Saturday, May 4, 2013

Ukippered: What do these Elections Mean for Local Government?

Yesterday was my last day as a County Councillor. I was replaced by a Conservative who beat a former Tory Independent by a whisker with  UKIP also hot in pursuit.  

But what do these elections tell us about the state of local government?  

It is clear that the success of so many 'paper candidates' from UKIP that local issues still do not have much traction in local government elections.

'State of the nation' is the way they tend to be treated by voters and pundits alike.

Twas ever thus, you may say.   But will it always be so?  Three factors suggest otherwise.

Firstly, local government is about to hit some very difficult years.   It's going to be like the family on the breadline that gets a huge electric bill at just the same time as Mum loses her part time job.   

Such are the pressures on social care and central government cuts that something big will have to give.   

As the New Local Government Network stated in their new report this week, watch what happens to leisure centres, parks, theatres - all things Councils like to do - but are not compelled to do in law.

The second factor that may bode change is that local government is gradually developing its own income base.

Less and less of its money is coming from the centre and, over time, Councils will be more and more free to do their own thing.   

Local government will, as time goes on, look less and less like simply an executive arm of the centre.   

This will make the choice of who runs the council look like a more important decision, as it is in most other advanced democracies.

Thirdly, although I don't think UKIP have any real solutions, the presence of UKIP will wake up the parties at local government level who have, for many years, been asleep at the wheel.  

In many areas, the complacency of Councillors has led to a situation ripe for the far-right (and remember this is what UKIP, in effect, are) to come in with a powerful message for any established politicians.   

If this doesn't ginger up the local political scene in many towns and lead to more engagement with the populace, I will be very surprised.

So, the election of UKIP isn't all bad news. I look forward to seeing them trying to grapple with the financial challenges of Councils and the day to day reality of making neighbourhoods better places to live.

I suspect this will take a bit of the edge of their current self-belief.   Running things isn't easy.

On a personal level it was a relief, having stepped down before the election, to see my seat taken by a sensible, capable young woman with a great track record in the community and in business rather than the near-alternatives.   

Democracy is still, however stagnant it has become in the UK, a wonderful thing.   We can still get the buggers out here and the will of the people still counts for something.  

We must never take this for granted.

Saturday, April 20, 2013

True Enemies - or Necessary Allies? Unions and Social Enterprise

This week 'Union News' published a story about a flagship social enterprise spin-out called Care Plus which operates health and social care services in NE Lincs.

The story highlighted the possibility that staff recently transferred out the NHS and Council might be made redundant and re-hired by Care Plus on new contracts.

It also spoke of the 'financial chaos' engulfing Care Plus (the organisation has to find big savings) and compared the situation in NE Lincs unfavourably to that in neighbouring North Lincolnshire where services have remained in the NHS.

The article wrapped up with a demand that all of these services be put back under NHS and local authority control.

At the moment, I don't know enough about the particulars of the situation in Care Plus but my understanding is they have tried to change terms and conditions for staff and, in doing so, have sought to deal directly with their own workforce (who are also owners of the company) - rather than deal mainly with the unions.

There is a some logic to the Care Plus position.  The members of the company are also the staff.   It therefore makes sense for the conversation to be one that takes place between owners rather than between 'bosses and workers'.

However, the situation is complicated by the fact that many staff are members of trade unions too.  Furthemore, there are also long-established practices in these services, which have seen unions being involved early, routinely and directly in talks around changes to terms and conditions.

Indeed, the prospect of being defined-out of the equation is, probably, one of trade unions' biggest fears about staff-owned spin outs.

There is a risk, in a world where everyone is an 'owner', of a trade union appearing superfluous.

And, on top of this, if a newly-minted, social enterprise is, in its first two years, changing terms and conditions, the story, from union eyes, looks every bit as bad as any other piece of privatisation.

As someone working in this mix, trying to support new social enterprises come out of the public sector, I feel pretty frustrated by the polarised situation between those seeking to set up co-ops and social businesses and the trade unions.

Particularly when the overall story of what is being achieved by organisations like Care Plus is so good.

The debate, it looks to me, has become like two sets of supporters on the terraces.  One side cries out out how much what they are doing is just the kind of thing trade-unions should be supporting - employee ownership, socially motivated enterprises, co-operative ventures.

The other replies by shouting back - 'Privatisation - you're just as a bad as all the rest'.

Obviously, I come to the debate not as a neutral.  I happen to believe that the public realm in this country can only be protected if we embrace new forms of public service delivery that go beyond traditional public services.

I also admire the leadership and staff at Care Plus for all they have achieved for the people of NE Lincs. They are an imaginative, well-motivated and inspiring set of people.

