see Appendix 1 for the full description of the methodology). The Strategic PSP model can be considered as an example of co-production which should be understood as part of a wider international movement, rooted in the idea of citizen participation in the design and delivery of goods or services (Parks et al., 1981), thus not a solely Scottish attempt to promote collaborative practices.

A greater involvement of Third Sector organisations and citizens has been promoted both in the UK and in other countries to face societal challenges and budget constraints. This involvement has been developed in different ways, reflecting different political, cultural and institutional contexts. Traditionally, European countries have developed a variety of approaches to involving citizens/users/the Third Sector in public services, ranging from simple interactions in the delivery process, to more active and substantive consultation in decision-making.

The alternative models of PSPs found internationally and presented in this report are rooted in the contexts from which they emerged and developed. Overall, the examples reported in this report cover almost the entire range of partnership processes presented in Table 2. For instance:

• from co-management to co-production models (Italy);
• co-governance (Netherlands);
• from traditional public service delivery to partial co-production models (Finland, Sweden and Denmark);
• alternative models to reshape services ( UK).

The socio-economic and cultural contexts that exist within different regions of the world (Doherty et al. 2009) and distinct welfare regimes ultimately influence the various experimentations. Even within each of the national contexts, significant variations can be found. In the following sections we discuss a number of identified alternative models of co-production (see Appendix 2 for a full description of the models reviewed).

2.1 From a co-management model to a full co-production model: Italian models

In 1991, an Italian law established the involvement of social cooperatives (Italian social enterprises) as the main and preferred partner in delivery of public services (particularly health and social care) (Calo and Teasdale, 2016). In 2000, direct procurement without a tendering process was permitted for contracts lower than the limit established by European Union directives (209,000 euro). This legislation had encouraged the promotion of social cooperatives as the main deliverer of public services and the increasing number of social cooperatives (Venturi and Zandonai, 2014). It also enforced the development of Area Plans (Piani di Zona) in which local councils must work together with Third Sector organisations to design and promote social policies. This Area Plan is still a vehicle to program and identify local social priorities, strategic objectives and instigate operational plans aimed at integrating and delivering effective social and health care services. The construction of the Plan involves a collaborative process among public sector officials (mainly at the local level), the Third Sector and citizens.

A result of these policies has been a more structured relationship between the public and Third Sectors and the promotion of full co-production models (as seen in model 5 of Table 2) such as those developed in Brescia (for example Brescia Cittá del Noi) or Milan (Bollate Prison) which represent a new way of redesigning (in the former) or developing welfare services in the latter example.

Lessons emerging from the Italian cases

A number of key messages appear to emerge from these cases. Firstly, in Italy, specific legislation has promoted the role of the Third Sector - and social enterprises specifically - as favoured actors in the delivery of public services. Direct procurement has been established in specific cases and co-production processes have been enforced at a local level. In turn, this has encouraged the involvement of Third Sector organisations in the planning and delivery of public services (Venturi and Zandonai, 2014) and, in some cases, the recognition of the need to train officers in order to instill new practices and ways of working that might bring more long-lasting outcomes. However, as in the case of Bollate Prison, the legislation alone was insufficient to replicate the model or the experiences in different contexts.

Secondly, sustainability remains an issue. In Brescia Cittá del Noi, a working group was set up from the outset to investigate options. Given the challenges related to changes in service delivery, exploring how to redirect budgets where money is needed the most should be at the core of experimentation. Early structures and mechanisms, such as a sustainability plan, to explore how this challenge can be overcome, has been created.

2.2 Models of co-governance in the Netherlands

In the last few years, central government in the Netherlands has devolved responsibilities to local authorities for youth care, welfare work, and social assistance. In the meantime, local government felt it was necessary to adopt an increasingly participatory approach to policy and programme development, becoming more receptive to collaborating with private actors ( OECD, 2017). One of these examples of collaborative working is to be found in Utrecht, where public authorities, Third Sector organisations and communities have begun to work together to respond to the Healthy Urban Living agenda. This example – called the Social Impact Factory represents a case of co-governance (model 8 in Table 2). Welkom in Utrecht is a second example of a co-governance case, where citizens and the public sector work together towards implementing services to address the needs of asylum seekers and migrants.

