Posted by:7 February, 2012
Doing a monthly blog is stimulating there is no doubt - not least because most of the interesting news seems to be sprung upon us as the deadline for publication draws near!
For some weeks you are considering how to squeeze these rarer social enterprise and mutual curiosity-quenching droplets of information from the otherwise brain-numbing Mistral of fiscal austerity that are flowing from the City pages and filter them through via the blog when the eleventh hour arrives and you are slapped across the face by by announcements so sodden with portent that you are knocked backwards by their heavy intent.
Before Christmas the much-respected Sir Stephen Bubb, the Chief Executive of the Association of Chief Executives of Voluntary Organisations said in an interview with the FT that the Big Society has been irreparably damaged as a brand through government spending cuts and the failure of politicians to sell the idea to the public. That may have been the case, but over the last few weeks I think it is fair to say that the concept of the Big Society is now being shaped and defined more as the government tries to respond to the continuing ill-wind blowing off the cold and damp City streets.
The current “hurricane” is called “bonus” and the government has realised it needs to look to some different lifeboats for people - including those that can batten down some of the hatches that the good ship PLC has not been able to.
Sir Stephen did however comment that David Cameron is looking beyond a managerial agenda about value for money or professional delivery and understands that this whole agenda is partly about giving citizens more control over public services. Sir Stephen’s words in December were very prescient. Now David Cameron has announced that he wants to see more shareholders, more home-owners, more entrepreneurs and will encourage different models of capitalism - including ones where employees have a much more direct stake in the success of the company.
These words will be considered by councils at a time when many are actively considering future strategies for a range of services and when there are new rights for public sector workers to create mutuals and own a stake in their success - such as the Right to Challenge under the Localism Act 2011.
The government has accepted some of the benefits of mutual, member-owned, organisations - the acknowledgement of over 12 million co-op members in the UK for one - and that the growth of such models is currently hampered by barriers such as outdated legislation which add to cost and complexity.
Accordingly, the government has announced that there will be a new Co-operatives Bill and the outdated legislation will be referred to the Law Commission. Ed Mayo of the Cooperatives UK said that he hoped that any new legislation will make it as easy to form a co-operative as any other form of business. 2012 is the United Nations International Year of Cooperatives and it is good to see some real energy focussed on new business models.
The new announcement about the review of legislation follows hot on the heels of (and is I suppose the natural outcome of) a huge amount of focus on the John Lewis model by Nick Clegg and others.
A “debate” is just that; it is not all one-sided and there is a recognition out there that the employee owning model is not for everybody, and indeed, the devil is in the detail of any arrangement. For example, questions that seem to befloating around include: do employees really have influence on important decisions? Will some arrangements encourage free-riders and discourage the entrepreneurs? And, crucially, in the health and social care businesses - how much public and patient involvement is there in the business?
Undeniably, the end of January is a good time for new business structures and wider ownership and Councils need to start thinking about planning how this model fits into their commissioning landscape. Councils will want to thinkwhether they have similar established businesses in their area providing services and if not, is there an opportunity to develop these businesses as some Councils move away from trying to provide all the services they have traditionally provided?
Other important news which continues to help better define the scope of the Big Society can be seen in the following developments:
- The government has had a wish to enable employee-led organisations to be able to gain experience of running public services before being subject to full and open competition and, although this may be difficult to achieve, principles contained in a new proposed Directive on procurement states that the full application of rules should not apply to certain social, health and educational services and this must be a good start. Further, the government is still keen to see that public bodies consider how a service or project could be procured in a way that might improve the economic, social and environmental wellbeing of their area.
- A report was published by Demos which looked at the possibility in residential care settings of homes breaking down costs in such a way to enable personal budget holders to spend a portion of their budgets more freely around social costs, activities and even meals. Further, the Report looked at introducing as standard, residential forums which could have a range of powers and influence from acting as a consultative body through to being more actively engaged in influencing policies and practice in partnership with staff and management.
- The Big Lottery Fund’s priorities could be changing to encourage social involvement in communities and strengthening the capacity of voluntary and community sector organisations.
- Following the coming into effect of Legislative Reform Order under the Credit Unions Act 1979 charities, social enterprises and community groups are now able to join a credit union. Previously only individuals were able to be members and use the financial services credit unions provide. This development will allow credit unions to compete more effectively with banks and other lenders.
The concept of Big Society has been hard to pin down for some, but we seem to be getting closer to the heart of the matter as the pace of change quickens and the government responds to the need to encourage different ways of doing business. There is an increasing acceptance that it is important to involve those who are directly involved in providing or receiving services, staff, public and patients, in owning and managing organisations and to have regard to local needs and requirements.
Chris Brophy is a partner with Capsticks, specialising in commercial and contractual work for healthcare bodies, social enterprises, mutuals and charities.
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.