Necessity, as we know, is the mother of invention. Talking in recent weeks to London's local authority chief executives about their challenge to slash costs and mitigate the impact on service users and staff, I ask, can you do that and improve services?
It is unfortunate but perhaps inevitable that the greatest opportunity to innovate public services since their inception, comes when money's too tight to mention. As one local authority chief recently told me: "It's like trying to surf a tsunami, if we can hold on we might make it, but if we lose control, we'll go under." So is this really a good time to talk about social enterprise? Or would that make me the air stewardess trying to flog perfume during the emergency landing?
To put my view in context, I believe that inefficiencies are created when the government acts as buyer, seller and quality controller of services. It invariably gives the thumbs up to its own standards, errs on the side of generosity in setting prices and ends up paying more than it should. Into this Trinitarian formula we need at least one or two independent players. This does not devolve responsibility for provision from government, but it does allow them to design, purchase and assess services very differently.
Everywhere government is looking to save money by cutting and outsourcing, but before we scramble for the exits, can I offer the attractive alternative to privatisation? Social enterprise. Prioritising employee led services clearly run for the 'profit' of service users, not shareholders, reduces cost. These companies can put a value on staff by-in through such things as absenteeism, which is lower in social enterprise than the private and certainly public sectors. Greater efficiency de facto drives down cost and can improve quality.
Existing social entrepreneurs, like veterans, represent a real asset in these trying times. Mark Sesnan, managing director of GLL, and recent Government Pathfinder appointee, told me: "It feels like the 1980s when councils had to make big cuts, closing services everywhere, but we know now what we didn't know then, that there is an alternative in social enterprise."
It makes sense to work with and build on models like GLL which could collaborate on other forms of service delivery. After all, if leisure services can be successfully delivered the social enterprise way, why not libraries, or schools or children's services?
Social Enterprise London's recent publication Transitions, distributed across the public sector, and mentioned on Stephen Bubb's blogg this week, illustrates how services delivered by social enterprises have saved money, improved standards and achieved additional social impact. For example 'profit' in GLL, the UK's largest leisure social enterprise has been used to provide training for hundreds of long term unemployed young people. HCT bus services has similarly created local jobs and even a harm reduction bus that supports drug user rehabilitation. Ironically by making this about people not money, costs can be cut.
Conversely when private companies deliver state sponsored services they might or might not do a good job but they will always maximise profit, shareholders will be prioritised over service improvement or staff working conditions, and risk alongside responsibility will be upwards managed back to the state, a process reflected in the cost.
But what really matters is not the governance model but social impact and sustainability of the new provider. They will need governance that enables them to structure their finances so that they can deliver services that are paid for by results or have come through personal budgets, because these will be the new forms of payment. They will need to attract and retain the best staff and borrow because, even with a three or five year contract, they will have to expand to compete and survive. But it is possible to do all that and offer staff a stake in the business as Sunderland Homecare Associates does, or involve users in service design like Your Healthcare in Kingston, in effect, be social enterprises.
There are difficulties, however. The central message of big society, that people can do things for themselves, seems to have left public service providers to work out, on their own, what it means for them. Investment in sharing best practice has been cut alongside everything else, leading to reactive decision-making and lost opportunity.
So how can we shape the amorphous message of big society into a step-by-step transition where social enterprise emerges as the new service provider of choice? As Annie Francis of Independent Midwives UK says: "Government must introduce smarter, faster and more effective business support and encourage public services to genuinely engage with the [social enterprise] sector".
I urge the widespread distribution of Transitions and take up of its recommendation to work with local social entrepreneurs to establish champions and spread the word. With leadership that encourages people to chase savings alongside social impact I believe we can have a happy landing, even if it's been a bloody bumpy ride.
Published article in this weeks Guardian Public online
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