Revenue generation – an alternative to cost cuts

Published on in News section

Digital transformation is championed as THE solution to problems in the public sector, with “data” the panacea to its ills.

Don’t get me wrong… as the founder of an assistive technology company, I am totally committed to the belief that automation and insight have a crucial role to play in improving the services delivered by the public sector. When done correctly, it will allow wider access to better services that can be delivered for less. However, whilst most authorities are still grappling with how best to harness “data” and “digital” to create efficiencies, few have given much consideration to how to use it to create additional revenue. Even though they may already have spun off an LATC (Local Authority Trading Company) or two, which would act as an ideal vehicle through which to channel new revenues.

There are many opportunities for local authorities to generate income with little – if any – significant channel shift or service changes. Take our area of practice, social care: 30% efficiencies need to be created to plug the growing care funding gap and cater to the rapidly increasing demand – more people are simply living longer. 30% would be ambitious even if disruptive technologies (IoT, smart devices and wearables) or cutting-edge data science (artificial intelligence, machine learning and behavioural data analytics) were implemented across the board. Even more so, when you take into consideration the profit margins required to make such solutions sustainable.

Some specific ideas, then:

Many local authorities already run their own careline monitoring centres and responder services. These almost exclusively respond to activations of the (rather dated) pull cord and pendant alarm systems supplied by most councils’ community alarms or telecare teams. These 24/7 services are expensive to run. On the whole, they would benefit from scale but many are underutilised. Why not use these as hubs to supply emergency response to self-funders, with growing numbers of people finding their own care solutions, many of which demand a failsafe backstop in case of a real emergency? The workers in these call centres are often highly skilled and well trained. They are the domain specialists that are crucial to close the loop for high impact data science. Why not put the mathematicians in these centres with the domain experts to crunch the in-home and open data sets which councils hold, look for patterns across the geography, and build the algorithms that will manage demand at the front door and inform preventative interventions that could keep people in their own homes for longer.

I’ve also seen a number of consumer “domiciliary care on-demand” start-ups lately, raising significant venture capital funding – ordering carers by the hour, exactly as you would a cleaner or a handyman, a familiar model in most of the UK’s big cities.

These on-demand models face major challenges:

  • A shortage of suppliers who can afford the lack of job security (particularly when we are talking sub- or close to sub-minimum wage work);
  • The complexity of vetting suppliers to ensure quality of service delivery;
  • Suppliers making relationships with the customers and “cutting out the middleman” (in most instances a mobile application);
  • The preference, particularly for something as sensitive as personal care, to have the same supplier on every visit.

Local authorities are incredibly well suited to take advantage of these market opportunities – their adult social care teams and trusted assessors are well versed in assessing and prescribing care packages. They already have contractual relationships with providers who have vetted and trained their staff to an agreed standard; they receive large numbers of enquiries every day from potential customers – people who fail to qualify for state assistance so will need to pay for care directly. Finally, they are already an established brand in the community, so why would you want to switch? A public / private fusion funded model also has the potential to raise the standards of care delivered across the board – as profits from selling care to self-funders can be used to better train workers, or increase pay to a living wage.

These self-funders expect to fulfil their purchases using mobile digital tools – so this is where you would also expect local government to need to partner with technology providers in order to create a high quality customer journey from purchase to delivery of service: a consumer-flavoured experience irrespective of buying route. E-marketplaces are an opportunity for personal budget holders and self-funders to access services. However, rather than a shop in which to promote the products and services supplied by others, local authorities should look at how they can generate income by selling their own services to those who are normally unable to access them.

The challenges faced by the public sector, including budget cuts, clearly need addressing as soon as possible. Exciting work is already taking place around the country to digitise and optimise social care services, to increase personalisation and choice offered to the end user. From IBM’s recent announcement that it is working with Harrow Council to introduce its Watson Care Manager system to the UK. To Agilisys’ more established work with recent acquisition QuickHeart on assessments, resource allocation and digital marketplaces. While these may help realise costs savings, the significant opportunities created by technology to increase the top line must not be overlooked. As the hub of the community, each local authority has the potential to be a key provider of paid-for, on-demand services to self-funders, and become the cornerstone of exciting open data projects that help us move towards preventative models of health and social care. Not only saving money but generating it, and improving lives too. What’s not to like?