Peppercorn Services

Leveraging Investment in Community Services

for the City of Hawkesbury

Outline

• The tyranny of local geography

• The ‘wicked problem’

• A response to the challenge

• PSI Structure – Model – Outcomes - Benefits

• Lessons Learnt

• The Only Constant is Change

Some context . . . Hawkesbury City Council

Largest LGA in Sydney Metro. Region

North-Western periphery

75% wilderness

A ‘watershed’ - to the south + east urban metro councils; to the west + north rural country councils.

Relative Size

Relative Populations

The ‘Wicked Problem’• Neither rural or urban - competing for community services with larger adjoining urban councils.

• Hawkesbury LGA traditionally served by relatively small and fragmented community-based NGOs

• Large not-for-profit (NFP) organisations located outside of the City unable to maintain viable outreach presence (even where funded to do so) – service models are not sympathetic to local geography

• Changes in government funding arrangements have favoured larger organisations who have attracted the majority of new funding

• The Hawkesbury (as a region) placed at a comparative disadvantage in attracting external investment for locally-based community services

The Challenge• find a more successful way to plan and leverage

investment in community services to deliver better outcomes for residents

• overcome the limitations of a uncompetitive, fragmented + peripheral geography where NGO's may pursue conflicting objectives without reference to each other

The Solution?

Create an integrated mechanism to -

synchronize city-wide service planning,

build district alliances and partnerships, and

increase capacity to successfully tender for new services

Peppercorn Services Inc.• ‘humble’ beginnings – 1999 HCC asked to

assume responsibility for local Community Transport Service (due to financial + operational issues).

• HCC restructured service - in 2001 established PSI to provide community ‘oversight’.

• PSI evolved ‘organically’ - now manages, on Council's behalf, a portfolio of 20 programs across 5 LGAs with 40 staff and total annual expenditures of $3M.

• has captured additional $1.5M in new annual funding which otherwise would have gone elsewhere

Structure PSI established as a Board of Management – members appointed on basis of skills + industry experience.

Operates as autonomous entity (at arms length from HCC based ‘Memorandum of Terms of Delegation’).

Constitution provides for prescribed membership with representatives nominated by key local agencies:

Nepean Blue Mountains Local Health District

Hawkesbury District Health Nova Employment Service

Anglicare Community Care Services Merana Aboriginal Community Association

Hawkesbury Multicultural & Youth Inter-agencies

Hawkesbury Nepean Community Legal Centre Hawkesbury Seniors Advisory Committee Hawkesbury City Council (3 staff and 1 Councillor) + 2 community representatives

PSI Governance Model

Leveraging Investment

1. through collaboration using the resources, stability and credibility of local government as lead agency -

key institutions/stakeholder invited to investigate opportunities for collaboration - allocating (Council and PSI) resources to drive these process;

jointly analysing needs of target populations to achieve consensus on regional response & way forward and feeding this into government planning forums

negotiating formal agreements – roles, governance framework & goals for collaborative partnerships;

establishing city-wide service coalitions as vehicles to submit tenders for regional projects.

Leveraging Investment

2. using assets transferred to PSI’s control as revenue base to achieve a comparative advantage

PSI uses community buildings as venues for new services so that it can compete with large NGOs.

income generated from reserves used as ‘start-up’ capital’ - changing funding environment requires institutions to outlay funds to place themselves in the position where they can competitively tender.

growth of PSI generates economies of scale required to respond to an increasingly complex, competitive, and commercially driven funding environment.

The Peppercorn ‘Model’A ‘third’ way a regionally based solutions model which sits between large charities + small NGOs.

A re-defined partnership approach makes best use of the respective strengths of local government, the NFP sector and state/federal agencies – it assembles infrastructure & community planning capability of local government; the flexibility & knowledge of community sector; and the resources of state/federal agencies;

A vehicle for social entrepreneurship - meets the challenge of an evolving funding landscape by achieving a sustainable comparative advantage - through: strategic leadership (for a defined community/geography) a unity of purpose in the face of complexity building connections to create better social value innovation, being pro-active and measured risk-taking

The Process

• Register Incorporated Association.

• Apply for DGR and PBI status from ATO.

• Transfer staff from Council to new employer (PSI).

• Transfer ELE and unexpended grants.

• Delegate Care and Control of Community Facilities

• Evolution from internal project management provided by Council staff to appointment of CEO

• Negotiate Memorandum of Terms of Delegation

Expansion of PSI2001 - started with 3 externally funded community transport services

and 1 community facility

2003 - Community Medical Transport

2005 - Hawkesbury Seniors Centre - Transition to Work Program

2006 - Centre Based Meals Program- Brighter Futures Early Intervention (Family Service)

2007 - Social Enterprise Cleaning Program - Hawkesbury Family Co-op (Community Builders Project)

- Forgotten Valley Mobile Resource Unit - South Windsor Family Centre

2008 - Hawkesbury Family Day Care - Richmond Occasional Child Care- Home Lawn & Garden Maintenance Service - Man Made Meals Program

2009 - Community Participation (Disability Service) - WYSH Project (Youth Service)

Outcomes• Secured additional recurrent funding of $1.5M - 60%

increase in annual community service grant receipts.

• created additional social value for residents through funding of new early intervention family services supported employ/training for people with disabilities social support service for older persons child-care + community services in disadvantaged neighbourhoods

community transport services.

• Annual injection of $1.5M in the local economy has been calculated to have generated 28 jobs, and a further $1.47M in flow on effects.

Benefits to Council

• specialised ‘arms-length’ community services administration with broad industry expertise

• cost neutral operations (eliminates cost shifting)

• created mechanism for social entrepreneurship (capacity to take calculated financial risks)

• infrastructure partnerships - Community Garage, commercial kitchen in Seniors Centre, South Windsor Family Centre

• competitive staffing arrangements (PBI) & vehicle for ‘arms length’ philanthropy.

Benefits to PSI

• ‘cut price’ access to suite of professional services + advice (finance, IT, corporate governance etc.)

• effective funding mechanism for service expansion

• access to purpose built community facilities

• increased opportunities to explore service partnerships within a wider network

• Deductible Gift Recipient + Public Benevolent Institution Status

Benefits to Community

• increased range of services (provided directly and indirectly)

• a more responsive vehicle for consumer input

• reduced costs of service delivery

• using ‘profits’ to deliver subsidised services + new initiatives

• regional service development mechanism to address service gaps

Lessons Learnt

• appointed a skilled CEO much earlier in the piece;• a contestable funding landscape will generate suspicion

of Council’s motivation – complaints of empire building etc. Invest time in establishing a formal memorandum of understanding with small NGOs to clarify objectives of PSI model (‘new’ funding is not a zero-sum game);

• strong focus on good customer services to offset the negative media of other service providers;

• industrially – some antagonism from unions (loss of members to rival unions);

• caution as to who to partner with – be the lead agency or pick the right lead agency to collaborate with

• ‘innovation’ is hard – particularly in local government

The Future Funding landscape is changing – funding ‘reforms’, NDIS, ‘person centred care’.

Catchment for contracted human services is moving away from local/district level posing challenges and opportunities for future growth.

PSI talking with large community housing provider to establish business structure for regional vehicle to tender for human services across multiple LGAs

Structure based on strong regional roots and proven track record. You need to turn up to not vacate the field to larger charities - charities not necessarily best providers of contracted services .