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How To Step Out

Authors: Craig Dearden-Phillips with Mark Griffiths

The following is an extract from the book:

Let's make our public services great again

I am publishing this book because I believe in the future of public services. This belief is based on what I have seen in public services over 20 years.

It feels to me that we’re at an important point in the discussion about UK public service provision. Although I’m confident that there will be more social enterprises emerging in the near future, this could either turn out to be a steep or gently rising curve. I also know that while, structurally, there is a strong case for social enterprise in public services, this doesn’t necessarily mean that it will actually happen.

Posited against this model is, on one side, the public sector unions, who remain wedded to state provision, and, on the other, the free-marketers, who would happily see nearly all public services handed straight to large global corporations on very long-term, inflexible contracts, in which social innovation, community and individual resources, and employee ownership would play little part.

I think there is a better future on offer than that.

An awakening…

My view about public services has also been informed by my first career as a social entrepreneur working with disabled people. After a few years, I realised that my organisation, Speaking Up, was actually dealing with the legacy of failed state services. From birth, the state was pretty much destroying many disabled people’s life chances – at great financial cost. Wresting control of that money and those decisions was the only real chance people had of getting their lives into a better place, I discovered. What I also found out was how frustrated many of the people working in state organisations were and how this showed in sickness, low-productivity, and an absence of hope. It was extremely rare to find any real ‘can-do’ in the sector in which I operated. I came to regard state services as a noble experiment gone terribly wrong.

On the other hand, I didn’t trust the free market either. In the disability sector, community care allowed private companies to enter the scene. This did a lot of good in many places, bringing investment and a variety of businesses – small, medium and large – into a stagnant care and support industry. But, over time, in the endless search for returns, the industry consolidated. Smaller businesses were bought out by ever-growing ones, all fuelled by investment funds that needed high returns. Money was borrowed to buy more businesses out then repaid by selling on those businesses quickly. Massive returns were generated – in the case of Southern Cross, by selling the housing stock of its companies and leasing back the homes.

I had some business dealings with this care sector. Speaking Up, my first organisation, partnered with an excellent small private provider which was then bought and sold a number of times as it grew in scope, struggling to pay the debts loaded onto it by successive buyers. To recover asa business, this provider started taking into its secure hospitals whomever it could, regardless of people’s real needs, and held on to them for what we saw as unreasonably long periods. To perform as a business, it had to do the wrong things for people – and working with them was a clear lesson to me that an undiluted pursuit of profit isn’t going to lead naturally to the best outcomes for people. We saw the quality of that service slide into chaos and the culture turn toxic as the company kept changing hands. By the time we walked away, their culture and operations were under close scrutiny by the regulators and the company was nothing like the one its founders envisaged.

A realisation…

Around the same time, I was hearing about social enterprise. I realised, quite quickly, that I was operating one. We were profitable – but we reinvested profits in our mission. While we received donations as a charity, we were increasingly a business with clients and customers more than donors. We also had a powerful social mission and expressed this in our employment policies and the way we ran the business.

A little later I heard about social enterprises coming out of the public sector. At first, I was a bit sceptical. I wondered whether there were people in the public sector who would swap a very secure berth for the roller coaster of running an independent business. Then I met a few of them. What they all had in common was a profound desire to serve – but a deep frustration at the limitations placed upon them in large, public organisations. Many of them reminded me of myself. All believed powerfully in the importance of a motivated, switched-on workforce. Every single one of them knew they could do more with less in a free-standing organisation.

So I decided to mentor one of these leaders. What I saw from doing this was how much there was to gain. The following year, a thousand staff were due to step out from the NHS into the new social enterprise. Already, my guy had a plan to change the organisation from one in which performance was mediocre to best-in-class. He was transfixed by ideas about customer service,which had hitherto been impossible to practise without running into bureaucratic quicksand.Crucially, he saw how the business could grow to meet a wider level of need locally, how it could join up different needs. And he could do all this on a budget which was going south, because of the productivity gains that would be made simply by not being part of a public sector cost-base.

His story was matched by that of many other people I met shortly after. I was sold completely on this idea. It made total sense to me. Businesses that exist for public benefit and are also dynamic, innovative, competitive and properly led. Not scared of competing with the private sector and capable of negotiating with the public sector on proper, commercial terms. The key would be to create more of them, a critical mass. To some degree, this was underway by 2008,with the Right to Request process in the NHS, now called Right to Provide. But these were outliers, early adapters. It was important to get more of these going. Vital too was persuading ordinary public managers that this was a course they should consider.

What was … Right to Request?

The Right to Request enabled frontline primary care trust (PCT) staff to apply to their PCT board to deliver specific services through a social enterprise. Introduced in 2008, the Right to Request was open to all PCT frontline staff, and invited proposals to help transform local health and social care services.

The Right to Request scheme closed for applications on 30 September 2010, in line with the requirement that PCTs separated commissioning and provision of community services byApril 2011. A number of proposals from staff, over three waves of the Right to Request, are now live or working towards it.

Following the successes of the Right to Request, the Department of Health launched the Right to Provide on 30 March 2011. This offers staff across the statutory health and social care sector the opportunity to apply for support in setting up employee-led organisations to run and expand the services they already deliver.

One of the things I noticed in my work in health was the exceptional entrepreneurialism of the group involved in social enterprise. Not everyone is of the same quality, though, and I felt that more support was needed to give everyone a chance to do this if they wanted.

To this end, I set up Stepping Out. The aim of my business was to create the technical and human backing required to support people who are contemplating leading a spin-out. I had come to the end of one journey and wanted to start another – to help to change the public sector. This is the motivating force of my new business. And an important starting point in making a wider impact, I felt, was to share the learning of the cohort of people I’d had the privilege of getting to know during my first year in business. This book is built around that learning.

A year into my Stepping Out business, what do I have to say to people inside the public sector considering stepping out? The first thing is to see if it’s for you. Read this book. Hear from those already doing it. If you’re struggling with your health or a mass of commitments or worries outside of work, this may not be the right path for you just now. My chief observation, however, is that if you’ve got energy, guts and enough space in your life to have a ‘second job’ for a while, you are the ideal candidate.

How to Step Out is free and available to order here.


The publisher is Stepping Out.

Extract: Let's make our public services great again © Craig Dearden-Phillips 2011.

How To Step Out © Craig Dearden-Phillips and Mark Griffiths 2011.

All Rights Reserved. No part of this paper may be reproduced in any form without permission from the publisher except for the quotation of brief passages in reviews.