Care Plus, and those like them show us that the only way to address the national-emergency in social care (for that is what it is becoming)is to deliver benefits in far closer partnership with communities and their own staff.

My fear is that if Councils and the NHS don't do this now, we will lose services and that very large, powerful private sector companies will take an ever-increasing role in public service delivery.

Meanwhile, the position of trade unions, I think, is to see social enterprise as a kind of soft-focus ploy to undermine public services and the security of the people they represent.

It is easy to see where the unions are coming from.  The public sector is, in many ways, the only place left in the UK where terms and conditions of staff are relatively good.

History has taught the unions that once things are moved out of the public sector, things get worst a lot more quickly for the staff.

Can these two tribes be brought together?

In truth, I don't know.  At the moment, there doesn't appear to be much going on in terms of conversation between the social enterprise movement and our biggest unions.

We seem to be avoiding each other (again this may be just a perception) and shouting from the terraces.

My own view is that there is potential to find a shared-cause between emergent social enterprises and the trade unions.  

This is because there is much common ground:

1.  A shared concern for staff empowerment and the well-being of workers

2.  A philosophical agreement about the idea of staff owning and controlling their companies

3.  A genuine social concern as a main motivating force.

4. A belief in the public service ethos.

5. A belief that public services should not be run for corporate profit.

But, there are also big disagreements.

1.  The State. Social enterprises tend to believe that the postwar public services settlement in the UK is now history and new types of organisations, with new offerings, are needed while unions still believe in public sector delivery.

2.  Ts&Cs.   Social enterprises do sometimes need, over time, to realign terms and conditions to reflect performance of the organisation in its market while trade unions, naturally, wish to protect terms and conditions as they are now.

3.  Outsourcing. Social enterprises insist that employee-run is not the same a privately-run while trade unions tend to see anything that is operating outside the public sector as 'outsourced' and 'privatised'.

So what could any agreement between the Two Tribes look like?

In my view, there needs to be 'give' on both sides.

On on hand social enterprises need to guarantee the role of trade unions as a legitimate part of life in the new world.

Although a co-op or social enterprise may be owned by its staff,  it doesn't necessarily follow that conversations need only take place between 'owners' and  the need for union representation of  staff  by unions is no longer really required.

Even in a well-run mutual, the interests of managers and front-line staff may diverge - and we shouldn't deny that.

Furthermore, there need to be assurances to trade unions that all will be done to ensure that they are included fully in the operation of these businesses.  It happens on the continent and there is no reason it should not happen here.

Finally, the social enterprise sector needs to recognise that the unions have a job to do and have taken lesson from experience that should not be lightly set aside.

On the other, trade unions, I believe, need to re-evaluate the social enterprise route in terms of its alternatives as the UK enters its next round of public austerity.

We have to get prepared, together, for the possibility that i very few services will be delivered directly by the state within a decade, particularly if growth does not materialise.

If this happens, the terms of the debate will shift onto what is the best alternative to direct public sector deliver.

Compared to the prospect of mass-privatisation to firms with dubious motives and a bad track-record, social enterprise may well look more attractive, particularly if this can also maintain a wider range of services.

Under such a scenario, one could easily see the unions and social enterprise working together, as sometimes happens now at a very local level, where there is trust and mutual understanding.

But t the moment, it feels like we are a million miles away from an agreement.  I think the Two Tribes need to start talking, at the very top level and see if we can find any common ground before, for both sides, it is too late.

Monday, April 8, 2013

Is local government ever going to embrace social enterprise?

Will there be some kind of tipping point for social enterprise in UK local government?  So far we are in the Innovator / Early Adapter stage with many watching to see what happens in the first wave. 

But my view, which is of course not a disinterested one, is that we will get there.

Why?  Because of three related crisis': financial, services and political.


The knock-on of austerity for the public realm in the UK is not yet apparent, except for a very small minority of people at the wrong end of welfare or social care cuts.

For the rest of us it is still an abstraction.

But this will change as local authorities face up to an existential challenge from 2014-18.  The hard facts are that English local councils will have lost up to 40% of their income between 2010 and 2015.     

Many Councils, among them Newcastle upon Tyne, will, by 2020, only have enough in the kitty to fund statutory social care costs, leaving nothing for other things.  A taste of things-to-come in Newcastle is the abolition of all Council funding for arts and culture in the city from this April.  It is also closing a number of libraries and, probably, the City Pool, the main swimming baths. 

Faced with this scale of challenge, Councils are really having to think hard about how to respond beyond finding efficiencies, selective closures and privatisation of remaining 'in-house' services.

