Saturday, February 25, 2012

Vain is Not the Same as Bad: Why we should think again about Emma Harrison

I could not help but notice the almost universal schaudenfraude that greeted the demise this week of Emma Harrison. On one level I enjoyed it too. Her particular brand of icky self-promotion isn't pleasant. She is clearly self-obsessed. As one of her colleagues commented, she sought publicity 'like a burning aircraft seeks the ground'.

But I regret her demise. Why? Three reasons. Firstly, while I don't care much for her style, she spent 20 years of her life building a successful company from nothing. Anyone who's set up a company knows how bloody difficult it is to get things right. And growing companies is, well, massively complex. Show me someone who has done it without some massive f--k-ups on the way and I'll give you a free holiday. Yes, she's made money, but she's taken some risks, employed a lot of people and found a lot of people jobs. All on a scale few of us will ever achieve. If you'd done all of that, you'd feel like you deserved a lot of money.

Secondly, I don't think, in light of what actually appears to have happened, she needed to go. Harrison's company, which employs thousands, had, it is being alleged, a few people on the thieve. They no longer work there. The police are looking into it. It looks fairly clear, unless I am missing something, that this was limited to a few hands. Similar things to those being investigated at A4E actually happened a few years ago in a charity I worked for. A couple of people took the charity for tens of thousands. They were arrested, banged-up, end-of. Checks were lax, management took a bollocking, life went on. It happens every day. Quite why Harrison felt the need to resign I don't know, unless there's something deeper we're all about to find out about. My sense is that she panicked. Now it looks a lot worse than it probably is: A4E is now ' troubled' and EH has left because of 'fraud'. Whoever is advising her is not doing very well.

Thirdly, and finally, there seems to be a whiff of misogyny in all of this. I saw it in the case of Andrea Hill, the former CEO of Suffolk County Council. She seemed fair-game, partly because she was a woman. It is hard to imagine there being such a furore over A4E if some greying old bloke had set it up. Indeed, plenty of such people have set up public service firms, such Rod Aldridge of Capita, and are now lionised by the establishment, rightly in some cases. We seem to have it in for women of a certain type, particular ones who get above themselves a bit, like Harrison, and Hill did, at times. We're very unforgiving.

Of course, were A4E beyond reproach as a company, I am sure things would have been easier this week. Were it not the case that one hears quite a few not-so-nice things about the way they do things, there may well have been more people rushing to her defence. But what bothers me more is that, without a lot of reflection, a lot of intelligent people have defaulted into a blind condemnation of Harrison, her company and the role of other sectors in public service provision.

This is wrong. Being vain and irritating is not the same thing as being bad. Harrison should have stayed put at A4E and Cameron should have encouraged her to keep her post in Government. Her going does not make Britain a better place.

Wednesday, February 22, 2012

Caught in the Middle

Last week, the courts prevented a long-planned social enterprise from being created in Gloucestershire. The protaganist here wasn't Unison or the BMA but a 68 year old bloke who believed that such services ought to be kept in the NHS - and open to NHS providers to compete for.

Ahead of a verdict, the social enterprise has been pulled. Game over.

The net result of this will, of course, be a procurement exercise, the outcome of which might be well be not an NHS provider but a private sector one. This gentleman may rue the day he successfully stopped a social enterprise in its tracks.

So what does this mean for social enterprise and mutuals in public services?

It definitely brings EU competition law clearly into the frame when NHS bodies and Councils are looking at spin-outs. Competition law states fairly clearly that where there is a market for services - even when these are social or healthcare services - there should be open competition. Exception can be granted - but only where there is a clearly evidenced, higher reason for this.

However, there are ways to address this which also give nascent social enterprises a chance before facing the competitive market. Firstly, they can operate as independent business units in 'shadow' ahead of formal procurement - so that a trading record can be established.

Secondly, there is often not a straightforward procurement solution to the complex problems that a potential social enterprise is being set up to address. Councils in particular do often want to see a key local player in place which addresses a host of challenges, some of which do not easily lend themselves to procurement..

Thirdly, an NHS body or Council can set up a joint venture with the competition law satisfied by the process involved in selecting a JV partner. We haven't seen much of this so far, but I suspect it will become more common as procurement becomes more of a roadblock.

