THE NEXT STAGE FOR GOING FOR GROWTH. Quick Guide

Transcription

1 THE NEXT STAGE FOR PUBLIC SERVICE SPIN OUTS GOING FOR GROWTH Quick Guide Brought to you by: DELIVERED BY:

2 Pioneers Post presents A Quick Guide to MINUTE READING TIME INTERACTIVE LINKS QUICK GUIDE PUBLIC SERVICE MUTUALS 0001 What are the QUICK GUIDES? Welcome to this Pioneers Post Quick Guide one of an ongoing series that we are developing with expert partners across the social innovation space. The Pioneers Post Quick Guides provide a quick and easy digest to key topics in social innovation. They are a distillation rather than a comprehensive guide you can read them in minutes, get a good idea of the essential issues and find signposts for where to go for more information. SOCIAL VALUE The guides are written by experts in their fields, and supported by a number of partners in the social innovation marketplace. If you d be interested in writing or supporting a Quick Guide, please get in touch with us via or phone: publications@pioneerspost.com, QUICK GUIDE 0001 Other guides in the series include A Quick Guide to Public Service Mutuals and A Quick Guide to Social Value. 2

3 Going for growth: Public Service Spin Outs GOING FOR GROWTH: A quick guide to public service spin outs nder this coalition Government there is U a strong drive towards social organisations (often called spin outs ) taking on the provision of public services which were previously provided by local or national Government. Spin outs are critically important to the Government s vision of how public services will be provided in the future and as such are becoming increasingly common. The first hurdle for spin outs is to get the service successfully up and running. The second stage is to ensure the organisation s continued success in the light of the unique pressures and challenges which it faces. Discussed in the following pages are some of the key issues which spin outs commonly face in phase two of their life cycle and, most importantly, how they can be resolved. 3

4 Pioneers Post presents A Quick Guide to... Getting your governance right his Government s concept of spin T outs is closely linked to the idea of mutuals. Traditionally mutuals are organisations which are owned and run by the same people, often using the co-operative model which is still commonly seen in building societies and credit unions. The mutuals referred to by the Government are quite different. Often described as organisations run along the same lines as the John Lewis model, they usually refer to an organisation which is established as a type of company but which has elements of mutualism built into its governance structure for example, a certain number of employee representatives on the board. Initial enthusiasm around ensuring that an organisation is appropriately employee-led and/ or that various other stakeholders are properly represented can sometimes result in an overly complicated governance structure being set up. Once the organisation is up and running this structure may not be able to cope with the realities and demands of the business, instead becoming bogged down in internal bureaucracy. The solution is often to carry out a full governance health check which will identify any issues with the governance arrangements which are causing problems and then to make the changes which are needed to enable the organisation to operate successfully in its chosen field. The real decision makers need to be given the power within the governance structure to do what is necessary to ensure that the organisation succeeds. 4

5 Going for growth: Public Service Spin Outs Tackling employment issues A ll organisations are likely to have some employment-related teething problems, particularly in their first few years. Particular considerations will apply where employees have transferred to a spin out under the Transfer of Undertakings (Protection of Employment) Regulations ( TUPE ). The general position is that the TUPE regulations confer on transferred staff particular legal protections against attempts by their new employer to dismiss them or to change their terms and conditions, where the employer s reason for doing so is because of or related to a TUPE transfer. These legal protections do not mean that the employer must always continue to employ all employees who transfer to it, nor that it must continue to observe their terms and conditions of employment in perpetuity. We have seen a number of examples where staff have pushed for more flexible benefits and have been willing to amend their terms and conditions in areas such as sickness entitlement and pension contributions in order to achieve other benefits. The special protection afforded by the TUPE regulations will not apply if the employer s reasons for making a staff-related change are unconnected with a TUPE transfer, for example if a contract is unexpectedly not renewed, but organisations will still need to consider the usual risks and obligations that apply to organisations wanting to restructure, make redundancies or change employees terms and conditions. Equally, and on a more positive note, many successful second stage spin out organisations find they need to expand their businesses and recruit more staff. Organisations may therefore want to consider the terms they offer to new staff, and to existing staff moving to a different post. It is a common misconception that all staff doing the same job must be employed on the same terms and conditions (although regard should be had to the potential for industrial relations issues to arise). Recruitment may present an opportunity periodically to reconsider the organisation s standard terms of employment and whether they are still appropriate to the needs of the business, properly reflect the reality of the market in which the organisation operates, and are economically sustainable for the organisation in the longer term. 5

6 Pioneers Post presents A Quick Guide to... GROWING YOUR ORGANISATION SUSTAINABLY 1 Ensuring your internal processes are ready for growth Expanding an organisation undoubtedly puts additional strain on both the governance arrangements and operational infrastructure. The back office will have to support a wider range of services (possibly in different locations) and the governance often needs to adjust to ensure that it is representative of the new geographical area and wider service user group. Streamlining your internal processes to ensure that your organisation is as fit and ready as it can be is a useful exercise in itself but is essential if you want to grow as efficiently as possible. This involves looking at your operational processes, such as front-line service delivery support, HR, financial systems and IT infrastructure to ensure they are ready to support expansion. Build commercial awareness It is essential to ensure that your key staff are commercially aware. This means that they have the skills, information, tools and (critically) the permission to sell the organisation and its services to potential customers. This is a challenge for many organisations which move from the public sector, where the majority of services have been centrally funded, to a situation where the organisation is reliant on making individual sales to a range of customers. Ensure you have a clear brand It is also useful to appraise how your organisation presents itself to the market. Do you have a powerful and consistent brand? Are your staff able to sell the organisation effectively and its services to potential customers? New organisational structures This can also be a useful time to consider the use of new organisational structures, for example the introduction of a special purpose vehicle to bid for a particular piece of work. This is usually a separate company, set up as a subsidiary of the main organisation, through which the new venture can be channelled to ensure that any element of risk will not impact on the parent organisation. If managed properly these arrangements are relatively straightforward and offer a significant degree of protection. 6

