Presentation by Andrew Nutter, Director of Service Delivery and Deputy
Chief Executive, Local Care Direct.
1.What makes you a social enterprise?
 Choices
o The GP opt-out 2004 – decision time
o Options
 Being part of the NHS
 Federalised model
 Profit-company
 Part of a big corporate
 Aims
We wanted a structure and model which:
o put patients before profits
o was accountable to the communities we serve
o promoted flexibility, responsiveness and innovation
o gave stakeholders a voice
 Role of Members
o Anyone aged over 16 living in the areas we serve can be a member of
Local Care Direct.
o Members receive information from the company, can attend the annual
meeting and under the rules have certain limited powers.
o The appoint members of the Advisory Council which is a wide
stakeholder group intended to advise Executive and Board and the
Council proposes two of its number to the LCD Board (other Board
members are directly appointed for their specific skills and experience)
o Involving and engaging with the public/members is difficult and
involves clarity of purpose and hard work over a prolonged period to
deliver results.
o Clarity of the role of members is essential. Don’t pretend you are a
member-led organization if members are removed/distant from the
decision-making process. If they are involved directly, is your
organization structured to make this work?
 Our Learning
o Social enterprises need to define exactly what they are – not worry
about how they fit into someone else’s pigeon hole. Define what you
are and why and then articulate this clearly to others. There is
significant diversity within the social enterprise sector and very few
social enterprises are alike.
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o Make sure your business structure works and be prepared to change it
if it doesn’t. LCD had to change its governance structure almost
immediately.
LCD’s current model is a hybrid of a standard business board and a
member-led organization. This fulfills the commercial and business
needs of the organization well but is less clear and effective in terms of
the role of members and the direct involvement of communities in their
services. A member-led organization sounds democratic and
empowering at a grassroots level but will it deliver the necessary
governance, board level skills and experience to drive the organization
forward?
o If we are truly a values-driven organization then we must make values
real by bringing them into the boardroom and the decision-making
process at every level and by being prepared to make hard choices.
o Should a social enterprise do more than that for which it is
commissioned? LCD’s future business model will look at reinvesting
surplus profit in the community as an added value benefit.
2.Are you listening to your stakeholders?
 Our marketplace
Healthcare is a volatile environment in which to trade and is subject to
change at national and local level. We have had to be alert to what is
happening and quick to respond; adapting ourselves to developing
situations. Although original set up to provide out of hours, we quickly
identified the increasing integration of urgent and primary care services and
were well placed to respond when the Government announced that all areas
would have a new Equitable Access Centre.
 NHS procurement & commissioning
World class commissioning has been a mixed bag. Commissioning skills are
still variable and understanding of different types of provider organizations
and their strengths and weaknesses is not always supported by procurement
policy. In particular, we have found that whilst the NHS and social
enterprises share common values – commissioner understanding of social
enterprise is limited and this can be a serious obstacle to building trusting
relationships and securing contracts.
We have taken part in numerous NHS procurements – the quality of these
exercises varies and is very resource-hungry for small to medium sized
organisations
 Working with the NHS
We do all our business with the NHS – Primary Care Trusts and some Acute
Trusts – and whilst we try to influence policy we must accept we are
vulnerable to short-termism, political change and the NHS way of doing
things. LCD has worked hard to develop strong relationships with key
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individuals and to develop a reputation of being a trusted partner which will
not only deliver contracted services effectively but will also challenge, be
proactive in solving problems and identifying opportunities to improve
services.
 Our Learning
o Never assume that being a social enterprise gives you an advantage in
procurement. If you don’t meet the spec, answer the questions and
score the points then you won’t get the business. Nor will PCTs “make
allowances” because you are new, small, busy, or lack the necessary
skills to complete bids. One commissioner told LCD they “didn’t give a
damn” about our social enterprise status providing we delivered.
Reputation and procurement success is based on trust, track record,
quality and price – being an SE only comes into play if you tick all the
above.
o Don’t let things happen to you. Build relationships locally ( and
nationally if possible – become a member of the Social Enterprise
Coalition!) and try to influence things. In procurements be prepared to
challenge specifications and requirements (at the start of the process,
not the end!)
o Maintain relationships through customer and contract management –
this helps to know what is happening in advance; what your customer
thinks about you and shows you are open and listening to them.
o Don’t under-estimate the resources needed to take part in NHS
procurements or the tight timescales which may be set for your
response. If you haven’t got the necessary skills/resources you need to
acquire them. Never put in a sub-standard bid – you won’t win and it
will damage your reputation for the future.
3.Do you have a sound business model?
 Business Model
o The business model is what links different aspects of our business and
seeks to make sense of the tensions between the desire to be a
values-driven social enterprise and the necessity of being a viable,
sustainable business.
o By understanding that we cannot maintain our commitment to the
community without being sustainable we avoid the danger of seeing
values and business as mutually exclusive.
o We have recognized the need to define what we do so we do not set
unrealistic goals and expectations and then fail to live up to our core
values; and we do not confuse values and principles. Values guide the
way we work and think but are a contribution to debate and decisionmaking along with commercial needs. Principles are immutable and are
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not compromised even when this means potential damage to the
organization i.e. a customer asking us to do something which we
believe to be inappropriate.
o We develop a business strategy and plans and keep these under
review constantly. In delivering these plans we aim to grow our
business to bring our service to more communities and to increase
profitable business to make our business more sustainable and support
investment.
o We are also seeking to diversify and extend our business portfolio so
we are less reliant on our original, core customer base and services.
 Our learning
o Organisations must operate on sound financial basis; no-one will bail
you out
o There’s no such thing as not-for-profit ( unless you’re a football club!)
o The vital importance of doing your homework and getting you’re
numbers right so you don’t enter in to a contract which won’t pay its
way
o Social enterprise and commerce need not be mutually exclusive – but
you need to have a business model that supports your approach
o The tenure of contracts has a significant bearing on organizational
stability
o Growth needs to be managed carefully: too fast and you can struggle
to deliver, too cautious and opportunities are missed. You must ask
yourself: can you mobilize the contract and deliver it without
detrimental impact to other business?
4.Do you have the right people and skills?
 Getting everyone on board
o LCD was formed by a relatively small group of like-minded people
working in healthcare who saw an opportunity to respond to changes
in service provision through a values-based vehicle
o The organization inherited most of its people from predecessor
organizations through TUPE
o Start-up and mobilization required a huge commitment and very long
working hours; it also required knowledge and skills which we didn’t
have inside our management team – these were acquired externally
 Attrition and the changing face of LCD
o In five years LCD has been transformed in terms of what we do, the
way we do it and most importantly the people. Only one member of
the original Board remains and only two of the original five executive
team.
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o Over time – in line with the growth and development of the business roles have grown in scale and complexity and changed in focus. As a
result personnel have changed – sometimes of their own volition,
sometimes the result of the organization needing to change. This is
challenging on both a management and emotional level.
o Making time to develop our own people when faced with the pace and
urgency of organizational development has been a challenge and is an
area we can do better.
o NHS commissioners require a high standard of people management in
their contracts and this places significant demands on organizations
and without question, professional HR advice.
 Our learning
o Having people with drive who aren’t afraid of very hard work and long
hours…and can deal with stress well
o having the right skills
o Understanding that organizations change and people need to change
but that changes need to be managed sensitively to avoid
demotivating the team
o We are nothing without our people and we need to make time and
provide resource for their continuing development
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Local Care Direct – the facts and figures

