Friday, January 30, 2009

`Insourcing' - and why it is bad for you

Amid all the bad news for the third sector, here's some more.

Last week,a body I hadn't heard of before called the Association for Public Service Excellence released `Insourcing: A Guide To Bringing Local Auhority Services Back In-house claiming a "strategic and operational case for bringing services back in-house from the private and third sectors".

Its funny, but although very little makes my head hurt these days, this did.

So why the hot collar? The report, based on case studies of about 55 local authorities, said the benefits to councils of bringing services back under their control included improved cost-efficiency, better-performing and higher-quality services, as well as enhanced community wellbeing.

In a piece for the Guardian, while being careful not to call for renationalisation of any out-sourced services "without serious consideration", its CEO, Paul O'Brien seems to seriously believe, on the basis of his case-studies, that the public sector generally offers better efficiency, performance, quality and value. And that the tide has turned, historically and ideologically, for the sector which he champions.

Indeed his piece was also tinged with that a kind of `told-you-so', leftish schaudenfraude about the problems being faced in the private sector. The same sector, of course, that directly provides 20 odd percent of the tax to pay for public services.

On finishing his piece, I had to wonder where Paul had spent his life this last twenty or so years. If, like me, he has spent it dealing daily with the human consequences of inefficient, underperforming, low quality, expensive public services, then I am fairly confident he would not be able to write about the public sector the way he does.

Indeed, my life-experience tells me that uncontested in-house services provided by people who never had to account to anybody, whose performance was seldom measured and whose interests, as producers of services, were always put well before those of the end user, tend to be grossly inferior, by and large, pound for pound, to those I have seen provided externally. And definitely worse than those found in the third sector.

You see, Paul, and many like him who champion big government just don't understand three very important things: The first is that is services don't have to be run by the public sector in order to be publicly accountable.

Indeed, in my experience, being `in-house' actually doesn't help accountability because those doing the accounting (Councillors) are put in a conflicted position. They `own' the problem and, in my experience, are less likely to be tough on it.

It is much harder, therefore, to take a hard, detached view about the effectiveness of a public service when you also employ the people who deliver them. Accountability is improved by distance, not proximity.

Secondly, Paul and Co don't understand that most of the improvement that we have seen in public services in the last 20 years has been down to the fact that we have done away with monopoly.

Even when `in house' wins, as occasionally happens, it has to do so against competition. This means transparency on cost and outcomes, insofar as councils can be completely impartial to their own in-house bidders.

Look at my own sector, learning disabilities and mental health. It was actually Thatcher who decreed that 80% of community services had to be procured out of house. I am totally confident that had that not happened, provision for these groups would still be in 1985 (as it is in much of the residual 20% remaining `in-house'.

Thirdly, there is a great big misapprehension about the value for money argument. Yes, there will be cases when the public sector looks cheaper. But how often is the full cost of that public provision actually made clear?

The truth is hardly-ever. Indeed, I have never once in 20 years encountered a single public service where anyone involved, even at senior level could answer the question of what it truly costed to provide that service in-house.

And that's before you include the cost of pensions. This is often excluded from the calculations of public sector costs because its equivalence in other sectors would be so costly as to render the public sector hopelessly uncompetitive.

My heat subsided, however, after a good chat with a friend of mine from the private equity world (who has helped us a lot more than any council ever did).

He pointed out that although there is a bit of froth right now about the new age for public services, the truth is that the country can't afford them and that, very soon, the economics of having to provide modern public services that don't cost the earth, will revert to the long-term trend: outsourcing.

I think he's right. After the election, whoever wins will have to put up taxes and reduce public spending in order to keep international lenders willing to lend. To keep the British public on-side, there will need to be proper reform of public services and continues, massive outsourcing.

Enjoy your moment in the sun, Paul. It won't last very long.

Saturday, January 24, 2009

Don't Just Do It....

On Friday, several major companies closed their final salary pension schemes. Not to new staff - that happened ages ago - but to their existing people.

From now on then, I presume, those guys are on their own, bar what they've already accrued.

Contrast this with the position of most people working in the public sector, including, as it happens, my wife and my brother.

My wife is 33 and, if she pays in 7 percent of her salary from now on, the council will make sure she retires on about fifteen grand a year.