Saturday, February 18, 2012

Why the Tories are half-right about making it easier to sack mediocre people

A few months ago a little known venture-capitalist called Adrian Beecroft wrote a report for the Prime Minister, setting out a new proposal which would make it far, far easier for firms to fire people. It would allow any firm to release any person it chose, with compensation if, in the firm's view, things weren't working out. No hearing, disciplinaries, five-point plans - just a end to employment.

Of course, this didn't go down well with anyone, including the Lib Dems who, rightly, saw it as tipping the scales too far the othr way, creating a nervy workforce terrified of getting the wrong side of the person above them at work. Put into practice, Beecroft would, almost certainly, have led to abuses that would exceed those currently imposed by the army of people who use the current law to persecute their employer.

What we need, therefore, is something that runs down the middle. Here is where personal experience comes in. As an employer, I have been on the wrong side of more than one Employment Tribunal. Several in fact. Most are 'settled' meaning, that you do what is necessary to make the drain on your time presented by such matters disappear.

I have always been amazed at how many people can sign away the right to have their grievance properly looked at in a quasi-judicial setting when a fairly small cheque is waved under their nose. Friends I know who have not done this and gone all the way nearly always win - but feel like they have lost, such is the cost in time and lawyer bills.

In short, the system is indeed broken and needs to be reformed, urgently. Ask any charity CEO (not normally the most right-wing of people) what they think over a glass of wine and, to a person you'll get the same answer: the system is a joke, it deters employment, it causes massive stress and cost and it rights few wrongs.

After another few glasses, you'll also get plenty of sarcasm about the self-infated judges (there are three for each of these hearings) who are paid God-knows-what by the taxpayer for poring over what are mostly 'he said, she said' issues, that, by a freak of legal nature, have ended up in a courtroom.

So what needs to be done? Three things. Firstly, there needs to be a place for 'safe conversations' which allow the employers to say 'This ain't working and we would like to discuss a possible exit for you' without this leading straight to a solicitor's letter.
At the moment, it is very hard to have a normal conversation without your words being thrown back at you as evidence of 'constructive dismissal'.

Secondly, every application for a Tribunal should first be put through ACAS before it is allowed to go to a Tribunal. This allows a mediated settlement rather than the well-remunerated confrontations so beloved of the legal profession. Finally, every person who wants to initiate a Tribunal should personally put up a returnable deposit which is lost if they lose. This will, I can guarantee, get rid of most vexacatous claims in one go, including many of those I have had the displeasure of dealing with.

Sound familiar? Well, that, by and large, seems to be the shape of what's coming out of the Coalition following the shock and awe caused by Beecroft earlier in the year. I can't say enough about what a good idea this is. It will be good for jobs. Small employer are terrified of Employment Law as it stands. One nasty incident can ruin a business. You really think carefully about taking people on as a small firm. This can't be right.

Plus the spike in claims in recent years is fuelled by a 'No Win No Fee' industry which is based on exploitation of bad law by bad law firms. As anyone who knows me well is aware, I am not the biggest fan of the legal establishment. With notable exceptions (and there are MANY, including good friends of mine), they are, I find, non-value-adding and venal.

Because they are a 'profession', many lawyers seem to believe they have a right to charge five to ten times what everyone else does for what is, a lot of the time, an administrative job. The reputation of law has, like that of politics, taken a dive precisely because of how they have responded to opportunities like Employment Law.

This will soon change. Up and down the land people will cheer. Charity CEOs, small business people, colleagues of underperforming staff, HR managers, operations manager. Everyone, in fact, except the drongos who bring the majority of claims and their lawyers.

Saturday, February 11, 2012

How localism can solve the health and social care crisis in the UK

If you're reading the newspapers, you'll be hearing both about the planned Lansley reforms and a parallel discussion about the need to integrate health and social care funding in response to what Government Minister Paul Burstow admits is a 'timebomb'.

But the two are seldom discussed together, for some reason, probably because most journalists struggle to get a full handle. Health and social care are currently separately provided for in law. You get health care for free while you normally pay for social care. Councils determine who gets what in social care and carries statutory responsibility.