Lessons emerging from the Dutch cases

In a context where Third Sector and private companies have rarely been involved in service design/delivery, these examples of co-governance have created a space for different actors to test ideas. However, the rigidity of tendering processes limits the opportunities for Third Sector organisations to be involved. Exploring such issues is key to understanding how best to mainstream the activities of Third Sector organisations into the delivery of public services.

2.3 From traditional public service delivery to partial co-production models – Finland, Sweden and Denmark

Although northern European countries have been indicated as promoting a strong role for the state in providing services, they are currently facing major challenges in maintaining and developing public services ( OECD, 2017). The idea of enhancing the role of citizens in providing welfare services has seldom gained attention from scholars and politicians in the last decade as a way of planning and delivering welfare services (Pestoff et al., 2006). However, there are relatively few examples of partnerships supporting the involvement of the Third Sector in providing services in collaboration with the public sector (Ibid, 2014).

This trend had been exemplified by the introduction of specific tendering processes, such as those developed in 2007 in Finland ( SEEN, 2000), whereby social clauses were included in the procurement process, weighting the inclusion of disabled and long-term unemployed people among the criteria used for the tendering, in order to support and promote the engagement of Third Sector in the provision of services. Partnerships are a long-established practice of Finnish rural development work and several policy programmes promote the emergence of social partnerships.

Lessons emerging from the Finnish, Swedish and Danish cases

Most of the cases presented discuss services that are additional to mainstream provision and whilst they involve varying degrees of success, they are perceived as supplementary to public provision which is generally perceived to be working well already. Overall, the alignment of mission, vision and interests at organisational, partnership and strategic levels appear to be critical factors in supporting the development of effective partnership working, and the possibility of replicating projects in different contexts.

2.4 Alternative models for reshaping services through co-production – the UK

In the UK the commitment, across different governments, to increase the role of Third Sector organisations and social enterprises in service delivery is increasing. In general, this involves treating them as a substitute to, or replacement for, existing (public) providers in a competitive market (Alcock, 2016; Sepulveda, 2015). The move towards co-production (in Westminster at least) has been seen by some critics as a cynical re-label of existing welfare models in the face of massive planned cuts to public expenditure (Nicholls and Teasdale, 2016). However, most commentators recognise that co-production does also offer a transformative model for the future (Needham and Carr, 2012). There are numerous examples of initiatives that resemble PSPs, or at least have principles that resemble the underlying notion of co-production elsewhere in the UK, but particularly in England in the fields of health and social care. They include different forms of social investment, where a variety of partners join forces with Third Sector organisations in order to tackle social issues. For example, Social Impact Bonds are a form of Payment By Results initiative, whereby investors fund some or all of the upfront or operating costs of an initiative or intervention. If the intervention succeeds in delivering agreed improvements in outcomes for service users, investors are repaid their investment plus a return on that investment by central or local government departments. If agreed outcomes are not achieved, investors do not receive a return, and lose some or all of their investment. Since their introduction, Social Impact Bonds have been central to numerous academic debates concerning their validity and legitimacy as an alternative way to sustaining service provision (see for example Sinclair et al., 2014).

Other examples include Safe Families for Children ^[3] and the Partnership for Older People, where the idea of collaborative process has been identified as an alternative model to finance public services. Safe Families for Children and the various Social Impact Bond initiatives most closely represent cases of co-governance (model 8 in Table 2) while Partnership for Older People represents a case of full co-production (model 5 in Table 2).

Other examples include BounceBack and Connected Care, where the co-production approach has been explored as a vehicle to promote a stronger relationship between the public and Third Sectors, involving the Third Sector as a voice of the community. BounceBack and Connected Care most closely resemble cases of partial co-production (model 6 and model 9 in Table 2). Finally, Recovery College has used the co-production approach to develop additional services to health care and it represents a case of full co-production (model 5 in Table 2).