This is a `defined benefit' based on a percentage of her final earnings.

Likewise, my youngest brother (28) has just joined a council as an Environmental Health Officer. Of course, he's just joined their final salary pension scheme which offers a similar deal to my wife's.

About two thirds of final salary.

These kinds of deals were withdrawn by most employers a few years ago now on the basis that they had the potential to send them bankrupt.

Now just compare Katy and my brother's position to my own.

Speaking Up pays 5% of my salary (which is more than both of theirs combined) into a scheme which, I am told in jolly-sounding letters from my pension-provider, will pay me just over £3000 in current value when I retire.

This is because my pension, like most, depends on the performance of stocks and shares.

So the deal for me is this: I put in more money (lots more) than them. This money is all at risk (I could lose the lot, they have `defined benefits'). And that get a heck of a lot less in absolute terms at the end.

Scarily unfair. Indeed, I am sure even the likes of Dave Prentice or Mark Serwotka (heads of Unison and CPSA unions) can see that from a social justice point of view, things just don't tally.

Because what we are all heading for very quickly, therefore, is Pensions Apartheid. Fantastic lifestyles beyond 65 for those in the public sector. B & Q for the rest of us.

Hopefully, Katy's pension will insulate me from the fate of stacking loft-insulation, but what about everyone else?

The serious point I am making here is that it can't be healthy of have yet another major social cleavage opening up in an already deeply fragmented society.

Resentment, already being heard on the phone-ins, will turn into bitter anger.

The point being made on Five Live etc, quite understandably, is the people in the private sector tend to lose their jobs quicker and often have inferior terms and conditions of service(hours, flexibilities etc) than found in the public sector.

Urgent Government action is needed to address this. Indeed, the financial crisis may even force their hand.

This isn't impossible. For if big international lenders come to think that the UK Government might not be able to pay them back, we might, as a nation, simply not have the funds we need to pay for TODAY'S schools and hospitals, never mind the people who used to work in them!

The case then is very clear for a new deal on pensions. Firstly, make sure everyone is paying something in to a scheme on a compulsory basis. No arguments, we all put in.

And, secondly, the end of all defined benefit schemes in the public sector. Today. For ever. You get what you've put in so far, sure, but that's it. After that, it depends on how investments perform.

I am sorry to say this - because it will hurt my household too (Katy and I can work together on B&Q, on neighbouring aisles, perhaps) - but I sincerely believe that the country cannot afford this, either financially or socially.

The figures, you see, are truly frightening.

Did you know, for example, that there are more retired coppers now who recieve a pension than there are police officers in service?

This is because police officers, like fire-fighters and countless other groups, can quit after 30 years service on a good portion of final salary.

But what's really going to pile on the pressure are the retiring Baby Boomers. People born between 1945 and 1951.

This massive cohort are all coming up to in 2010. As a social group, they outnumber the generations after quite considerably.

And we are the ones charged with funding their retirements.

Unfortunately, the public sector in particular is packed with them.

Teachers, social workers, nurses and doctors, all of whom began careers in the sixties and seventies, all now clocking off at the same time.

It just can't be done. And our current politicians will make sure it isn't done, yet.

Gordon Brown will simply not take on the unions this side of an election, especially if he's going to try for a pay-freeze in the public sector (necessary in my view).

The Tories might promise reform but won't want to alienate the public sector vote by being explicit (though they will be ones who eventually do it). The Lib Dems will, as ever, call it as it is, but neither will they win.

So, for a couple of years at least, this will go untouched. But watch 2010-2015. The clamour for change will become irresistable.

And this week's news of the end of final salary pensions in the private sector will be seen as the Beginning of the End for Pensions Apartheid.

I might as well buy my orange overalls now.

Thursday, January 22, 2009

One for the Road

One of the things I like most about my job is trying to win new work. Four of us spent two days this week traversing the country to pitch for new contracts.

Our journey together actually began on Sunday evening. My new Director of Business Development, Paul Morrish, had, using his immense personal charm, got us all into our dark office late on Sunday evening to rehearse and perfect our presentations.

That done we headed down to Essex on Monday and, thanks to our late-night efforts, delivered a polished and professional pitch to the panel. I have attended many of these in my time and it was one of the strongest I have witnessed.

