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The Disraeli Room

The Disraeli Room

Blog Post

Supporting the Brave

24th September 2013

Employee ownership in our public services

The UK economy remains in transition. Growth is slow. Austerity is the new norm. It will be with us for another decade or more as an antidote to the poisonous effects of some of the mistakes of the past. Stagflation is an on-going risk. Amidst these on-going economic challenges we face in the UK, a quiet revolution in our public services continues to gather momentum.
More and more public sector entrepreneurs are spinning out the services they manage into new employee owned businesses (sometimes called mutuals) that are free from the controls of their former public sector parent organisations.

Employee owned public service 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. There is compelling evidence that these spin outs raise the quality of the public services received by users, increase returns on investment for funders and for employees improve their well-being and the conditions within which they work.

We should celebrate this emerging revolution and the public service pioneers that are its protagonists. The successes of organisations such as CSH Surrey, City Health Care Partnership, 3BM and North Somerset Community Partnership, to name but a few, are truly inspiring. I am proud that so many of the spin outs are energetic Members of the Employee Ownership Association and that we have helped a large number of them to start up. The brave entrepreneurs who have created these new enterprises deserve all the accolades they get.

But there is still much more to do. Despite some wonderful progress, the vast majority of public services that are not run in house continue to be outsourced in a routine, traditional, way to externally owned private sector providers. There has yet to be a step change in the overall quantum of services that are contracted to employee owned organisations. Any revolution that seeks to change an ancien regime requires more and more collaboration from some key players inside that regime. And so making the step change will require most purchasers of public services (often called commissioners) to dramatically change their behaviour at pace.

Commissioners, or more accurately buyers, need to elevate the importance of their pursuit of best value above the cultural opposition some stakeholders have in principle to employee owned spin outs irrespective of the evidence.

They also need to end the way that they often force these spin outs to compete for contracts within tired old processes that are designed for and favour transactions with large, long established, corporate organisations.

And they should 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 the journey to spinning out.

Employee ownership in our public services has not yet reached the critically necessary tipping point beyond which it will become main stream. Getting there certainly does require a major further injection of resource, energy and enthusiasm by those who commission public services .This is not optional. The prize at stake is the transformation, through a greater role for employee ownership, of how public services are delivered.

So we should all continue to do what we can to help. As part of our long term commitment to helping, the EOA is devoting a significant part of our Annual Conference this November to those who want to learn about the practicalities of how to create employee owned public service spin outs; how to accelerate growth within them; how to fund them; how to optimise performance within them; and how to ensure they are sustainable. Anyone genuinely interested in this agenda should join us at the event in Birmingham.

I look forward over the coming months to public service entrepreneurs – the brave – creating more and more new employee owned spin out businesses across the UK.

We must not allow the brave to remain the few.


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