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Tuesday 5th November 2013
Chris Bates | Mutual spin outs from local government – messages from a series of workshops
Chris Bates has worked in the public sector all his career, including postings in the Department for Communities and Local Government and Reading and Hounslow councils. He has worked in many fields, including planning, housing, audit, local government policy and finance, strategy, partnerships and communications. He is now a public sector consultant specialising in support for local government staff who are interested in `spinning out’ their service into a social enterprise, or `public sector mutual’. Chris has also providing mentoring support for a charity.
Since May, 2012 I have been presenting workshops around the country with the not very snappy title of Delivering Local Government Staff – Led Social Enterprises to deliver Council Services. This article discusses the main points emerging from these workshops .
By “mutual spin outs from local government”, I refer to not-for-profit staff led initiatives with social objectives creating new vehicles to deliver services back to a council under contract. The new vehicles might be charities, limited companies, community interest companies, industrial and provident societies or charitable incorporated organisations.
Most attendees were local government middle managers, plus a few directors and the odd assistant chief executive (if I can put it like that). They represented various local government services, with social care staff frequently present. They all expected public service deliverers to look a bit different in future, and wanted to know about their options, including mutual spin outs.
If attendees were typical of their peers in local authorities generally, then a clear message emerges: despite a growing number of mutual spin outs from local government around the country, there is still much to be done to familiarise their middle managers with the mutual option. Enthusiasm for spin outs among middle managers is arguably more important than among chief officers, if they are to happen on a scale which, say, the Government intended with its Localism Act.
Many attendees at the workshops understood the basic concept of mutual spin outs, but very little more. A few knew a little about the legal models on offer. Hardly any knew about things like incorporation, liabilities, asset locks and tax exemptions.
Nothing was known about the Community Right to Challenge (CRTC). And in all the workshops so far, among all the staff attending over the last 18 months, only one person had heard of the CRTC grant, which provides £11.5 million to help local authority staff take up the mutual route. The grant is available whether or not the CRTC is used and would (as DCLG put it) “support every stage of the process – from setting up a vehicle and developing a proposal right through to the delivery of services on the ground”.
The workshop provided a comprehensive, if basic, introduction to mutual spin outs. Feedback continues to be very positive.
The workshop addressed social enterprise as a concept and the legal structures available. It explained benefits and risks by referring to real cases around the country. It unpacked the CRTC, looked at feasibility and business planning and touched on the Public Sector (Social Value) Act. We considered at TUPE and at procurement, both obviously of keen interest to attendees. Examples of entrepreneurial and other support, including funding sources, were provided.
An exercise enabled attendees to reach an initial view of which legal model might suit their service best. Most of the above models were picked at some point, with the charitable incorporated organisation starting to cause a stir of enthusiasm, eg for Leisure and Culture services planning to trade around primary charitable objectives and keen to benefit from non domestic rates exemption.
Another exercise invited attendees to identify next steps and challenges for them and their colleagues.
Relationship between would-be spinner outers and the Council.
Most attendees were present with the blessing of their line managers, but some attended ‘unofficially’. The majority of authorities whose staff attended were in listening mode – pragmatic and willing to support a spin out proposal if it meant running a service more affordably.
Almost everyone agreed that the support of the council was vital; the ideal situation was to work with a supportive council so that it wasn’t necessary to invoke the CRTC. A couple of attendees, whose services were `earners’, like catering, gloomily foresaw resistance from their council if they wanted to spin out.
Invoking the CRTC was felt to be a serious step which might strain relationships (and, ironically, make the process more fraught). The goodwill of the council was felt to be vital; if it resented the use of the CRTC, or opposed spin out anyway, there were ways in which it could seriously hamper progress (despite the CRTC supposedly putting staff in the driving seat). One example given was around competitive tendering for an initial contract, even where this wasn’t required-say under Part B of the Public Contracts Regulations, 2006 – a resistant authority might put such a requirement in its Standing Orders.
