The G-Cloud Demands New Business Models

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If public sector IT moves to the cloud, we need new mutualised ways to deliver services, says Alan Mac Neela, of Dell

The G-Cloud, the government’s programme to adopt cloud based services, is beginning to finally take shape.

During October 2011, the Government Procurement Service placed a tender for G-Cloud services with the aim of creating a government marketplace of cloud services. The broad response was welcomed by the government and as a result of the sheer level of interest, the tender deadline was extended several times, stretching the submission process to the end of 2011.

This year is about action, the government says, with the framework agreement on track to be published next month, 2012 sees the G-cloud coming to fruition.

How mutualisation fits the Cloud

Mutualisation is an interesting yet ambiguous theme surfacing from the project. When a service is spun out from the public sector but continues to deliver public services it becomes a “mutual”. This typically happens when there is a case that a service can be run more effectively or efficiently, achieving better outcomes for users, or where there is a gap in service provision.

The government employs the “third sector” (charities and voluntary workers) in a wide range of public sector services provision and, in particular, community and citizen-centric services such as health and social care, community transport, café, and leisure facility management.

For instance, in April 2011, North East Lincolnshire mental health services became a not-for-profit social enterprise called Navigo. Additionally, in January, 2011, Anglian Community Enterprise (previously part of NHS North East Essex) was launched as a community interest company providing community health services.

While ICT and other government back office services have not typically been seen in this way, the move to new delivery models across government and G-Cloud has raised the potential to change things. The UK government is home to a feast of ICT innovation and creativity, in areas such as mobile applications, social media and public data. Through mutualisation the potential of these could be harnessed more prevalently.

Mutualisation and other similar delivery models provide the ability to develop a deeper and broader set of capabilities, attract funding and business opportunities, and use the knowledge of experienced public sector staff to develop solutions highly applicable to public sector ICT requirements.

In December, 2011, the Cabinet Office confirmed that it has, in total, a fund of more than £10 million that will enable the most promising and innovative mutuals to spin out of the public sector and deliver public services to a greater area of Britain.

Research into mutualisation reveals the opportunities it can render. The Office for Public Management, working from  case studies of employee and community ownership of public services, has suggested that mutuals could increase productivity and creativity, alongside delivering cost effectiveness and enhanced customer satisfaction.

In addition to this, the government’s first progress report on the mutual pathfinder programme indicated that mutuals have lower absenteeism and staff churn than non-employee-owned organisations, lower production costs, and generally higher productivity. Furthermore, mutuals can deliver greater customer satisfaction while being innovative, profitable and resilient to changes in the economic climate – factors that would be invaluable in today’s financial climate.

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