Councils now realise that public money isn't the only ingredient in a successful public realm.   Combined with community endevour, it can be a potent factor in keeping public services in business.   

Let's look at Newcastle again.  Twenty years ago, Jesmond Pool in Newcastle became a social enterprise, after a lot of argy-bargy about privatisation.   It is run by local people, for local people. Today, it is in a far better position to survive than other neighbourhood pools, thanks to the low level of dependency it has on local authority funding. 

  This might be harder to do, say, in Elswick, at the opposite end of the social scale to Jesmond, but surely it is right to look at this possibility carefully before ever closing facilities.

While a surprising number of Councils still seem to be asleep at the wheel, there is a dawning realisation that if local councils let the car drive off the cliff then voters faced with closed parks, dirty streets and pot-holed streets will punish them at the ballot box.  

This isn't to mention the negative effects on an area's image that a negative spiral will create.  Nightmare scenarios in places like Detroit in the US privately haunt Leaders in parts of the North, especially, where there is a real risk of a point-of-no-return being reached if decline is not arrested.  

In this environment, again, it is occurring to many in Councils that the role of the Council as core provider is probably over and that new, more dynamic, more community-engaged vehicles are set up to support people and places to operate as they should.   

Devolution of budgets to community level (now happening in many places) is on important aspect of this.  So too is social enterprise, be this a community or charity takeover of a public service, or a spin-out from public services. 


If Councils need to start closing the services that the majority see and use they know they will be in trouble at the polls, sooner or later. 

While the parcel can be passed to central government for a while, as has happened in Newcastle, this won't last forever.  People get angry when the streets are dirty and their local library isn't there any more. 

The most enterprising councils understand that a new settlement around Discretionary services ups essential if local services are to be maintained.  So in Wycombe, their woodlands services were moved into a mutual this year (with our help) because the alternative was probably a load of grief about the demise of the local environment. 

In this context, social enterprise looks sensible politically.


The 1945 settlement basically gave a state-backed guarantee to all citizens around social protection.  Nearly 70 years on, the 'Beveridge Settlement' is no longer properly deliverable by appointed local state bodies like Councils and the various branches of the NHS.   

This isn't just because it is unaffordable now, but also because the society it serves has become too complex to be serviced effectively by public sector bodies.  This is well documented in other places (see the 2020 Commission on Public Services led by the RSA) but the reason to mention it here is that Councils now have to face this full-on because they have no money.  

This is an opportunity, disguised as a problem, in my view.  Social enterprise is part of a new settlement which says that we need to help people to look after themselves and each other with the state in a partner rather than a parent role.  Large, single providers who are seen by citizens as 'responsible' do not fit into this world.  As Councils try to forge a new kind of relationship with citizens, social enterprise comes more clearly into view as a means of delivering public services.

What, if anything, does this add to up?  Taken together, the financial crisis, the service crisis and the political crisis facing local government appears to be opening minds.  

Councils' first instinct is to set up their own ventures - which is very easy and quick to do - but the challenge, from my own very first hand experience, is that such ventures tend to a bit like teenagers who never leave home.  They look and occasionally act like grown-ups, but the relationship remains one of dependency. 

The good thing about social enterprise is that the child does leave home and forge a healthier relationship with its parent based on respect and appropriate distance.  There is still a bond, but a very different one to when everyone was under one roof.

This more closely mirrors the grown up relationships with their citizens to which Councils now aspire.  Which is why, although it's still early in the day, social enterprise, I think, has a big future in local government services. 

Sunday, March 31, 2013

Why are most social entrepreneurs very young or very old?

Have you ever noticed that most social entrepreneurs are either very young or relatively old?  Not that many in the middle (say 35-50)?

This is because, dear reader, because you can only really afford to work in social enterprise when you are young and need very little and have no responsibilities (like me), or when you have made some money and can downshift.

I speak, of course, with myself in mind.  From the age of 25 I led, from scratch, a social enterprise that, by my late 30s  the best part of 200 people and turned over about  £5m.  

Financially I was, by global and even UK standards, in a fortunate place.  But I was struggling to meet a big mortgage, we were down to one  income,  two small children, no savings or pension.   

When I left, at 40, I needed to borrow £25k to finance my next business.  I had no capital.

This was tough.  Here I was, successful social entrepreneur and all of that - and having to start again without a pot to pee into.  

As my millionaire pal handed me that loan, I promised myself to ensure that any future business, social or otherwise, would be fully capitalised by the one I had created earlier.  

Fortunately, I found some backing 18 months in from NESTA (for which I am eternally grateful) - but I consider myself very lucky indeed not to have found myself on the job market.