But it should be stressed that most attendees felt that their councils would support and enable them all the way “if the thing stacked up”.
A `star chamber’ to screen and support ideas
Councils and their staff needed the right forum at which to meet to discuss proposals for spin outs. One possible arrangement could be a `panel’ chaired by a senior officer on behalf of the Chief Executive, with representatives from finance, legal, HR, IT and other common services. The service looking to spin out would bring its proposals to this panel, where they would be screened, challenged and supported. It was important for everyone with an interest in the future of the service to come together to consider proposals in a full, corporate context. Recommendations could then be made to the Corporate Management Team and members.
Separating legal, financial advice, etc.
Attendees appreciated that, before any dialogue between staff wanting to spin out and their `parent’ local authority progressed very far, the staff would need to get their own, separate, legal/financial, etc advice on the feasibility of the spin out proposal. This was because officers in the authority’s corporate services had a responsibility to senior management and elected members, and couldn’t advise both sides. This applied even in supportive authorities, and could obviously cost money.
Staff engagement – and someone to believe in
The workshops spent some time on this; anyone leading a spin out proposal had to gain and retain the support of directly affected staff. And they had to lead: attendees noted the comment from one of our case studies: “staff wanted someone they knew, someone they could believe, leading this…”
It was also considered important to consult staff formally, via a proper ballot (even though the CRTC didn’t require it), after staff had had a full opportunity to consider any proposal. The Corporate Management Team, elected members and the TU side all needed to be assured that affected staff were in favour of spin out, and documentary evidence to this effect was essential in case the position was subsequently challenged.
These two issues – leadership and consultation – led quickly to a recognition in the workshops that a mutual spin out, at the end of the day, was basically a project around organisational change, and that sound project management disciplines were as important here as anywhere.
Functions and services
Attendees found it valuable to learn that, in a contract between the council and a mutual spin out, services (activities carried out by a LA as a result of decisions made, like street cleaning), could be contracted out but not functions (duties or powers requiring decision making by the council, like deciding a planning application.)
A head of planning at an early workshop was concerned that this could cause problems in seeking to spin out his planning service. He was heartened to learn that creative solutions to this were being found elsewhere: in the case of planning, an attendee reported that a local authority had contracted out the planning function to a private organisation, TUPE’d the planning staff across and then re-employed the former head of planning one day a month or so to take officer delegated planning decisions based on the recommendations of the contractor. Strict `Chinese walls’ had been very properly put in place.
This was an interesting discussion in the workshops on how mutuals might help address this complex social challenge. Local authorities work in partnership with local agencies like the police, the NHS, schools, employment and training services to support what are often known as troubled families, who have a range of complex needs. In some areas this is done effectively. Other areas – it was suggested – may be less effective in the way agencies’ respective funding streams interact and the way in which complementary actions are integrated between agencies.
Attendees at the workshops wondered if there were two main obstacles to achieving the best results for these families – reluctance to fully pool funding and a refusal to share personal information about the families. Again, while some areas would have overcome these challenges attendees knew of places where, for example, agency A “hadn’t know that agency B was working with the same family as them”.
Attendees wondered whether, in areas where there was more to be done, a single new social enterprise dealing with troubled families might help integrate efforts. Staff from all relevant agencies might be TUPE’ed or seconded into such a vehicle and become colleagues under one roof. This could make the pooling of funds easier and the sharing of sensitive information more straightforward.
Attendees could see that this would be more complex to set up than a single service mutual, and supposed there would be a range of practical or operational difficulties to overcome, but they thought this model might be effective in areas where there was more to be done for troubled families.
Attendees noted some of the comments of staff who had moved into other mutuals, eg “by setting up a SE we have been able to save money, improve services and become more efficient”, and “I feel excited and very positive about this opportunity to work in a different way”. These comments implied that there was a `single organisation loyalty’ dividend to be had, which might support cross cutting solutions to complex social problems as those posed by troubled families.
