Most things are shaped to their context. In nature, we call this evolution. In engineering, we call it design. In business, we call it strategy. You are not required to love either earthworms or the online car tax payment system to recognise they both do a great job. Genuinely new things are rare and fail a lot.
Which is why all the ‘clean-sheet’ talk around the model for the National Care Service (NCS), a proposed UK-wide system for adult social care, leaves me perplexed and concerned. The model everyone is searching for is already here. What’s more, it exists for a reason. It is shaped to its context.
Innovation and resilience
Like many great innovations, Local Authority Trading Companies (LATCOs) were born from necessity. Specifically: funding pressures, market fragility and a need for better quality control.
A LATCO is owned by the local authority but is independent of it and able to act more commercially than its owner. Typically, they offer adult social care, waste management, housing and leisure services. Around 80,000 people now work in 850 LATCOs, across 82 local authorities. Since their introduction in 2011, they have matured into sophisticated, mission driven organisations capable of delivering public value at scale.
Many generate significant returns for their local authority owners, such as Commercial Services Group owned by Kent County Council, or Norfolk Council’s Norse. National reviews note that, despite some high‑profile failures, a significant proportion of LATCOs are profitable, especially where there is strong commercial discipline, realistic growth planning and clear shareholder expectations. Plus, they do all that while offering a rare combination of public ethos, commercial agility and democratic accountability.
Rather than designing a hugely expensive new NCS structure from scratch – with all the false assumptions that will inevitably entail – policymakers could instead build on the model which is already providing the solution.
Things fail for a reason
There were early LATCO failures. It is instructive to look at why that was. A LATCO is a business and subject to commercial logic. If the market for it does not exist, or it cannot satisfy demand, then it is doomed. Some LATCOs which appeared innovative on paper – for example, combined back-end office functions – simply failed in business terms. It is also perfectly true that some which may have succeeded were instead pestered to death by their local authority masters.
Both errors are swiftly becoming historic and the painful lessons have now been learned. The LATCOs which remain are honed into a shape the private sector could/will not fill, but with the same commitment to customer service and constant innovation. Which brings me back to the need for solutions to be shaped to problems.
Based in place
My concern with all the Whitehall ‘blue sky/clean sheet’ NCS talk is the end result is always the same: an unaccountable super-quango everyone hates. It has no place. It does not belong anywhere. An NCS which ignores place will fail. Why? Because all care is local. Community identity is real and complex. National systems struggle to honour this complexity.
By contract, LATCOs are embedded in their local systems, connected to health and housing partners and responsive to workforce dynamics. LATCOs can scale impact without losing identity and still share innovation and best practice across geographies.
This is not hypothetical. UK LATCOs are already collaborating, benchmarking and professionalising at pace. The LATCO model has been transformative for the London Borough of Hounslow, allowing it to enhance community outcomes while maintaining a commercial approach through its wholly owned company, Lampton Group.
The future is already here – if we choose to see it
If you ask someone if they would prefer to design something new or build on something which already exists, a large proportion will say ‘create something new’ because to them that seems dynamic and modern. If you then ask those dynamic and modern people which plane they want to fly home in – the one with a 12-year perfect safety record or the one they just designed – I think I know which they would pick.
An NCS will only succeed if it solves the problem it exists to remedy. LATCOs have already proved they can do exactly that. Why? They are shaped to their context. If we are serious about transforming care in this country, we should stop searching for the perfect delivery mechanism and start investing in the one we already have.
What do you think are the main barriers to the creation of a National Care Service? Comment on this column or join the conversation to share your thoughts.
Chris Best is Managing Director at Care Dorset.
Email: [email protected] LinkedIn: @Care-Dorset-UK