So there you have it.  Being a social entrepreneur, at least in surplus-retaining enterprises, is a luxury of the very young, the rich and the pensioned.  I hope to join the party again one day soon, but only when I can afford to.  

Of course it shouldn't be like this.  Of course it should be ok to make it financially feasible for social entrepreneurs to put their whole careers into social ventures.

But  try telling that to the sackcloth-and-ashes types you find across the charity and social enterprise sector.  

They think you are a greedy b-----d for wanting than you need to survive and would rather you bugger off than receive more in reward, however critical one might be to a business.

Nearly three years into my new venture I am, I am glad to say, doing OK.  I had paid that loan back and am now, at 43, paying into a pension and,  hold your breath, overpaying on my mortgage each month.   

Thankfully I am, through my new venture Stepping Out, also helping to create social enterprises and through our Foundation  support early grass roots ventures with 'angel' funding. 

One day I plan to return to mainstream social enterprise, like many of those who come either from the City or long corporate careers, secure enough not to have to worry about the money side of it all.  

But it isn't ideally the way it should play.  

Better never to have had to leave at all.

Sent from my iPad

Friday, March 29, 2013

Will the social investment sector back the next Mark Zuckerberg?

Only the deluded would fail to  recognise that the public and social sectors have hit some sticky limits in moving the dial on the worlds most profound social problems. 

We can, course. take heart from the rise of brand new 'disruptive'  innovators such as Teach First which, over a decade, has achieved some system-change in the UK education sector. 

Also, thanks to the likes of NESTA, Unltd, the SSE and the Shaftesbury Partnership, we  see a lot of promising stuff riding over the hill..

But let's be honest here, this is still early in the day. The social sector in the UK is remarkably stable.  Barring the odd newcomer, the  names topping  the social sector bill today are much the same as 20 years ago.  Silicon Valley - or even Roundabout - this is not!    

Indeed the next Amazon of Facebook of the social sector is probably still working out of a bedroom somewhere.  Or, even more likely, the Mark Zuckerberg of the social sector is just coming to the end of a small social entrepreneur development award and wondering where it's next investment is coming from. 

  In fact he is dreading the panel he has to meet next month.  He is over-trading massively already (trying to show his model works) and he only has nights free to work on the five year P & L and cashflow being demanded by a po-faced group of former bank staff who are now running his social investment fund.  

In truth, he hasn't a clue about his P & L, or the scale-up potential of his model.  He just knows he has something which works and that he wants to devote his next five years to showing this to be true.   

The following week he actually meets the committee, they see his rather rough-cut plans, give him a hard time about the mistakes and send him packing on the grounds that this risks being good money after bad.  Everyone feels like they have done a good job and another sector changing idea quietly dies.  

 Our Mark Zuckerberg figure, now 30 and broke, is forced to get a job as a social enterprise investment adviser (there is always funding out there for those) and the world continues to turn.

The test of when the penny really has dropped in the UK social sector will be when we understand thst ideas that change the world need more than small development programmes, banking-inspired finance and highly conditional support.   

When, I wonder, will  we understand that very large bets need to be taken on people and teams, even when there is no real surity about where it's all going? 

In my view, we are a long time out from this.  Today's social innovator has to walk a fine line between telling a good story of revenue today and a ton of jam tomorrow.   If they can't do this, they don't get through the kind of assessment processes that are too hard too early (and indeed cost more to run than the amounts they invest).

My fear is that the emerging social investment market is going the way of the banking sector..  We hear that the large injections of capital coming out through various outlets under the Big Society programme are to be 'vanilla',  

This, I perhaps naively, take to mean straightforward, low-risk, semi-bankable.  Part of me is ok with that.  Easy to access, soft , unsecured finance is a very good thing indeed, especially in a capital-starved charity market which won't otherwise borrow.

  But I also wonder where the funding for the non-vanilla, the triple-choc-mint-and banana - really risky, dial-moving stuff is ever coming from?   Nobody seems to be into that space, except possibly for NESTA, at anything like the levels required to invest in big change.  

 Angel funding, which plays such a key role in the private sector, is still eluding most of the social finance houses. 

On a very micro-level, we at Stepping Out are trying to walk our talk.  Our Foundation (which recycles some of our profit) puts almost  all of its resource behind promising people and ideas at a stage where nobody really has a clue where it could all go. 

  If I ever have any serious money I hope I will continue to invest this way, before the business plan and all the suited, booted stuff about projections, revenue models and all of that. 

 There is a time for this, sure, but we often impose it way before an idea is really ready and, as a result, I suspect we not only miss a lot of good stuff but also tie long-burn innovators into short-term cycles that hold back their impact.