Some attendees came from Welsh local authorities, even though there is no CRTC in Wales. After all, in developing a mutual spin out, the same sort of information would need to be transacted between staff and their local authority whether or not the CRTC was used, such as proof of financial security, suitability to take over the service, the social, economic and environmental outcomes to be delivered for local people, and so forth. So staff from Welsh authorities, who have no CRTC, found the workshop pretty much as relevant to their needs as staff from English authorities who were looking to spin out without using the CRTC.
The workshop has so far been a one day event in city centres around the country, plus a one day on site event in a local authority in the midlands, run for its senior and middle managers of social care. Three service specific events have been held in a London Borough, condensed into 3 hours, for HR, Leisure and Culture and Children’s Services. An online version of the workshop is now being considered by National Training Resources Limited (NTRL). The workshop can be adapted further to suit audience requirements, such as the voluntary and community sector.
Future events are so far planned for 26 November (Newcastle upon Tyne), 27 November (Birmingham) and 28 November (Euston, London). To book a place please contact www.national-training.com.
I hope this article has been an interesting read with some useful material. If anyone has comments, corrections or ideas for next steps I would be very pleased to hear from them.
If you would like to speak to Chris about his workshops, please contact him at CRBates35@aol.com.
Wednesday 21st August 2013
The Guardian | What can we learn from Japan’s mayoral system?
Japan’s municipal mayors are part of a constitution which protects local autonomy.
Directly elected mayors may be relatively new in the UK, but this form of local governance has existed in Japan since 1947 – predating our oldest local structures.
When Michael Heseltine visited Japan as environment secretary in 1990 he was so impressed with the dynamism he saw in Sapporo, Japan’s fourth-largest city, that he begged cabinet colleagues to introduce the mayoral office into the desiccated British system. It was not until the rule of New Labour, a decade later, that the change happened.
Mayors have a lot of sway politically in Japan (Osaka mayor Toru Hashimoto even leads the third-ranked party in parliament), and in some cases turnout for mayoral elections tops that of national polls.
As in the US in recent years, voter disillusionment with the performance of national parties amid economic stagnation has seen the emergence of responsive city leaders as significant figures.
Monday the 19th August 2013
The Guardian | The evolution of social enterprise
The managing director of Greenwich Leisure Limited on how social enterprise has developed over the past two decades.
Our story began in 1993 when severe local authority funding pressures appeared to be about to devastate the ability of the London Borough of Greenwich to operate its leisure centres. The solution, devised in collaboration with the local authority, was to set up an autonomous not-for-profit enterprise that would take over running the centres from the borough’s own in-house team. We wanted to create a new model that had charitable benefits but still kept the public sector ethos with private sector business freedoms.
Twenty years ago, we were simply known as a “leisure trust”. However, customers and councils quickly realised that this was a good and imaginative way of protecting leisure services. We went from operating a handful of leisure centres situated within Greenwich to managing 30 leisure facilities by 2000, while today we operate more than 130 facilities across England and employ more than 5,000 staff.
We never envisaged in 1993 that the business would grow to where it is today. We started off by simply trying to save the service jobs in Greenwich; that was our initial objective. However, we always knew we could do more because we had great people from day one, most of whom are still with us 20 years on.
Wednesday 31st July 2013
The Guardian | Commonwealth Games countdown: it’s time for social enterprises to shine
With less than a year to go, social enterprises in Glasgow prepare to leave a lasting legacy.
“Glasgow 2014 will be our moment to shine,” said David Grevemberg, chief executive of the Commonwealth Games. The organisers of the Commonwealth Games were clear from the beginning about turning the glorious sporting moment into a legacy for Scotland. Can the Glasgow legacy vision become a reality?
Although there have been questions about whether the Olympic legacy has been fulfilled in London, especially as the anniversary of the games was this weekend, there is no doubt the volunteering spirit was inspiring. We saw this first hand when one project we helped set up saw teams of business people from the Olympic sponsors engage with visionary charities and social enterprises. Being coached in business skills as part of a year-long project has enabled those organisations to develop and reach more people, more effectively.
