Transition Institute supports managers spinning out public servicesNew social enterprise body will support innovative public services delivered by former public managers
The Transition Institute is a way to bring together bodies being spun out of the public sector. Photograph: James Worrell/Time & Life Pictures/Getty Image
In his Public Manager column in the Guardian on 4 May, Craig Dearden-Phillips investigates what it is like to lead a service out of the public sector.
This is particularly apposite, given the recent admission by the government that it is scaling back its plans to privatise swaths of the public sector for fear of appearing to be in favour of private companies excessively profiting from the taxpayer.
The emphasis is now firmly on services being run by employee-owned, third sector or mutual organisations and Thursday 5 May sees the launch of a new body designed to respond to this agenda and provide support for budding public sector entrepreneurs.
The Transition Institute is a new, independent centre for research jointly run by Social Enterprise London and the National Endowment for Science, Technology and the Arts (Nesta). The aim is to highlight and facilitate innovative new public services.
Allison Ogden-Newton, chief executive of Social Enterprise London, says the new institute is a way to bring together bodies being spun out of the public sector with support organisations, to enable them to collaborate and raise the quality of debate about new ways to deliver public services.
"The UK is ahead of the rest of the world in advancing the discussions around independently-run public services and first in setting up an institute to study these new models and support those who want to get involved," says Ogden-Newton. "It's a brave new era and we are thrilled to be working with Nesta to establish this groundbreaking institute."
She says the aim will be to "help give direction and establish common principles in order to support emerging leaders".
Mark Johnson, managing director of TPP Law, which specialises in advising public sector spin-outs, says there is a need for a central bank of resources, expertise and information for public sector managers if employee-led mutuals are to take off and adds that the new institute will play a "vital role" in collating and disseminating that knowhow.
One example of a social enterprise delivering a service formerly run within the public sector is Living Well, which provides support and guidance for people living with HIV and AIDS. Until recently it was a successful service run by Hammersmith and Fulham Primary Care Trust (PCT), but the organisation's ability to develop into new service areas was stifled by financial barriers, chiefly by not being able to carry financial surpluses into the following year.
Following a period of research, staff came upon the idea of forming a community interest company and 'spinning out' the service from PCT control. James Miller, who has led the process and will manage the new social enterprise, says he is enormously excited at the potential of what can now be achieved. "We are already looking to deliver contracts beyond our PCT, putting in bids for corporate sponsorship and making links with large national charities," he says. "Running our own organisation really gives us the freedom to innovate, it's enormously exciting." Miller stresses that Living Well has developed in close partnership with the PCT.
Miller's enthusiasm mirrors the finding by Dearden-Phillips that being part of a social business engenders an increase in productivity, innovation and energy among staff.
But Dearden-Philllips also warns that few councils are yet looking seriously at creating spin-outs - there is no sign as yet of the first trickle of spin-outs turning into a flood, he points out. His conclusion is that there needs to be more expertise in local authorities about how to nurture spin-out business. There are also some real financial issues that face potential spin-outs, particularly about how pensions will work, and how to finance spin-outs. "Above all, there is a real need for leaders - hundreds of them," he comments.
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