We are community benefit society registered with the Financial Services
Authority under the terms of the Industrial & Provident Societies Act 1965

We have “members” rather than shareholders who are drawn from the
communities we service and which hold a nominal £1 non-transferrable share.

We have an asset-lock provision which ensures the assets of the business can
only be transferred to a similar organization by member approval

We have almost 1,000 members who elect representatives to an Advisory
Council from which respresentatives are selected to the Board – which also
includes appointees.

Mollie Temple CBE is the current Chair and leads a Board of 9 with five nonexecutive directors and three executive directors.

Local Care Direct is one of the country’s largest social enterprise health
providers

Formed in 2004 it has grown in size and reputation and has contributed
significantly to Government policy on the role of social enterprises and health
procurement and commissioning.

Services have grown significantly in five years – LCD now provides a wide
range of urgent care service such as GP out of hours cover; but also operates
3 of the new Equitable Access Centres in West Yorkshire and a traditional GP
practice.

Turnover is now in excess of £20m, all of which relates to NHS contracts

LCD has a workforce of around 1000 staff and sessional clinicians
The LCD “journey” has been one of continuous improvement and development,
difficult choices and lessons learned – often the hard way.
Survival and success have been built on three tenets: hard work and commitment;
knowledge; and adaptability.
Our willingness and ability to adapt and respond to the volatile and
changing environment in which we operate has been crucial.
The NHS is constantly subject to change driven by Government policy or local
strategy and organizations which trade with the NHS must factor this into their
business model and plans and beware the risks of a rigid approach.
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Local Care Direct is generally acknowledged as one of the leading social enterprises
in health: a successful provider which has developed strong relationships with its
NHS commissioners and a nationwide reputation.
Whilst this may be true it is only part of the story. We have made mistakes along the
way and on several occasions have had to rethink our ideas and plans. We think this
is a strength and how we will continue to learn, grow and serve our communities.
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