Last month I revisited three of them with one of those sponsors, BP. What made the projects stand out was they were organisations deep in the heart of the communities they served in East London; they all had vision and, a year after the Olympics, this was able to flourish because they were gaining business know-how.
Marcia Samuels from New Choices for Youth, a Newham charity working with 1,500 vulnerable young people, told me: “We now have a full cost-recovery model in place and a business plan; we are a more streamlined, more professional organisation.” Now it is Glasgow’s moment.
Wednesday 17th July 2013
The Scotsman | The fight to transform the health of the nation
EVERY year NHS Scotland hosts a meeting bringing together staff, partners from local and national government and the third and independent sectors.
This year saw addresses by NHS chief executive Derek Feeley, Cabinet secretary for health and wellbeing Alex Neil, and minister for public health Michael Matheson. All spoke, as in previous years, of the challenges as our population ages, finances tighten and UK welfare reform impacts, particularly upon those already marginalised.
Something felt different though about this year’s event. It followed publication of the Scottish Government’s new A Route Map to the 2020 Vision for Health and Social Care and, like the route map, emphasised not just improving services, but a paradigm shift in how we support the health and wellbeing of our population.
Central to this is the language of “co-production”, where people and communities are equal partners in design and delivery of support and services. Allied to this is the idea that health and social care is not limited to caring or medical tasks, but enables people to enjoy their right to independent living, participating as active citizens with support that focuses on what is important to them…
Thursday 11th July 2013
The Guardian | Socially sound bakery hopes to make enough dough to become sustainable
Hackney–based bakery trains people with mental health problems to give trainees skills for future employment.
Just over a year ago, Ashwin Mathews, its chief executive, was thinking about starting a social enterprise. His organisation had a long history of providing support, including day centres and sheltered employment, for people with mental health problems in north London.
As ideas about how to support people with mental health problems changed and cuts were made in public sector funding, Mathews wanted to do something that would be more socially useful. He wanted to give people with mental health problems an opportunity to develop skills that would enable them to move into further training or employment and would also generate a sustainable stream of income to reduce his organisation’s dependence on grants.
The Better Health Bakery, based in Steen Street, is the result. “We were looking for something that was quite labour intensive but at the same time was enjoyable and which also provided a genuine route into employment or training,” Mathews explains. “I eventually settled on a bakery.”
Tuesday 9th July 2013
Third Sector | More social enterprises increasing their turnover, says report
The People’s Business, prepared by Social Enterprise UK, is published today – but ministers must help social enterprises more, says Labour’s Chi Onwurah.
Thirty-eight per cent of social enterprises increased their turnover in 2012, compared with 29 per cent of small and medium-sized enterprises, according to a new report by Social Enterprise UK.
The report The People’s Business, to be launched today by Vince Cable, the Secretary of State for Business, Innovation and Skills, presents the findings of the State of Social Enterprise Survey 2013, consisting of 878 telephone and online interviews with senior figures in social enterprises. The findings are compared with results from separate surveys of SMEs.
The report says that social enterprises are more optimistic about future growth, with 63 per cent of respondents expecting their turnover to increase in the next two to three years, compared with 37 per cent of SMEs.
Friday 5th July 2013
Third Sector | Probation trusts to receive £500k to develop spin-outs
Cabinet Office announces support as part of plans to reform probation services by 2015.
Twelve probation trusts will be funded to develop seven spin-outs to bid for contracts under government plans to reform probation services in 2015, the Cabinet Office announced this week.
Staff at those trusts have been granted a total of £500,000 of support from the Cabinet Office Mutuals Support Programme.
The government is planning to remove the 35 current probation trusts and replace them with 21 prime contractors to deliver both existing services and a payment-by-results service to reduce reoffending. The new service will work with all medium and low-risk prisoners in England and Wales, and will go live by 2015.
