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Quick Guide

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Welcome to this Pioneers Post Quick Guide – one of an ongoing series that we are developing with expert partners across the social innovation space.

The Pioneers Post Quick Guides provide a quick and easy digest to key topics in social innovation. They are a distillation rather than a comprehensive guide – you can read them in 10-15 minutes, get a good idea of the essential issues and find signposts for where to go for more information.

The guides are written by experts in their fields, and supported by a number of partners in the social innovation marketplace. If you’d be interested in writing or supporting a Quick Guide, please get in touch with us via email or phone: publications@pioneerspost.com, 020 8533 8892

Other guides in the series include A Quick Guide to Social Value.

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SOCIAL VALUE

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WhAt Are the QuicK GuiDeS?

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The journey To becoming apublic service mutual

ecognising that there is no one-size-fits-all approach when it comes to delivering public services to diverse communities, the government is

proactively building on the success of the Department of Health’s “Right to Request” programme and the supporting Social Enterprise Investment Fund (SEIF), the combination of which allowed NHS and social care staff groups to move out of the public sector into their own independent enterprises. This opportunity has been extended within these and other areas of public services through the “Right to Provide” and “Right to Challenge” programmes and through the Cabinet Office’s Mutuals Support Programme.

There are now great opportunities for groups of staff from across the public sector to create their own mutuals and other forms of social enterprises. Like any worthwhile journey, the journey to independence is not without challenges and it can seem daunting.

However, many success stories have already emerged such as Social Adventures in Salford which provides public health support services, and Evolve YP in Staffordshire, which delivers social care services for children and young people. These and other organisations are providing the inspiration for future groups to embark on the journey.

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e have supported both Social Adventures and Evolve YP and they are demonstrating that mutuals can deliver substantial benefits to a wide range of stakeholders,

including: service users who receive higher quality services, commissioners who can get better value for money, and employees who feel more empowered, committed (often being a part owner of the organisation) and experience a higher level of job satisfaction. Benefits include: higher flexibility enabling more responsive and personalised services; more innovative and creative services; increased stakeholder engagement; greater resilience in times of crisis, greater productivity and lower staff absenteeism, etc. However, the journey of creating a mutual is not without its risks and anyone starting this journey should plan the process carefully to avoid potential pitfalls.

WWIs thIs challenge for you?

Initially, this supported opportunity was limited to staff working in health and social care. Recognising the benefits of this form of delivery, the government has extended its support to many more services, including: adult & community learning services; culture & libraries; fire and rescue authorities; children & youth services; leisure services; criminal justice; environment; and housing services.

It is important, however, that you are able to present a strong case to your parent organisation, as you will have to evidence that you will not only offer savings to the taxpayer, but you will also improve the quality of services provided.

To help you take an informed decision, see our guide or contact us to arrange a free initial discussion at info@mutualventures.co.uk or check out our website www.mutualventures.co.uk for some real case studies

the biG iDeA: unDerStAnDinG the StAKeS, benefitS AnD riSKS

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efining a common vision is probably the most important thing you will have to do and should come right at the start of the process. This will provide your staff

and other stakeholders with an insight into where you’re heading. If you don’t know where you’re planning to go, you’re unlikely to get there… Your vision should be short, inspirational and directly referring to the positive social and/or environmental impact you’re aiming to achieve.

Building a strong leadership team should also be a priority. Some might be better at the development or operational side of the organisation, others at advocating for your organisation or building partnerships and selling your services. These skill sets and others are required, and it is important to keep in mind that a combination of strengths and personality will ensure the success of your mutual. Sometimes, it means that you might consider accessing the necessary skills or extra capacity externally by partnering or even creating a joint venture with another provider.

Moving away from the public sector requires a strong change in relationships and might create some misunderstandings, mistrust or concerns. Identifying, understanding and engaging with your stakeholders is a key step in the process: it is important to keep the dialogue open with your colleagues, service users, unions, media and other relevant third parties to ensure the smoothest transition possible.

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your market: By scoping your market, you will need to assess what services are needed, as well as identify customers (who is ready to pay for your services?) as well as potential competitors (who already provides similar services?) and partners (who might you work with?). Once you’ve understood the market, you will need to develop a marketing and communications strategy which will include a clear brand for you organisation and ensure that the right people know about you.

froM iDeA to reAlity: GettinG your buSineSS plAn into ShApe

Y our business plan is the roadmap for your new organisation. It describes the key features of your idea, answering the basic questions: What do you want to do? Why do you want to do it? And how are you going to do it? It is likely that your business plan will be shared in some form with all

stakeholders; therefore it is a highly important document. In your business plan, you will not only share your vision and present your team but you will also define your services, resources, finances, governance and legal structure.