Then off we went, up the M11 and across the A14 and M6 to Birmingham. We were on first thing so, quite sensibly, we stayed over and spent the morning rehearsing rather than stressing whether we would get there.

Again, a bravura performance. Paul's orchestration of us all was excellent and, in Sue Lee, I probably have one of best people in the UK in terms of the specialism needed to win this work.

So, did we win?

We don't know yet. We should win at least one. The vibes were good in both cases. I saw a clear desire on the part of commissioners to get it right.

What could, however, stand in our way, are two things. Firstly, we are a dearer, higher quality option than most in our sector.

In the years of milk-and-honey, this hasn't hurt us but, going forward into recession/depression, I worry that "value" will now seen increasingly seen in pure pounds and pence, bang-for-buck terms.

Put simply, if our great presentations and willingness to discount don't win it for us this time, I will be very worried indeed about what the future holds.

Failure will, I think, mean we will have to reinvent our offer completely. A lot cheaper. Possibly not quite as good.

Conversely, if we do win, I will feel assured that there is a place in this market for our kind of propostition. Our high-quality, upper-quartile price model will be intact.

The second thing that could stand in our way, depending on how the land lies locally is that the incumbents are both local organisations that will, quite possibly, be imperilled if they lose these contracts.

I have known commissioners in the past to take no heed of this and procure the best service regardless.

But I have also known them to feel obliged to `shop local', particularly when an organisation is at risk, even when the proposition is weak.

This is something I don't like but it sometimes happens. These particular commissioners, however, seemed, to me, to be pretty sensible.

I just wish that telephone would ring.

Rest in Peace, Neil Sears

Yesterday I heard about the suicide of Neil Sears, head teacher of a special school in Cambridgeshire where, five years ago, we began our work in schools.

Neil was one of Young People Speaking Up's earliest backers and was instrumental in bringing other heads and senior teachers on board throughout the county. He was found dead on Tuesday afternoon, shortly after the end of the school day.

When I heard about Neil's death (he was 52), I was, of course totally stunned. He was an inspriational, likeable figure, just the right kind of personality for the head of a school which was in the process of transforming itself into becoming mainstream.

I was last at the school in the second half of last year on a `Back to the Floor' visit to see our Young People's project in action. Afterwards, I spent most of the lunch hour with Neil, talking about the school, how well it was developing.

He was one of these people I always felt glad to see. He always made me welcome, pumped my hand, told me how delighted he was with our work in the school, what a big difference it made to the kids.

He also talked very openly about things. Over the lunch-hour it became clear that although big stides had been made in getting the integration going with the mainstream school down the road, it had been hard-going. He was, though, overwhelmingly positive.

All the children were eating dinner while we stood talking. Laughing, chatting occasionally being brought to order, strictly, but kindly by Neil.

His devotion to the young people in his care was recognised and reciprocated by the clear affection, even adulation, he inspired in pupils, parents and staff. I remember leaving thinking how glad I was he was in charge there.

I am seldom impressed when I go into our schools. So many of the staff seem tired and disengaged. But even after 13 years at Meadowgate, Neil showed none of that, publicly at least. He came to our AGMs, brought the kids to events, always willing to go beyond what would be expected. He was probably our biggest single supporter in all the schools in which we now work.

About three years ago I think, he took the Headship of the school after a long stint as Deputy. I spoke to him at the time, a few months before his appointment, encouraging him to go for it. Neil wasn't a massively confident man, but he went for it and got it, to the delight of many us, myself included.

I don't know how the job sat with him in his own mind but I get the sense, somehow that he struggled with parts of it. Whether the job played a part in all of this I don't know but I wouldn't be surprised, somehow, if it did.

When somebody this good takes their life, it just feels terrible. His pain must have been profound and his loneliness unbearable.

The world has lost a great teacher and a brilliant leader this week. Not one that was ever celebrated or known beyond his own town but someone who has left a mark on many lives.

Including mine and those of my staff who saw him twice a week for the last five years. Their sense of loss is, of course, intense and all the more powerful for their close acquaintance with him.

Today is a truly day for everyone who knew Neil Sears.