7 Going for growth: Public Service Spin Outs 12 Finding and seizing opportunities for growth There are many examples of successful public service mutuals and social enterprises which are looking to grow through taking on new contracts and attracting investment. Most will have a firm grip on what their core customer(s) want (and are able to pay for) through their initial business planning process. However, they will probably not have had the time or resources to look beyond this to assess what else might be there for them in the wider market. Assessing the market For an organisation to grow successfully it must spend time looking at the wider market in a methodical way to seek out new opportunities which not only fit with the organisation s mission and vision but also make business sense. This process will help to manage the risk of wasting time and effort bidding for new work that doesn t fit with what you are trying to achieve. Growth for its own sake can be damaging and is to be avoided. A thorough assessment of the market will include looking at what other potential customers there are in your local area but also the opportunities that lie further afield. This could be new customers for your current services but could also be new services which your organisation s skills and capabilities would allow you to move into. It is also critical to look at which competitors are already out there and what their strengths and weaknesses are compared to those of your own organisation. Writing winning bids Once they identify an opportunity, many new organisations struggle with the tender process which is often involved. They may have the ability and passion to deliver a service but they often struggle to translate those ideas into a well written tender response. Writing successful bids and face-to-face pitching is an art which can be learned and deserves serious consideration. Getting the contract right Winning a new piece of work is only the start of the process. You will need to ensure that you follow due diligence during the contract negotiation process. All your hard work will end up being detrimental to your business if you sign a contract that you cannot deliver on. Many organisations learn this the hard way but putting a proper due diligence process in place will ensure you minimise this risk. DE FAR QUICK GUIDE FARMS FRESH ORGANIC ORANGES QUICK GUIDE FARMS FRESH ORGANIC ORANG 7

8 Pioneers Post presents A Quick Guide to... Communicating with clarity and confidence s organisations change, grow and TA seek new opportunities, it s important to consider how you communicate this to all your stakeholders. What are the vision, aims and objectives that drive your organisation? What are the values that sit behind your brand? Are all your team consistent and clear in the messages they use? Are you capturing and telling the great stories of social change that your organisation is delivering every day in the communities where you operate? Do you have the facts and figures that back up those great stories so you can prove your social impact? What is special about what you offer your customers, your partners, and those who might commission you to run services? How are you different from and better than your competitors? Why does being a mutual or a social enterprise mean you are more innovative, better value for money and more socially impactful than other organisations? Marketing and communications are often thought of as luxuries that are peripheral to the central focus of your business and social mission. But if you can t communicate effectively, your organisation is unlikely to flourish. Getting a clear communications strategy in place will help you get the right messages to the right audiences in the right way so that you can win more support and more business, and deliver more social impact your communities. Funding from the ICRF he Investment and Contract Readiness T Fund (ICRF) is a 10 million fund managed by the Social Investment Business on behalf of the Office for Civil Society. It aims to ensure that social ventures are better equipped to secure new forms of investment and compete for public service contracts. Offering grants of between 50,000 and 150,000, the ICRF is available to social organisations wishing to purchase specialist support which will enable them to raise investment of at least 500,000 (external returnable money) to develop services or win contracts of at least 1million. The full grant criteria are available at: 8

9 Going for growth: Public Service Spin Outs Who are BWB? Who are Mutual Ventures? BWB has been at the heart of the charity and social enterprise sector for over 30 years and is widely considered to be the leading law firm in the sector. It has been advising spin outs, whether from the NHS, local or national government, for a number of years and has significant experience of working with organisations to ensure their continued success once they have left the public sector. BWB is a preferred provider for the ICRF and can help with both accessing the fund and providing the advice needed to apply for a significant investment or contract. For more information about accessing the ICRF and to discuss the ways in which BWB might be able to help your organisation move forward please get in touch. Abbie Rumbold E: a.rumbold@bwbllp.com T: W: Mutual Ventures is dedicated to efficiency, innovation and sustainability in public services. In short, we re about creating better models for better services. We work with local authorities, NHS organisations and other public service bodies on both strategy and implementation, including the feasibility and development of staff-led mutuals and community social enterprises. Our team provides hands-on support to commissioners and front line teams through the entire journey from options appraisal and business planning through to transition and launch. We also provide advice on effective commissioning for economic and social value and on ongoing performance improvement services. Andrew Laird E: andrew@mutualventures.co.uk T: +44 (0) W: Who are Matter&Co? What is Pioneers Post? Matter&Co works with BWB and Mutual Ventures to provide specialist support and expertise on marketing and communications. In addition to consultancy work (for clients such as Deloitte, CCLA, RBS, UnLtd and several charities, social investors and housing associations), Matter&Co is the organisation behind Good Deals, the UK s leading social investment conference; the creator of the RBS SE100 Index and runs Pioneers Post, its own online newspaper and networking platform. Tim West E: tim@matterandco.com T: W: Pioneers Post is an ambitious new online newspaper and communications platform for everyone doing brilliant business to drive positive social change, across sectors and across the globe. Reaching well over 30,000 people every month through its website, e-newsletter and social media, the platform offers news, views, debates, analysis and advice from brilliant innovators, entrepreneurs, investors and thought leaders across the social innovation space. Matt Black E: matt@pioneerspost.com T: W: 9

10 Pioneers Post presents A Quick Guide to... Quick Guide 10