Public service 'spin outs'

One of the government's earliest moves in reforming public services has been to encourage public sector staff to 'spin out' from the state and form employee-led, mutual service delivery organisations. Earlier this month the Cabinet Office announced a 'first wave' of these mutuals – 12 fledgling organisations working in fields as diverse as children's services, health and social care, housing support, education and youth services. The government's ambitions, set out in the coalition agreement, are that ultimately such reforms will "empower millions of public sector workers to become their own boss and help them to deliver better services". This ought to be good news. Giving front-line staff the opportunity to put their understanding of what works at the heart of service delivery ought to lead to higher quality and efficiency. Freeing delivery organisations from the diktat of Whitehall or town hall ought to make space for greater flexibility and innovation. The new spin-outs ought, over time, to bring to service delivery many of the qualities associated with existing third sector providers – qualities that have led governments of all colours to court the third sector for years. In practice, however, things might not be so rosy. There is a danger that if not implemented with care, rather than unleashing the initiative for transformation, the enthusiasm for mutual spin-outs could lock in the status quo. The public service ecosystem Firstly, we need to ensure that the new mutual organisations change more than just the name above the office doors. They need to deliver services in a different way, and work differently with service users and with other organisations in the public service ecosystem. That kind of change of model and culture will be difficult to achieve. It will require the right support and the right incentives. On the support front, the government's first wave of mutual spin outs will get (unfunded) support from other organisations that they have been paired with. As for incentives, the hope is that frontline workers' desire to do things differently (and at a later date, competition to deliver) will be impetus enough. But as we move from 'first wave' to second and third, as the energy of the new dissipates, as the support on offer thins out, and as other motives enter into play (is it inconceivable, for instance, that some public sector agencies will see this as a useful way to shed expensive staff and assets?), it will become increasingly difficult to ensure that there is enough reformist impetus behind mutual spin-outs to make for real change. Secondly, part of the government's critique of the current state of public services – a critique that has laid behind the foundation and growth of many third sector organisations – is that in too many of our public services professionals have been on top not on tap, working out what's best for their passive service users and then proceeding to do it unto them. Empowerment of service users What third sector organisations have sought for decades to do in response, and what the government has called for services to do across the board, is to put people first, at the heart of and in control of the services they use. The empowerment of public sector staff through these new mutuals is a good thing. But it must be accompanied by empowerment of service users, or else we risk entrenching one of the key problems at the heart of the welfare state. Finally, there is a danger that the new mutuals will not just lock in existing problems, but that they will lock out other solutions as well. For the new spin-outs to incubate successfully, they are likely to be guaranteed business from the state for a period (under the Department of Health's existing spin-out policy, that period is three to five years). Put another way, every spin-out locks out competition from other providers in the third and private sectors for the rest of this parliament. Given the issues outlined above and the urgency with which we need to transform services, that is a big risk to take. The new mutuals are a good thing. Third sector organisations will need to welcome them into our midst, and work with them to ensure they are a success. But they are not the magic bullet. The spinning out of public sector staff will have its limits, and it will need to be implemented with care. Ralph Michell is head of policy of ACEVO , the Association of chief executives of voluntary organisations