Wednesday 26th June 2013
The Guardian | Counting the social value of social enterprise
Last week’s roundtable debated the future growth of spin-outs from the public sector and how participation could be encouraged.
I chaired a lively seminar last week, sponsored jointly by the Transition Institute (which is currently residing at the Royal Society of Arts) and the Guardian. The focus was social enterprise spin-outs from the public sector and how to encourage greater participation.
Last year, the Institute launched its State of the Sector survey, which offered UK spin-outs the opportunity to share their views on the challenges faced in their sector, their experiences and lessons learned, and what processes they had undertaken. Spin-outs, as defined by the Institute, being “organisations that have transitioned out of a public sector body to become independent public service providers. Spin-outs tend to prioritise the maximisation of social value within their services and usually take the structure of a co-operative, mutual or social enterprise”. The purpose of the roundtable was to debate the spin-out sector, the new Public Services (Social Value) Act and the challenges faced by today’s social enterprises.
There was a wide-ranging debate involving people running social enterprises, from central and local government, academia and think-tanks. Unusually, for these kinds of events, a common approach emerged which seemed to have quite broad buy-in...
Read more about the Roundtable.
Wednesday 5th June 2013
Public Finance | Making social value count | John Tizard
The Social Value Act could have a huge impact on community wellbeing – but only with genuine local involvement and an imaginative and unfettered approach
Attending a recent workshop on the Public Services (Social Value) Act, I was impressed by the enthusiasm for making it ‘real’ and for using it to make a tangible difference for local communities. The Act, which came into effect in January, requires local authorities and other commissioners of public services to consider how their services can benefit people living in the local community, in particular they must take account of the social impact of contracts before starting the procurement process.
Monday 29th April 2013
Public Finance | Real impact of Social Value Act
It’s good that the public sector is now required by law to take into account social benefit when commissioning services. But the strength of the legislation derives from its ethos and ability to change behaviour rather than the legal content
Chris White’s Private Members Bill requiring public sector commissioners to take into account social as well as financial value was enacted last year and came into force on 31 January 2013.
Wednesday 17th April 2013
Guardian | Would we have had social enterprise without Margaret Thatcher?
Read Allison Ogden-Newton’s fascinating article on the Iron’s Lady’s impact on social enterprise.
There probably aren’t many Margaret Thatcher fans among social entrepreneurs, with most attributing the growth of market economics in social arenas to the measures introduced by Tony Blair. But would we have had the Right to Request without de-nationalisation or the Right to Buy?
As Ed Miliband said during parliament’s tribute sitting, Thatcher was right to recognise that our economy needed to change. In 1982, she said: “How absurd it will seem in a few years’ time that the state ran Pickfords removals and the Gleneagles Hotel.”
Thatcher introduced the idea that government should stop being the default employer and that the public sector needed mixed models of delivery – thinking that has been shared by successive governments ever since…
Wednesday 27th March 2013
Guardian | The Public Services Act must not be allowed to gather dust
Local communities have shown an appetite for developing the social value approach via the new legislation.
The Public Services (Social Value) Act has been in place for just under two months and although it is difficult to judge the progress of the act so shortly after its implementation, the early signs are positibe. There have been a number of conferences and briefings about the act organised by bodies representing charities, social enterprises, public sector bodies and businesses that have been well attended, some which I have had the opportunity to speak at personally. I believe this has shown that there is a strong appetite among communities to develop the social value approach and to ensure that we make the most of this legislation.
Continue reading Chris White’s article.
Tuesday 18th March 2013
Guardian | Live discussion: making the government’s city deals work
In advance of the Guardian’s Live Panel Discussion, to which our Chair, Allison Ogden-Newton, is contributing, Sarah Marsh writes about the ‘city deals’ programme, which was designed by cities minister Greg Clark to to make our core cities more autonomous, in order to create powerful, innovative economic hubs that can look outward to businesses and the wider community rather than up to Whitehall to tackle local problems.
