Research challenges ‘economies of scale’ mantra
PRESS RELEASE - Friday 19 October 2012
New research by the Third Sector Research Centre challenges some of the assumptions driving the push for partnership working and scaling up of third sector organisations.
The report, released today, finds that both service commissioning and partnerships have been driven by a fixation with economies of scale. But this has limited purchase in the delivery of public services, where personal relationships are often more important than systems in delivering outcomes for users.
The research studied partnerships with and between third sector organisations to deliver public services. It is based on five in-depth case studies and insights from TSRC’s ‘real times’ longitudinal panel. Case studies included supply chains in the employment field, mergers and alliances in housing and sight loss charities, connected care partnerships for social care, and housing and support partnerships in Northern Ireland.
The report found benefits of partnerships were sometimes limited and hard to generalise. As such, the pros and cons of partnership should be weighed up on a case by case basis, rather than by all-encompassing notions of ‘efficiency’, ‘joined up services’ and ‘economies of scale’.
The report identifies a missing concept – ‘economies of scope’ - referring to an increase in the range rather than volume of activities. These relationship-oriented activities (customer empathy, team working, partnership-building) are often undervalued by commissioning frameworks.
The research recommends that service users are given priority in setting and assessing outcomes. It found that service user voices were often silent in current partnerships.
The report also notes that mandated partnerships and enforced competition are far less successful than voluntary partnerships. This is because successful partnerships come out of trust based relationships, and these are hard to impose from the outside.
The report recommends that government avoids pushing prescriptive arrangements, gives weight to economies of scope as well as scale, and does not focus on outcomes for the public purse at the expense of outcomes designed for and influenced by service users.
James Rees, who conducted the research with David Mullins and Tony Bovaird, said ‘there is widespread recognition in public and third sector organisations that we all need to get smarter about the way we do things. But there remains significant uncertainty about the type of partnership arrangement that is likely to be successful. The private sector may be better at doing some types of partnerships because of the single bottom line, but public services deliver multiple bottom lines. Trust, user engagement, co-production and relationship approaches are needed to deliver value in these spheres.’
Tony Bovaird added that “the future is likely to be messy – there are no tidy solutions to inter-organisational working - but these ‘messy solutions’ may turn out to be innovative and productive.”
More about the research by James Rees, David Mullins and Tony Bovaird
See full research report (pdf, 976KB)
The report is launched on October 19, with a presentation by David Mullins at the Conference of the Isles at Hilton Hotel in Belfast – an all Ireland conference on ‘Transitions and Transformations in Housing’ with an expected audience of 200. This presentation draws on the Northern Ireland case study, undertaken with Nick Acheson (University of Ulster) and Jenny Muir (Queens University).
The research report will be published here on the TSRC website. It builds on an evidence review published in January this year, and on five case studies some of which are also available here.
For more information contact:
Naomi Landau, Knowledge Exchange Team
020 7520 2421