In some areas, for example, Bath, NE Lincs, Torbay, Swindon and a few others, health and social care commissioning has, for some time, been placed under one body, normally the Council with a Joint Director of Social Care / CEO of the PCT. Where Council and PCT areas are contiguous this makes a lot of sense because it means that those spending the health and social care pound can see the whole picture and are not slavishly wedded to one or other worldview, health or social care.

Integration at this level also means that local democracy gets a look in. For however flawed and unrepresentative most councils are (hardly anyone young or black, essentially) they are voted in, unlike most health bodies which, while governed by a board, a not particularly accountable to the community, in reality

So why not make this the national policy? Rather than trying to delegate budgets to GP groups, which are, by now evolving into mini PCTs, and also having rump-PCT clusters running alongside (and I won't get into Commissioning Support Groups) - why don't we take localism to its logical conclusion and do the following:

1. Give Councils statutory responsibility for health and social care in their jurisdiction.
2. Make the Health and Well-Being Board being set up anyway by Councils the delegated bodies which oversee the commissioning and procurement of local health and social care. Pool the budget so that there is no distinction between health and social care spend.
3. Set up all staturory health and social care providers as either independent local healthcare trusts or social enterprises which have contractual relationships with the council.
4. Let each local council and its Health and Well-Being board shape local priorities and allow the council to be accountable for health and social care outcomes in its area.
5. Allow the centre to retain powers of intervention if a council is failing it its statutory duties.

The net effect of all of this will be to force local Councils to grab the nettle of the democraphic pressure and problems caused by the imbalance of acute and primary investment in their areas. Decisions will need to be made around what the local health service will and won't fund and where self-payment has to play a role.

At the moment, we're in the ridiculous situation whereby a person with quite profound social care needs who has some means to pay has to practically bankrupt themselves to get the support they need while another person who wants a sex change can get one done on the NHS. Merging of budgets allows some balance to be put into the question of where funding of different needs is placed.

Of course this wouldn't be a perfect system. The funding would still need to come mainly from central government and even in the event of a more localised system of taxation there would be a need for transfers from Surrey to Sunderland. That's what central government, really, should be mainly about doing. Plus the same political nonsense would happen at local level as you see nationally.

But this system, where health and social care is integrated at commissioning level and placed under LA control is, compared to what we have now, quite a sensible approach and places central government in the role of overseer, rather than controller. Would this still be a national health service. Yes, but also a local health and social care service too, with stronger local accountability and scope for appropriate local variation.

Thursday, February 9, 2012

How To Murder a Mutual

A real, living example of staff seeking to form up into a mutual met an early death this week as a group of librarians in a London borough failed to get through a PQQ stage on a tender process. This was not, they were told, because they were crap or didn’t know anything about running libraries, nor that they didn’t have any business sense. No, it was because they didn’t have a balance sheet – or cash-in-bank or bricks-and-mortar – to use everyday language.

They are appealing – and good luck to them. I have also directed to them to Cabinet Office who are investigating what the barriers are to staff groups seeking to ‘step out’ into a mutual or social enterprise.

The problems faced by these librarians isn’t particular to that borough which, I am sure, is an otherwise shining example of good practice and innovative partnership working. It’s everywhere. If it hadn’t been the PQQ that trip-wired them it would have been the local unions or politicians or finance people who tend to prefer things to be either in-house or contracted out – nothing more complicated please.

Well, not everywhere – or we wouldn’t have a business! I am on the train home from one council which will, we expect, shortly see two new staff led businesses in the conservation and work-prep sectors. Yesterday I was with a council where £4m of social care services are soon to ‘step out’ into a new CIC.

Everywhere I go, there are people wanting to do this. People who recognize that the old public sector model is bust and something else that isn’t public or private sector but social-sector is the right way to go. Saving money, improving services, raising motivation and productivity.

That’s why we are doing this. It’s early in the day, but the public sector up and down the land – faced with 30% cuts over 2-3 years has to find new delivery models. They exist – and the independent social business spin out is one of them.

If only the library-commissioners in that particular borough knew it!

Sunday, February 5, 2012

What can we learn from the spin-out leaders?