Aside from participatory budgeting ^[4] , various collaborative commissioning approaches have also been developed elsewhere in the UK, promoting different procurement processes to include Third Sector organisations and service users in designing and delivering services. A Development Partnership is formed when a range of partners from different sectors (public sector, Third Sector and private mainstream for profit business) come together to tackle problems through a long term, shared and strategic approach to identifying, testing, resourcing and rolling out new services. The process is similar to the one promoted in Public Sector Partnerships. However, it includes also the private sector in the design and delivery of the service.

Partnership Purchasing (or Joint Commissioning) is a vehicle that allows two or more public bodies to collaborate to purchase services for individuals as an integrated package. Each public sector organisation contributes resources in return for the outcomes it wants to buy on behalf of the individual. It can also be used to pool budgets among different sectors and departments. This model has been implemented in Health and Social Care, as a way to develop partnerships. The joint work can also develop a Multiple Outcomes Commissioning process, which is when a public body achieves more than one of its desired outcomes from one commissioning process, by joining up purchasing decisions across departments. It is a vehicle to pool different budgets and integrate services achieving outcomes in different sectors. This model has been, for example, implemented in a capitated outcomes-based contract in Milton Keynes ^[5] .

Alliance Contracting is a form of outcome based contract, in which no new legal form is created but the partners are equal in taking collective decisions. It is a commissioner led agreement and the commissioner shares the risk with the partners. It has been, for example, implemented by NHS Lambeth Clinical Commissioning Group in collaboration with Lambeth Council ^[6] .

Finally, the development of Joint Ventures is another way to share strengths, minimise risks in the commissioning process. For example, the Accessible Transport Group or Greater Manchester Accessible Transport ^[7] addresses specific needs or they can represent consortia agreements among different organisations.

Lessons emerging from cases from the rest of the UK

There are three main themes emerging from the case studies from the rest of the UK: the importance of sustainability; mechanisms to support partnership working; and the importance of process evaluation. Firstly, the issue of sustainability emerges whether in relation to funding pilots or in terms of mainstreaming new or redesigned services. For what concerns the former, three different approaches have been used reflecting different 'locations' of the risk: whether on the public sector at a local level (Recovery College and Connected Care), at a national level (Partnerships for Older People Projects ( POPP) and BounceBack) or on an external investor ( HMP Peterborough Social Investment Bond, Social Bridging Finance Model and Social Investment Partnership). The latter however appears to be more problematic, with no evidence as to workable examples. Indeed none of the cases reported here have been funded after the pilot phase. It is recognised that long-term sustainability and commissioning of the re-designed or new services should be discussed at the outset. This is particularly relevant when it concerns pooling budgets among different agencies and organisations, as highlighted in the POPP evaluation report.

Secondly and inevitably, partnership working presents several challenges, particularly in terms of resources and time intensity but also in terms of conciliating the agenda, remits and structure of the partners involved. At a practical level, training provision appears to be important in order to support those involved in understanding commitment and procedures. The main mechanisms identified to address these issues are to align vision and objectives from the outset, to develop management and structural plans in order to increase collaboration. Also, more practically, sharing the same office and stimulating communication activities are some of the processes to be promoted to increase collaboration, but also trust among partners. Finally, evaluation of partnership working and processes are highlighted as important to understand what works beyond outcome measurement. Difficulties in using traditional evaluation approaches have been identified in different case studies, thus it is important to explore methodological approaches to unpack complex interventions and provide suggestions as to replication in different contexts.