Friday, January 16, 2009

Feet Not Touching the Ground

I left my house at 6am on Tuesday this week and didn't hit my own bed (well, the spare actually, the walls were shaking due to my wife's snoring) till 10pm Thursday night. Three fourteen hour working days with tons of travel. Bushwhacked.

So it has been a busy week for the CEO of Speaking Up! All of Tuesday was spent with my excellent CEO Kathleen Cronin interviewing interim managers at Odgers in London. Miss, miss, miss and finally HIT.

We seem, in our choice of interim, to have found one of those rare beings that bring order where there is chaos and sense where there is none. `Halleluliah!!' - as my two year old has, worryingly, just started saying every time she comes home from nursery.

Dinner at Carluccios with the lovely Louise Burner from Impact Beyond. Louise is the poshest person I know (she went to school with Princess Di) and also one of the best consultants I have encountered.

She is helping 25 people from right across Speaking Up, from users right through the CEO, write a plan for the 2010s. Louise comes free with our excellent package of support through CAN Breakthrough. But you can find her yourself at

Wednesday was one of those rips through London in which I seem to specialise these days. Breakfast in Russell Square Gardens (quite delightful btw) with my old mucker Owen Jarvis of Aspire Foundation then off to the final meeting of the ACEVO DWP Taskforce chaired by the human-spark that is Tony Hawkhead, CEO of Groundwork.

Almost single-handedly Tony has turned the death-formula of a 25 person committee to look at the issue of third-sector delivery of welfare-to-work services into a fun gathering at which things are getting done. Last meeting today as the report is ready. Not my subject area, so little to say, but interesting.

W2W will however be severely challenged by 3m unemployed. Sadly, the Labour Government is 10 years late on this agenda. Had they done it when Frank Field first put it forward in 1998, and there was some money around, the problem would be gone now. Nice one, Gordon (you helped stop it first time round).

Then onto the graduation for 30 odd people from Level 2 Unlimited. Now this was my type of thing. Every person in the room a social entrepreneur. All doing things. I did my usual presentation of my own story, laced with a few pointers (not that this crowd needed telling).

Lovely reception. Had my lunch with Cliff Prior who is one of the brightest people in the sector, somebody who is always worth hearing if you ever get the chance.

Then I handed the stage to Trevor Lynn, founder of Mow and Grow and Level 3 investee of Unltd Ventures. Trevor is a real-proper social entrepreneur. `Cutting Grass, Cutting Crime, Cultivating Success'. That's his strapline which kind of says it all.

Like all the best social entrepreneurs, Trevor has put together a model in which he gets paid for cutting grass, paid for training people to cut the grass and paid for turning the grass into compost.

He's managed to franchise the business and looks set to become a superstar. He also lives near Bury St Edmunds where he's now setting up Mow n Grow. We're meeting very soon in front of the roaring fire at Bury's magnificent Angel Hotel.

As Trevor winds up I rush off to meet with Nat Sloane of Impetus Trust at the British Library. Nat is probably my biggest individual mentor. He made a decision five years ago to back me and Speaking Up. Our partnership has been long and, I think now, mutually beneficial.

Impetus took a flyer on me when I must have looked a massive risk. Half a million quid's worth of a flyer. Using their own money. Now I am a grown-up social entrepreneur, I appreciate more and more just what a big thing they did. I hope, one day, to be helping Impetus to find the success stories of tomorrow.

The long day ends at Admirality House for `Meeting of the Minds' - a Social Enterprise Coalition event hosted by the Minister for the Third Sector, Kevin Brennan, bringing together key people from social enteprise, Government and business.

Meet some great and not-so-great people but I am sorry the evening has to end at 9.30pm. Apparently "deals" are being made at other tables. I miss out on this obvious dividend but it feels like a good use of time. Miss the train home. Wind up in bed at 1.30am.

Then I am off at six thirty to Nottingham where we have a big Speaking Up service. We have very recently lost a valued staff member there, Charlotte Knitter, who tragically died of a stroke at only 33 years of age. The team are traumatised, some are clearly not sleeping well or finding it easy to work.

My whole senior team are up there, yes, because there's work to do but also to show support. This person's death came as a total surprise as she was in perfect health. She was simply very, very unlucky.

