Chris Brophy
Business metaphorphoses
It is well known that construction lawyers are a breed apart. They need to be because they have to deal with everything from how building regulations might apply to mud homes that have been erected, to impossibly conflicting price and payment schedules, the applicability of international rules and the export and import of products from entrepots. What is not as well known is their ability to understand the real nature of what those involved in advising mutuals and social enterprise businesses are doing at the moment.
Having pondered the activities of the Capsticks social enterprise and mutuals team recently, David March (Capsticks’ construction law expert) opined that said group was in the business of “mutating, hatching, splitting and doubling”.
Not quite in the fashion perhaps of the “Fantastic Metamorphosis, Other Worlds” described by Marina Warner in her book of the same name, but public bodies are certainly experiencing a metamorphosis of sorts at the moment. This includes the shaping, forming, assuring and hiving off of new businesses which appears to be part of a dynamic process caused by natural business cycles and processes of generation and evolution, growth and decay.
If the governance is robust, the management strong and the leadership inspirational, then one can begin to be excited about the possible outcomes that could be achieved
Health and social care has been the subject of many changes over the years and it is fair to say that quite often the results of the change processes are not entirely new organisations with no links to the parents from which they came. DNA is hard to wipe out completely and the ‘soul’ of an organisation can migrate from one body to another.
So, with mutuals and social enterprises emerging out of local authorities and health bodies, the community benefit test of these new organisations is a good link back to the public sector spirit and an embodiment of aspects of the ethos, yet the new organisations function and exist in the different worlds of both the private and third sectors.
One can see from the differing and ever-changing environments that these new organisations need to operate in the importance of flexibility and the ability to be transformative, constantly adapting as the only way to thrive in such changeable conditions.
The stresses, strains, forces and pressures that they will be subject to could result in shapes and sizes, qualities and characteristics which might not have been predictable at the start of the process, but if the governance is robust, the management strong and the leadership inspirational, then one can begin to be excited about the possible outcomes that could be achieved.
The reincarnation of mutuality in businesses developing out of the changing public sector may only have taken hold relatively recently, but its historical roots are strong and its inherent focus on involving in the business those who benefit from the services it provides is already having a strong impact on the market place. A key advantage for the new mutuals should be their involvement of patients and users in their decision-making processes.
This should be an advantage because it means the new organisations are able to show exactly how their business is aligned to the needs of their patients or users. However, this alignment is not all one way and it really is very interesting to see how the counter-balancing forces on the commissioning side are amassing and developing, including patient involvement in the decision-making of the NHS Commissioning Board, the Clinical Commissioning groups and the influence of the Health and Wellbeing Boards.
Under the latest proposals in the Bill, local authorities and clinical commissioning groups will need to involve Local HealthWatch organisations and the people who live and work in the area in joint strategic needs assessments. There will also be a duty on CCGs to consult Health and Wellbeing Boards and on the promotion of patient involvement in the exercise of their functions.
It is clear that where mutual and social enterprise organisations are involved in the provision of health and social care, in the future, patient involvement should be occurring at both the commissioning and provider levels and I do not see this as an unnecessary overlap of resources. Two heads are better than one and there will be a more sophisticated debate about service levels, specifications and standards; care pathways are likely to be more relevant and focussed. The announcement by the government of the available £1m of funding available to support the development of Health and Wellbeing Boards should help the Boards to get themselves fit for this crucial purpose.
Nobody really knows how their own particular journeys will develop but what is clear is that businesses need to be ready to transform, re-shape and develop on their journey if they are to continue to survive and thrive in the current environment. So, don’t be worried about the twists and turns, just ensure that you have a structure and set-up that enables you to rise to the challenges ahead.
On the hunt for mutuals and social enterprises
If you have plucked up the courage recently and stepped outside the office, leaving the paper-strewn desk, the addictive pull of the PC and the demands of the team, with the intention of sighting or hearing about the much discussed mutual or social enterprise, then you may have been struck by the environment in which you find yourself.
There is a certain “quiet before the storm feeling”. You can sense the sea being sucked back, the birds have gone quiet, the sky is red-stained, there is no breeze, as those interested in new business methodologies wait anxiously to hear whether there is a panacea for financial, staffing and service problems.
Breathing becomes more steady as anxiety is anaesthetised by contemplating the difference between mutuals on the one hand and social enterprises on the other and then you can start settling down to really understanding what is going on, and settle down you must as you realise you really need to understand this beast before heading back to base and being enveloped by the day to day issues.
It can take a little time to understand anything well, and mutuals and social enterprises are no exception, but a number of public bodies have had the vision to focus on this target, learn about it and harness the energy and outcomes they can achieve. Real examples are out there for all to see and some of the leaders of these organisations are both inspiring and practical in their approach.
One of the difficulties for local authorities developing social enterprises is the time, funding and resources needed to just to consider change, never mind working up business plans
If you have not heard a health or social care practitioner who has come through the management tiers to lead a social enterprise business and explain what and how they did it, and the impact on the business a year later, then you must. Siobhan Clarke of Your Healthcare in Kingston London is good to hear in this regard.
One of the difficulties for local authorities developing social enterprises is the time, funding and resources needed to just to consider change, never mind working up business plans including engaging with staff and thinking about the identification and transfer of significant businesses. Despite the difficulties all Councils have, everyone knows this process needs to be commenced, and now, as deadlines start to loom more large and the need to stay in control of the process becomes the main line on the forehead.
In many ways Local Authorities have it more difficult than PCTs. At least PCTs knew essentially what services they were looking to transfer as part of the Department of Health’s “Transforming Community Services programme and pursuant to their Right to Request” to take their provider services. The scope of the businesses for the LAs to think about is potentially very extensive and there is also the question of how to package businesses together.
Should all the businesses in contemplation be transferred to one social enterprise or would those businesses not work together and need to be packaged in different ways. They might for example have very different kinds of beneficiaries or users of the service and the stakeholders may be very different and therefore it might be more difficult to align the governance of the organisation with the business objectives if they were all combined. However scale is important and of course funding and income is crucial. It serves no useful purpose to set up a business which has no viable business plan. Whatever happens you need to identify the services, the assets, the staff and the support that will be involved and at the same time you will looking to satisfy yourself about the potential management team, its capabilities and skill-sets and then developing the business plan to see if it can all work.
Of course Local Authorities are already developing some interesting projects, from establishing new social work practices to creating integrated health and social care social enterprises. Councils involved in the social work pilots are aiming to be more innovatory, provide better services, improve staff satisfaction and reduce some of the bureaucracy and are looking to social enterprise vehicles to help deliver these objectives. Some key features of social enterprises that will help deliver these benefits include having clear objectives for the benefit the community, ploughing back profits into the business (rather than distributing them all to shareholders) and looking to staff and people that use the services to be involved in the ownership or management of the organisation. The key issue for people to remember at this stage is not that there is a lot to think about and plenty of tough issues, but that people have been successful in developing, incubating and establishing successful businesses in a competitive market place. You just need to go and get that tee-shirt. Someone needs to inspire and lead on this issue in your organisation and two things can be guaranteed, it will be challenging and exciting.
Chris Brophy, partner, commercial, Capsticks
LGC’s social enterprise channel, providing the latest local government news, comment and analysis.
In association with Capsticks, specialist law firm for health and local government organisations.