2.5 Key messages emerging from the literature and case studies

A number of key messages emerge from the literature and case study reviews. Firstly, the evidence gathered suggests there is an issue relating to rendering the relation between public and Third Sector organisations to be more compatible to collaboration. This may refer, for example, to the development of clear strategic objectives, the transformation of structures and procedures to ensure that they are fit (or a better fit) for purpose, and the presence of an effective infrastructure to communicate with each other (Andrews and Brewer, 2013; OECD, 2011). Co-production requires changes in the commissioning process and in apportioning/pooling budgets, therefore the financial frameworks underpinning each organisation involved should accommodate collaborative attempts rather than penalise them. For example, the transformation of the Italian commissioning process enabled social cooperatives to be identified as the main and preferred service providers ^[8] . This, in turn, facilitated collaboration and consortium development among social cooperatives to address identified needs – through service provision. In the examples from the rest of the UK of collaborative commissioning approaches and participatory budgeting, mechanisms have also been developed to include Third Sector organisations and service users in designing and delivering services.

Secondly, and linked to the point above, a compatible environment has to exist to ensure top-level commitment and leadership. These factors, and the capacity to engage with partners were all identified in a survey conducted among countries as the commonly-cited factors for success in collaboration ( OECD, 2011). This is also reflected in some of the cases reported. Cycling without Age and Brescia Cittá del Noi are clear examples of the importance of top-level commitment for encouraging the establishment of a collaboration process. A strong attitude towards collaboration was also important in Bollate Prison, Safe Families for Children, HMP Peterborough, and Sports Village. Being committed to co-production means also considering the time and resources necessary to make the project work, developing trusting relationships and sharing learning (Wise et al., 2012). Ensuring that specific training is provided to all of those involved appears a feasible solution to enable processes of collaborative working.

Thirdly, there is a clear indication that a sustainability strategy should be identified right at the start of the process, with a view to ring-fencing funding from the outset. There are currently a variety of models identified to fund pilots, however long-term sustainability still represents a major challenge. In some cases, vehicles such as Partnership Purchasing may promote more collaborative ways to co-fund services. However these are seldom used in commissioning.

Fourthly, evaluating mechanisms and processes should be promoted alongside outcome measurements. The lack of an empirically orientated understanding of what happens in terms of outcomes when citizens and/or the Third Sector are involved in public service provision (Brandsen and Pestoff, 2006; Cunningham and James, 2011) can affect the willingness of participants to engage in this process (Fuglsang, 2008). The inappropriateness of some approaches has been explored both in academic literature but also in the models reviewed such as Safe Families for Children, Bounce Back and Social Impact Bonds (Durose et al., 2017). There are alternative rigorous methodologies that, if employed, could be helpful to evidence the contribution of co-production (Durose et al., 2017). Realist evaluation is one of these approaches. This method emphasises the role of context and allows a variety of perspectives in shaping the outcomes of a programme, helping to assess not only what works, but also for whom and in what circumstances (Blackwood et al., 2010; Pawson, 2006; Pawson and Manzano-Santaella, 2012; Pawson and Tilley, 1997).

Finally, and overall, the review of the literature indicates that the variety of models and their diverse application in different contexts also requires attention when dealing with co-production. It is evident that different models have been conceptualised with different aims and rationale. Some of the models have been promoted as a vehicle to reshape services to provide a more effective alternative to the status quo. Other models were promoted as alternative financial mechanisms to fund new or change existing services, while others have promoted co-production as a mechanism to include service users in designing services or as a model to strengthen the relationship between the public sector and Third Sector. This different understanding of the meaning of co-production in public services has created a fragmentation of models that risk affecting the achievement of long-term outcomes.

Co-production in public services: definitions and models – Summary of key points:

Co-production is a broad and contested concept that can assume different meanings and definitions in different political, cultural and institutional contexts.

A diversity of co-production models has given form to numerous experiments across Europe and further afield. A common set of issues emerging from the review of a number of international examples of alternative PSP models indicates that:

- There seems to be common issues relating to ensuring that relations between public and Third Sector organisations are compatiblewith collaboration.

- Top-level commitment and leadership are needed to develop a more compatible environment.

- There is a clear indication that a sustainability strategy should be identified right at the start of the process, with a view to ring-fencing funding from the outset. There are currently a variety of models identified to fund pilots, however long-term sustainability still represents a major challenge.