One of the privileges of my work with Stepping Out is the exposure it gives me to a wide variety of leaders. This has been instructive. Spin-outs almost always rely on charismatic leaders to get them off the ground. These people are invariably viewed as 'mavericks' and are seldom popular figures in their organisations. And few of them, at least early on, have the technical skills to organise a spin-out nor the political skills to play the committee game in their organisation.

But what they lack in business or political finesse, they tend to make up for in drive, tenacity and inspiration to others. Which is fortunate because this is probably what matters a lot more, certainly early on. Where we often come in is adding the skill-sets and finding the operators who can champion the mavericks' cause with politicians and committees.

What can be learned about these types of leader? I think they underline to me the vital need for all leaders to be durable, passionate and communicative. The very best ones can also do the technical and political stuff too, but I would say that these skills become more important at later stage in the life of an organisation.

The others - the softer skills - have, I think, taken on a bigger order of importance in the 20 years I have been in the workforce, as society has become more communication-focussed. The 'feminisation' of management culture also has had a welcome role to play. A top leader used to be what Michael Lewis in 'The Big Short' memorably called a 'Big Swinging Dick' - an alpha male who could bully and beat his way to success.

Now such people are viewed as throwbacks and any aspiring leader is evaluated far more in terms of how they involve and include others, how well they create a productive and positive culture and how they conduct themselves in the day to day relationships.

It is a trend I think I welcome.

Should the Health and Social Care Bill be Scrapped?

The papers are full of speculation about the future of Lansley's bill. Many Tory MPs are now privately concerned, Lib Dem peers and now working with Labour Lords to amend the bill to destruction and Lansley himself is looking increasingly isolated as the professions rally against him.

In more normal political times this would all be insignificant. But we're not. No single party has a majority and Parliament, since 2010, has enjoyed something of a revival as the 'cockpit of the nation'. You just can't ram things through anymore. Listen - or face rebellion is is the message from a Commons packed with the assertive new 2010 intake..

In some ways, the Bill is alreadyhalfway to oblivion. So far 136 amendments have been accepted from hundreds table. The net effect of this has been to reshape the Bill substantially from Lansley's original intentions. Many more amendments and the whole thing will be sunk by its own complexity and contradictions.

Although there is a lot of angles to this debate, it seems to boil down, in our current discourse, to one big issue - do private operators have a major role to play in the future NHS - or does this remain a principally state-funded, state-directed service? Where you stand on this question is a pretty good predictor of whether you basically support or oppose this Bill.

And that is where Lansley finds himself at the wrong end of the political argument. Most Britons instinctively oppose the idea of profit-making companies running the NHS. They fear its implications for access to free healthcare. For most people, it just seems instinctively 'wrong' that private companies take over the NHS.

Where Lansley has failed, I think, is to side-step the professions by successfully casting his reforms in terms of the real challenges facing healthcare in this country. In short, we need more primary and community healthcare - and fewer, better major hospitals. Anything worth of the name NHS needs to see this movement over time.

We also need to have an honest conversation about what the NHS is for, today and tomorrow, and what we should ask people to fund themselves. There is mounting evidence that the NHS will have to narrow its offer to a deliverable 'core' with more being paid for by ourselves with a logical consequence that more non-core treatments will have to be provided by other means, including the private market.

There is an urgent need for a long-term cross-party consensus about the future of both health and social care in this country if we are to avoid a major crisis within 20 years. The debate at the moment is infantile. 'Three months to save the NHS' is another facile piece of nonsense from Miliband, E.. The NHS today is a cruise-liner headed for the rocks within 5 years. The question really is how to change it over the next decade, reduce its costs and improve its offer. The left (including many Lib Dems) think this is all about planning and co-ordination. The right think it is all about ultra-devolution and introducing markets and private providers with the state well out of the way.

The sensible centre (and most of the non-political community) recognise that you need bits of both. High level planning is needed over the long term around the broad allocation of the health pound in our taxes. As a country, we need to agree what our response to our well-understood demographic and health challenges should be. This is the 'national conversation' we should be having, led by our political class. Then it is Government's job to set the framework. This is not the same thing as the 'co-ordination' offered during the Labour years - which led to the NHS being micro-managed like a nationalised industry.

