Public services should be a bigger part of the revolution in employee-owned spin-outs. We need to change the behaviour of commissioners and secure a renewed drive from government
More and more public sector entrepreneurs are spinning out the services they manage and deliver into new employee-owned businesses.
These spin-outs currently operate, or are developing, in at least ten different sectors, including health, children and adult social work, fire and rescue services and youth services. In the health economy alone, employee-owned public service spin-out businesses already deliver more than £1bn of NHS services each year.
There is compelling evidence that employee-owned public service spin-outs maximise productivity, raise the quality and outcomes of services received by users, increase returns on investment for service funders and improve employees’ well-being and the conditions in which they work.
The context is massively important. Public sector productivity in the UK has declined over the last generation despite massive overall increases in public sector expenditure in real terms. And public sector delivery of services and achievement of outcomes remains a deeply worrying mixture of brilliance and ineptitude.
Because of the improvements in productivity, service quality and outcomes they are achieving we should celebrate employee-owned spin-outs and the public service entrepreneurs within them. The successes of organisations such as SEQOL, 3BM, Aspire Sussex and Care Plus Group, to name but a few, are truly inspiring. The brave pioneers who have created these enterprises deserve all the recognition they get.
Our public services would incontestably benefit from a dramatic increase in the number of these spin-outs and the range of services they provide. To enable this to happen, the commissioners who purchase public services on our behalf will need to radically change their behaviour at pace by doing three things:
- Elevate their pursuit of the best value and outcomes for local communities above the cultural or ideological opposition some involved in purchasing services have in principle to employee-owned spin-outs
- Purchasers must stop forcing spin-outs to compete for contracts within tired, old and often obscure procurement processes that are designed for, and favour, transactions with, large, long-established, corporate organisations
- Purchasers of public services in Whitehall, local government, health and beyond, need to proactively market to employees contemplating spinning out the range of information, advice, mentoring and finance that is available and play a role in encouraging them along this journey
In addition, the spin-out agenda will need a further injection of resource, energy and enthusiasm from government. In its period in office so far, the current government has undertaken some impressive work in support of public service spin-outs, mainly through the endeavours of Francis Maude and his team at the Cabinet Office.
The recently launched Ham Review into how to increase employee ownership in the NHS, including in acute hospitals, community services and foundation trusts, is also a positive development.
But we now need faster travel in the same direction for the remainder of this government’s tenure. And I want to see a permanent future obligation on government, regardless of its political colour, to play a leading role in removing the barriers faced by employees who want to set up public service spin-out businesses to improve the services we depend on.
We are very much in the decade of employee ownership. Our public services can and should be a bigger part of this revolution. If we can change the behaviours of those who buy public services for us, and secure a renewed drive on this agenda from government, we will see even more public service spin-out entrepreneurs.
If not, the brave will remain the few.
Iain Hasdell is chief executive of the Employee Ownership Association
