Processes of innovation in public services se spin-outs, fergus lyon ian vickers, tsrc, june 2013


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Innovations in public services seminar, Third Sector Research Centre and UK Innovation Research Centre, 17 June 2013

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Processes of innovation in public services se spin-outs, fergus lyon ian vickers, tsrc, june 2013

  1. 1. Processes of Innovation in Public Services: The Case of Social Enterprise Spin-outs TSRC & UK~IRC Seminar on Innovation in Public Services 17th June 2013 Fergus Lyon & Ian Vickers with Leandro Sepulveda, Caitlin McMullin, Dan Gregory Centre for Enterprise and Economic Development Research 1
  2. 2. Introduction Policy context • Reforms initiated by New Labour (1997-2010) and continued by Coalition Government • New Public Management and political-ideological forces in favour of markets, increased choice and competition • State-run public services increasingly transferred to new ‘independent’ spin-out social enterprises and mutuals or bought in from existing organisations that trade for social purposes – process of social enterprisation • Theory of change that links spin-out social enterprise (SE) and mutual forms with innovation and efficiencies • Focus on health & social care sector as recent testing ground, but longer history of employee-owned council leisure centre spin-outs since 1990s 2
  3. 3. Aims and research questions • What is the nature of innovation in public service delivery as enabled by spin-out SE/mutuals? • What sort of processes, facilitating factors and influences? • What is the involvement of employees (co-owners), user communities, government, funders and other stakeholders in such processes? 3
  4. 4. Methodology • 25 case studies of social enterprise (SE) mutuals in health and social care • 5 cases in leisure services • Interviews/focus groups with: – chief executives – senior managers – key staff – service users – key external stakeholders (commissioners, partner orgs, TUs etc) 4
  5. 5. Preliminary findings The new organisational form • Combination of push and pull factors • Transition processes often accompanied by: – contestation + opposition from some stakeholders – high levels of consultation and staff engagement – adoption of specific mechanisms (e.g. staff/shareholder councils, user/community forums, asset locks) giving greater power and voice to staff and user communities (‘co-creation’ or ‘co-production’) – Cultural/presentational changes
  6. 6. Advantages of new SE form – staff views “…being able to use your initiative, to actually develop things that people want and need without the red tape.” “…as shareholders, we’ve actually got a say in what happens.” “…as an NHS trust it was very, very set in stone that these are our boundaries and this is how we’ll behave and this is where we’re going. But, as a social enterprise, staff are […] really empowered to have a massive part in the decision making” 6
  7. 7. New services • Often focused on meeting under-addressed health and well-being needs and related preventive activity: – novel forms of outreach and engagement within local communities – rehabilitation (e.g. helping people with disabilities with independent living, employment/training schemes)
  8. 8. Incremental changes • Often resulting from the more flexible and responsive organisational forms and cultures, leading to greater efficiency/cost- effectiveness: – numerous small improvements to systems and processes – services re-modelled and more integrated – managing sickness absence
  9. 9. Advantages – a chief executive view “You’ve not got the comfort, the safety blanket, of being part of a massive organisation, but it means that you can obviously go for best value [....] you can be a little bit edgy, a little bit more risky […] it’s a flat faster structure.” 9
  10. 10. Advantages – a commissioner view “…they are very willing to go the extra little bit […] really go ahead, forward thinking, proactive, innovative […] And leadership is really key. [***] is a fantastic leader [...] The staff who worked in the old organisation are [now] much more motivated and much more productive.” 10
  11. 11. Support for innovation • Financial support from Social Enterprise Investment Fund (SEIF) (about 2/3rds) + some report need of financial backing/investment to respond to tenders for larger services • Other support - coaching, mentoring, advice etc (cited as v. helpful: Cabinet Office Mutuals Taskforce, Employee Ownership Association, Social Enterprise UK, Baxi Partnership + others) • Stakeholder/political support – e.g. Local Vol Services, some LA ‘co-operative councils’ particularly supportive • Current/future needs identified by many – concern that in austerity context such support may not be there in future… • Strongest spin-outs have themselves become role models/ channels for learning (some v. critical of restrictive notions of ‘best practice’ advanced by some consultants). 11
  12. 12. Growth – bigger is better …or is small beautiful? • Some aspiring to grow beyond their region, diversify, achieve economies of scale including through franchising.. • Others cautious about growth (or only growth within limits) – ‘big not beautiful’ and may be antithetical to ideal of closeness to users/customers and potentially damaging for integrated local infrastructures... ? 12
  13. 13. Could changes have occurred within the public sector? • For many interviewees, NO or would have happened more slowly…. • But - in some cases significant innovative activity was a continuation of what had been initiated within the public sector some years previously • SEIF selection process – evidence of previous innovation important for qualifying for such funding
  14. 14. Views of SE chief execs “A lot of the integrated team that I’ve described to you could be done. […] I think it would be misleading to say that you couldn’t have done it as part of the NHS.” “We would have made some of these changes but I don’t think we’d have had the freedom to test and be as risky as we are.” “*Our pre-spin-out innovative service] existed because we didn't ask permission. All the best things I've ever done in the health service, we've done under the radar *…+. We haven't explicitly looked for permission.” 14
  15. 15. Future prospects for SE spin-outs and public services? 1. Capabilities and support - in order to compete in increasingly competitive markets, SEs require varied resources and a high level of entrepreneurial/ leadership skills. Questions remain over how these can be nurtured and developed over the longer term. 2. Co-operation and competition - tensions around need for co-operation and sharing of innovative ideas in a competitive context, posing a challenge for the development of integrated local infrastructures and support for innovation.
  16. 16. Future prospects cont’d 3. Commissioning for social value and innovation – in future competition rules may restrict commissioners’ ability to support SE innovations. Under austerity, danger that short- term financial savings are prioritised over experimentation/ innovation and potential long term benefits? “..... our ability to fund things outside of a competitive process in the future are going to be severely restricted by the government’s proposals. […] sometimes when you go out to tender, it’s the bigger organisations who’ve got the capacity to actually do those huge tender processes….” (Commissioner)
  17. 17. Thank you – any thoughts, questions? Centre for Enterprise and Economic Development Research