The test of our emerging social finance sector will be simple : will they back  the next Mark Zuckerberg?

Sent from my iPad

Saturday, March 23, 2013

Why Social Enterprise is the Future in Public Services

Social enterprise is the only real future for public services.  The challenge at the moment is that hardly anyone in the public sector understands this yet.    Some cling to the idea of an improved public sector offer, or quasi-business conducted by arms-length companies.  Others cleave to the private sector, as though that were the only way to delivery anything properly.    However, for a small minority, the penny has dropped - that the best form of delivery for the bulk of public services is neither public or private but something else - a form of enterprise which is independent, managed as a business but run for exclusively social purposes.

So what's so special about social enterprise?   Three things.  The first is freedom.  These organisations are independent and free to fulfil services as they see fit, whether these are spin-out businesses like Sandwell Community Care Trust (formerly Sandwell Council Day Services) or the scores of Academies now dotting the landscape.    Decisions quite rightly sit with the boards of these organisations and the professionals in them.  It  is pushed down to the  rather than sucked up to the wrong level.   While most us us understand the life-giving role of freedom in the private economy, many of us don't, somehow, realise that the same is required when it comes to public services.  As a result, politicians, and the senior people they appoint, create the opposite of freedom      When my company, Stepping Out,  sets up a social enterprise out of the public sector, the hardest argument to win is for its total freedom -in preference some semi-free arrangement with its former parent.   Freedom is the oxygen.

The second is the people-factor.   Services are made up, in part, of paid people.   People either like the organisations they belong to or they don't.   They either feel involved and valued and trusted or they don't.     For many complex reasons,  great numbers of people in public services do not  good about their organisations.    Despite years of investment and trying, the public sector has struggled to achieve the kind of buy-in necessary to really change the way services operate.  Social enterprises, by contrast, are, by and large, staff-owned and recognise the critical role of people in raising productivity, innovation and improvement.   Absence rates tell part of this story (far better than in the public sector) but also what people say about their companies.  It is no accident that several social enterprises are now listed in the Best Places to Work awards every year.

The third, and perhaps, the most powerful reason why social enterprise is the future of public services is that further improvements in our public realm (better public health, stronger communities, improved education, safer streets etc) depend not on more public services but more effective conjoining of public, private and community resources.   Sixty years ago, the poor state of public health demanded, quite rightly, the creation of a single national NHS.   Likewise, the patchy provision of education for working  class children necessitated Local Education Authorities and councils building schools.     Today, the challenges are different.   Beyond the provision of the very basics, pushing through to the next level in health, education and so on requires a far more nuanced approach to public service provision.    To enable this we need to create provider landscapes in all sectors which allow other types of provider to develop and to encourage types of provider - like social enterprises - which, in their very DNA, are built to recognise the often dual role of citizen as user and producer of services.   

Take substance misuse as an example.   This costs the country tremendous amounts in police, court and NHS costs, not to mention the uncosted misery to all involved.   No level of additional public services are going to dent that problem.   The main solution actually lies in helping those in recovery to support those still deep in the problem.   More structure and scale around things like abstinence-based support is probably our best hope both for the people struggling with addiction and for the taxpayer.    The organisations best-placed to add the necessary structure and scale are, yes, social enterprises, whether these be existing charities like Focus 33 in Bury St Edmunds (where Russell Brand came) or new ex-public-sector organisations like Spectrum in Wakefield.   Can the state also work in this way?  No, it can't - because, unlike civil society organisations the state isn't well-placed to put together the complex suite of resources needed to solve problems.   These comprise the efforts of individuals, their families and friends, the wider community, the business community and the state itself.  Crafting them into a person-shaped solution is what social enterprise, in its many forms, including spin-outs from the public sector is best at doing.

Despite the self-evident nature of much of this, the argument is a long-way off won in the long-corridors of the public sector.  Talk to many people in Councils, Whitehall or the NHS about social enterprise and you can count the seconds till they glaze over.   It's not just normally something they think about much.  They are still living the dream that their world is still intact when the rest of 21st century Britain has long since pulled ahead.   At very close quarters I see some Councils and parts of the NHS where the only way you can tell you are not in 1986 are the grumpy emails (copied into about 80 people) by which most communication appears to be done.   Practice around culture, management and customers are all light years behind where they ought to be.  

If this sounds like a counsel-of-despair, it isn't.  I am actually very optimistic about the future.   Things are now happening in public services that are showing the way.   This is being accelerated by the financial crisis in the public sector which is going to last well into the 2020s as the business-model of public services is eventually superseded by something far more sustainable and successful.

And the shorthand I use for that model is social enterprise.