Likewise we need to sensibly open up the non-core sectors of our healthcare needs to other sector. This has, of course, already happened in social care, where a diversity of providers has moved quality up and price down over the years - with notable exceptions of course. But this has to be done with care. The 'cherry picking' argument is a real one and cannot be ignored. We need to use the private sector where it can drive up standards - but keep an overview and retain powers at local level to hold the private sector in check where this isn't working for the common good..

Where do social enterprise providers fit into all of this? My fear is that they get lumped into the 'private sector' bucket and, if the Lansley Bill dies - which I see a 25% chance of happening - they get frozen out of the new NHS. There is, of course, a chance that they will be viewed as an alternative to privatisation, but the health social enterprises do not yet have the political clout to get this point heard in the current decibels.

If the Lansley Bill goes through, in a heavily amended form, it's also hard to see how things will work from here. The emerging picture is of a more complex commissioning environment than now and a very messy period of overall transition. A lot of the new structure has kicked off already. Clinical Commissioning Groups are already operating and the PCTs and SHA's all but gone - or altered to account for the bill. Very tough now to turn back the clock.

My feeling is that if politicians were up to a decent quality of debate on healthcare, I would want to see the Lansley Bill scrapped and we go back to the drawing board. But so poor and ill-informed is most of it that I fear this would throw us backwards into Frank Dobson/Andy Burnham era nationalisation with consequences I dare not contemplate. So overall, I would rather us make do with an amended bill.

However, Cameron should sack Lansley in the reshuffle and bring in a pragmatist with the operational head to see this through. So no, keep the bill - but sack this dreadful Minister.

Friday, February 3, 2012

Talk I gave at yesterday's Guardian Public Services Summit

"I think my value here today is that I have a few different lines of sight on the issues in hand. I am probably best known as a social entrepreneur and my work in the public sector developing spin-out ventures. I am also a chair of a large national charity and, on top of this a county councilor in Suffolk. This all gives me a distinct vantage point on our sector.

Today I am going to talk about what’s good, what’s bad and what’s ahead.


Let’s get the bad out of the way first. This is a very tough year for the charity and SE sector. If the public sector thinks its had a hard time, come to see us. Third Sector magazine told last week of 70,000 job losses in 2011 on a workforce of less than a million. Both grants and contracts are under pressure. Grants from Councils are being hit hard – 40% in Liverpool last year and 35% in Notts this year, pending a review by CLG.

This means that the sector is caught in the headlights, preoccupied with short-term survival and incapable often to get together the responses needed for longer term success. Whatever the public sector might be looking for from these sectors just now, it has found a sector that has been at its most introspective and least innovative for some time. And this is at a time when the business models of many charities most need to change to adapt to the new need-contours in our society.

I see this myself both as a Councillor. From the Council we see a preoccupied third sector that now, less than ever, can get itself organized well enough to become a strategic partner.

As a Chair, of VA I see our particular survival battles getting in the way of renewing a business model well behind the curve in terms of what commissioners will now pay for. We’re still living in 2006 while they are thinking about 2018, and the financial constraints then.

Other bad news. It is clear that Big Society is no longer on everyone’s lips and that the attention of this Government has shifted to the delivery of economic recovery. Public sector reform for the sector has been a distinctly mixed bag. The Open Public Services White Paper – which spoke of diversity of supply – was a damp squib.

And the biggest story of the year has been the abject failure of SEs and charities to make the Work Programme successful as sub-contractors to private ‘prime’ contractors. According to TS magazine this week, many are experiencing cash flow problems and considering withdrawal.

So what’s good. Well, plenty, fortunately. The recession is having the effect of winnowing out some of the less effective and forcing sensible merger and consolidation in places. This is long overdue. We’re also seeing some innovative responses to the new world we are in. Look for example at what Scope are doing – raising a bond for several million pounds and using this to develop their retail operation. Turning the recession to their distinct advantage.

We’re also seeing charities making their presence felt in the campaigning field, a sure sign that the sector as a voice for the vulnerable is alive and well in 2012.

