The prime provider model: An opportunity for better public service delivery? – Brotherhood of St Laurence – May 2014
Extract from the executive summary:
“Since governments began outsourcing services in the 1990s there has been considerable experimentation with different commissioning approaches. At a time of fiscal restraint and reductions in the size of the public sector, governments are exploring new service delivery models, particularly those that are seen to increase coordination in addressing complex policy problems, known as ‘wicked’ problems. One model that is receiving attention is the prime provider approach. This is an approach where government contracts with a lead or prime provider which in turn takes responsibility for organising and managing service delivery through a group of subcontractors or providers who are specialised and/or local suppliers.
Prime provider models operate in a range of health and welfare sectors. In Australia, a prominent lead provider model is the Communities for Children (CfC) initiative operating in 45 disadvantaged communities across Australia. Other examples of prime provider approaches in Australia include headspace and Partners in Recovery. The Brotherhood of St Laurence has been involved in developing innovative service models that operate within a prime provider framework.
The prime provider models in Australia tend to be locally based, partnership-type approaches delivering services to a specific client group. Many have been initiated by community or not-forprofit organisations rather than being driven by government. In contrast, internationally, prime provider models have been driven by government and developed as large-scale, commercial contracts that have attracted significant interest from large, for-profit companies. For example, the estimated cost of the UK Work Programme is £3 billion to £5 billion over five years(Finn, 2013).
The perceived benefits of prime provider models for government include greater coordination of local specialist providers, reduced administrative costs and enhanced opportunities for innovative service delivery resulting from economies of scale. The challenges for government in these approaches relate to the hollowing out of capabilities and provider or market failure. In addition, prime providers themselves are faced with challenges relating to managing potential risks and liabilities as well as contract and performance management.”
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