Monday 4th of February 2013
Guardian | What will the Social Value Act mean for social enterprise?
Expert advice from the Guardian’s recent live debate on how social enterprises can make use of the Act. Read more
Friday 21st of December 2012
Guardian | Is the Public Services (Social Value) Act a no go for small contracts?
The government’s target of enabling over one million former public sector staff to achieve mutual status by 2015 echoes the aspirations of many in the public sector who want to carry on doing the job they love and are interested in more independence – but only if the deal is right. For them, the choice between moving, via the TUPE process, to work for a large listed company with a reputation for stacking it high and selling it cheap, or clubbing together with trusted colleagues to ‘go it alone’, is an easy one…
Tuesday 21st December 2011
Ethos Journal | Spinning Out
If you work in local or central government, the chances are you might not have paid much attention to the Public Services (Social Value) Bill currently going through Parliament. For those who work with or deliver public services, however, the Bill may have a very real impact on your work for years to come.
Monday 28th November 2011
Third Sector | Social value, rather than price, could influence future commissioning
If you work in a charity or a social enterprise, the chances are you might not have paid much attention to the Public Services (Social Value) Bill, which has just cleared its Commons stages and is about to be considered by the House of Lords. However, if you work with, or deliver, public services then the chances are that the Bill may come to have a very real impact on the work your organisation does for decades to come.
Wednesday 23rd November 2011
eGov Monitor | Public services that spin out more social value
The architecture of public services in the UK is in transition and focusing on the social enterprise model aimed at delivering social value is not a bad place to start.
Monday 21st November 2011
Guardian Online (Public Leaders Network) | Buying into a social value ethos for public services
Public sector spin outs have a social value ethos, and if a parliamentary bill to reform commissioning succeeds, it could give them a competitive advantage, argues Dom Potter.
Thursday 20th October 2011
govtoday | Supporting public services that create real social value
The architecture of public services in the UK is in transition. Across the National Health Service, Local Authorities, neighbourhood schools and libraries our public service institutions are being remodelled.
Monday 3rd October 2011
Care Talk Magazine | Social enterprise for social care
Public services in Britain are currently undergoing a significant period of change. Social care is no exception and is perhaps feeling these changes more keenly than most parts of our public services.
Read more… (p.24)
Tuesday 16th August 2011
Guardian Online (Public Leaders Network) | A supportive culture will beat fear every time in public service reform
The focus on public service reform has been particularly sharp in recent years due to the economic climate in the UK and beyond. Overarching economic principles have formed the imperative to reduce costs in central and local government, and so far it has been these principles which have seemingly driven much recent reform.
Tuesday 16th August 2011
Guardian Online (Public Leaders Network) | The ripple effect of spin-outs: improved services or just economies of scale?
Recently a debate erupted on Twitter: would outsourcing services, where the focus is often on achieving economies of scale, be an obstacle to better services or an opportunity? While it’s true that economies of scale are often treated with suspicion when it comes to the public sector, where the vision of private sector monoliths stacking it high and selling it cheap is understandably unwelcome, we are seeing a growing trend for service providers being enabled to spread their delivery model beyond the boundaries of geography or even service type, and that’s not necessarily a bad thing.
- RT @SocialValueLab: Social Value: A Commissioning Framework from @CollaborateIns & @Transition_Inst http://t.co/Ns3yEp209C #localgov #socent
3 days ago
- Thank you to all the people who attended today's launch event. We were delighted with the high level of ideas and discussion. @aogdennewton
4 days ago
- RT @CatherineWilton: @aogdennewton @lordadebowale It is about power-citizens getting more of it
4 days ago
- RT @aogdennewton: Thrilled 2 introduce @Transition_Inst @CollaborateIns 1st report on Social Value A Commissioning Framework at a packed seminar @ Southbank
4 days ago
- RT @SocialValueLab: Social Value: A Commissioning Framework from @CollaborateIns & @Transition_Inst http://t.co/Ns3yEp209C #localgov #socent