Further to this, we are seeing the inexorable rise of the social enterprise agenda. This is expressed in increasing number of public sector spin-outs – which marry the public service ethos with a commercial mindset. We also have the Right to Challenge and the Social Value Bill, both of which create significant opportunities for social enterprises to play a greater role in the provision of public services. Last but not least, we are seeing more funding mechanisms like Big Society Capital being created which are designed to provide access to funds for scaling successful social solutions.

So, finally, what of the future? Short-term, I think it’s going to continue to be very slow-going for these sectors. So many organizations are in turnaround that it’s going to take a long time for many of them to re-find their originality and innovation. However, after this I am more optimistic. Why? Because there is I believe a decent strategic space opening up for SEs and charities in between traditional public sector provision and a private sector which is no longer held in unquestioning regard. With better capitalization and better commissioning there is an opening field.

Which brings me to my final point – about commissioning. One goes to events where all people talk about is how poor commissioning is and how it needs to change so that SEs and charities can change. They are right, but only to a point. These organizations are not always easy to commission and can be very wooly about deliverables.

Both sides need to change. At the moment, I think that commissioning and procurement are too much like supermarket shopping – everything has to be neat, tidy and super-planned by volume providers. What we need, I think, is something a bit more like a souk, or bazaar, where there’s a wider variety of characters, some weird and wonderful products and some very interesting conversations on price and quality, a more open place, a more fluid one.

But a richness and diversity you will seldom find down at Tesco. I think that is one direction for commissioning and procurement in the future we’d be advised to create.

I think that’s my time up – thank you for listening"

Thursday, February 2, 2012

The Politics of Spinning Out - my piece from the Guardian this week

Much of the talk about public service mutuals tends to imply it is all about happy groups of professionals unhooking themselves from the chains of NHS or council bureaucracy and running happily into the cornfields.

Of course, it's not like that. Stepping out of the public sector is political with a capital P. So far, I have never seen a spinout that hasn't required heavyweight backing either from the top pinnacle of the local bureaucracy or senior elected members.

Put simply, if you, as a public manager, want to "step out", you've not only got to do the numbers, you've also got to do the politics.

So where do you start? In short, politicians, or very senior executives, need three things. Firstly, they need to know if this fits in with the general tenor of where they see things going more widely in the organisation. "Does this fit with our larger strategy?" will be question number one. Politically, it may, in which case, you could be fast-tracked. Or, it may not – and you'll be received more coolly.

Councils, whether Tory, Labour or Lib Dem, are increasingly viewing social enterprise as a positive alternative to out and out privatisation, particularly in services where profit-maximising operators might not go down well with voters. This works particularly well where a social enterprise will clearly reduce the need for immediate cuts in front-line services or an increase in rates. This is where politicians' antennae are most clearly tuned. Give them a way out of either and you're half way there.

Secondly, they want to know if the numbers add up. Every politician's nightmare is something blowing up on their watch – or going bust. They want to be sure that if a spin-out goes ahead, it will be successful. In addition, politicians want to be sure that in letting your ship go free, they are not left with a gaping hole in their own. You therefore need to think about how what you're doing might affect the council's wider position.

No area is more important here than the back-office functions – HR, IT, finance, payroll. A spin-out will ideally want to get these things from providers outside the council because there are great deals to be had in the market. But the council doesn't want to be left with a big overhead that it now needs either to shrink down or spread over a diminishing base. The logical thing – and what we see happening a lot – is that the spin-out takes the back-office services from the council on a tapering basis as part of the deal. It's not ideal – but it gets over a lot of the immediate financial problems that a spin-out, especially a large one, might pose to the council.

Thirdly, politicians and senior managers need to know that they can influence the new body. For councillors and top executives, who are used to directly managing services, a spin-out can present a big operational and financial threat. They can no longer just recover a deficit elsewhere by plundering your budget. Nor, if they are no longer in charge, can they, in the event of a bad headline, tell voters they are putting a rocket under you! Again, the answer here lies in giving them a place at the table and moving the relationship from one governed by command and control to one where influence is exercised through a contract.

My main advice to public managers is to start talking to both politicians and senior managers early in the game. It can save you a lot of time and generate important early support. Keeping them close and with you makes them feel involved and gives them "buy-in". As well as being a spin-out leader, you have also to act as a change manager in your organisation, keeping a coalition of people with you from the top right through to the front-line.