Our day ended with a meeting with a potential partner up there. It was an interesting one as they are long-standing and local and we are a more recent presence and a `national'. That took some getting over in the meeting but I hope some progress has been made.

While this was definitely not an immmediate meeting-of-minds, it was the start of a dialogue which will, I think, get somewhere. As the economy goes south, I believe third sector groups of all shapes and sizes will need to make alliances that don't come easily.

As I arrive back in Bury St Edmunds at half-past nine on Thursday night, kiss my sleeping kids and collapse with a dried-up dinner, I am reminded of the proverb about mountains being climbed one step at a time.

Friday has seen me working from home. Highlight of the day was taking Ruby swimming in a near-empty pool, her hands clasping hold of me, her human Life-raft. Her simple delight in the water. The adventure of floating. I, bouncing along with her, in my own version of rapture.

The house I have just moved into h

Thursday, January 8, 2009

250 dead children

I have never seen a dead child. There is something about life foreshortened that makes the incidence of death more powerful. As a parent, I try not to imagine the impact the death of one of my children would have on me. I know that I would probably, for a time at least, not want to live. Death would feel like a warm escape.

Which is why this week's news bruises the heart so much. Children should not die in war. They are not `agents'. They do not even vote. Yet here they are, piled up under rubble, maimed in ambulances.

I am not a flag-waver for the Palestinian cause. As a people they are poorly led. And Political Islam has, in effect, led the world to wash their hands of their cause. As Michael Portillo said this week, it is clear that there is only one solution: two states. The problem is getting people, particularly on the Palestinian side to accept this position rather than seeking to drive Israelis into the sea.

Coupled to this, I have always supported the state of Israel. Its energy, alchemy (turning desert into a homeland) and its ability to defend itself like a cornered boxer have always impressed me.

So this week's action, like that in Lebanon a couple of years ago, leaves me with a heavy heart. I just can't support what they are doing right now. It is callous and unstately. Yes, I don't think we would tolerate missiles raining down on us from Northern Ireland or whatever. But, even at the height of Republican violence, we would never have done to Derry or West Belfast what is being done right now in Gaza.

I don't want to sound like a naive dove on this. I know that states have to take some tough-bastard decisions at times. I am glad I not the person actually having to make those kinds of calls. Yet I think Israel diminishes itself through this action. It is a cliche now to say this but the next generation of suicide bombers was recruited this week by the Israeli military. Indeed if I were 15, full of anger and testosterone, I am sure I would be putting myself forward there right now. Its what happens.

One's big hope, of course, is Obama. Naively perhaps as his advisers will, I am sure, want to steer him away from where Clinton, Bush and so many others have failed. Obama will, as is his gift, be able to see both sides. But even he cannot force others to do this. This is a war over land, religion and between two ancient tribes. And it is long from being over.

Tuesday, January 6, 2009

The Good Life?

I am softening my return to the CEO-cockpit with a couple of WFH (work from home)days.

What is striking about these days is just how productive they actually are. No interuptions (except the odd baby crawling in), no travel, no meetings or chit-chat. If you start at 8.30am, you can stop at 6pm confident that you've done two days at the office in one.

My interest in WFH is growing. My consultant friends say they do 3-4 days at home and perhaps a day out with clients. Once the client trusts you, they are happy for you to WFH. Consultants love WFH because, of course, they hate `dead time' - driving, big meetings etc.

My recent house-move has made working fom that bit better. The new place is set in woodland and opens out onto thousands of acres of farmland, criss-crossed by seldom-used footpaths. Runners' heaven. In the morning, I watch the sun rise over the great cedars in the park. From my desk I look out at ancient woodland that goes back over two hundred years and will survive even my own children's lifetimes.

Being `in nature' in the way we are now has an interesting effect not only on your mind (I am convinced trees are calming) but also on your outlook. Why be barrelling along on train to London each day when you can be spending the same time on a pre-breakfast run?

What can make you feel richer than the falling of winter sunlight on the evergreen leaves an ivy? Since moving here in December, I can honestly say I have never felt happier in a place.

I realise that my bliss is soon to be shattered. Next week I will be on the train like everyone else, starting early, finishing late and leaving myself very little spare.

Which makes me wonder whether or not my consultant friend might, after all, have it sorted?