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your servIces: Describe the services you are planning to provide, which factor in both the market assessment (above) and also your track record and the skills and experience of your team. You will also need to develop a charging mechanism for each service – for instance, are they paid for in advance or on an ad hoc basis? The services you will provide may differ from current services as you are aiming to deliver them more efficiently and with the aim to improve the outcomes to your community.

your resources: As you develop your services and how you will deliver them, you will need to consider the practicalities of how you will do it: would you need premises? If so which ones are the most appropriate to provide a greater positive impact on your community? Other resources might include equipment, technology, back office support, etc. It might be appropriate to have existing assets transferred to your organisation. In that case, you will have to provide a guarantee that the asset transferred will be for the benefit for the community (eg having an asset lock feature in your constitution).

your fInances: Before going too far in your plans, you will need to ensure that your new venture will be financially viable. Your potential sources of income will need to at least cover your operating costs but in reality successful organisations try to build up a buffer through generating a surplus which acts as a guard against times when things aren’t going so well. Therefore it is important to start a list of all potential costs you might face (whether they are one off costs or recurrent costs). Then you will need to look at income potential and income diversification (to avoid being over-reliant on one client). When running your organisation, your cash might flow out before flowing in, and you might need some money to cover this gap called “working capital”. You might also require a loan to invest in a new building, for instance. A wide variety of financial options are available to mutuals, depending on their stage of development.

More information on how to finance a mutual can be found within Social Finance's guide:

'Financing New Employee Mutuals'

your legal structure: Finally, you will have to decide on your business form. Many think this should be the first step, but you need to think about what you aim to deliver and how, your governance model, your income generation model and so on, before you can effectively decide which legal form to choose. Otherwise, you might end up being constrained in your trading activity. It is highly recommended to consult a legal advisor to decide on the most appropriate structures: options include Community Benefit Society, limited companies and CiCs, with varied forms within them.

For more information on legal models see Bates Wells & Braithwaite's 'Keeping it Legal' guide, and the dedicated

website created by NCVO and BWB: www.getlegal.org.uk

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GooD lucK!

We have provided a basic introduction for anyone thinking of moving towards a public service mutual model. As the process is highly strategic and the transition planning can be complicated, it is important to find a mentor or advisor who has been through the full process already, in order to support you in this challenging period. Contact Mutual Ventures or other specialist advisers to help you start your journey!

andrew laIrd Director, Mutual Venturesanne-helene sInha Consultant, Mutual Ventures

www.mutualventures.co.uk

nce you’ve got your plan, your team and your resources organised, there are usually still some challenges to overcome, such as the transfer of staff, especially looking at the implications

for their employment rights and pension entitlements. You will also need to understand thoroughly the requirements for bidding for public contracts. Indeed, your parent organisation may have to organise a formal tender procedure to meet the legal requirements. Ideally find a coach / mentor who can guide you through your first bidding process, as making simple mistakes or omitting required information can result in your disqualification from the tender process. There are also a number of (often time consuming) activities to undertake around the legal set up of your organisation (governing documents, etc) as well as appointing directors and basic financial tasks such as setting up a bank account and registering with HMRC.

For financial support, at the early stages of your venture, you might be eligible to access some funding or investment, for example:

• Grants from the Social Enterprise Investment Fund (SEIF). Established in 2007 by the Department of Health, it has invested in over 600 projects in the health and social care sector with investments ranging from £4,000 to £6.7 million. Visit the SIB Group website for more information.

www.sibgroup.org.uk

• Mutuals Support Programme (MSP) – Established in December 2011 by the Cabinet Office, the programme provides advice and signposting through a website and helpline as well as a £10m fund for accessing bespoke support. Visit the MIS website for more information.

http://mutuals.cabinetoffice.gov.uk

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THANKS FOR READING!

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if you enjoyed this why not have a look at our

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About MutuAl VentureS

Mutual Ventures is dedicated to efficiency, innovation and sustainability in public services. In short, we’re about creating better models for better services.

We work with local authorities, NHS organisations and other public service bodies on both strategy and implementation, including the feasibility and development of staff-led mutuals and community social enterprises.

Our team provides hands-on support to commissioners and front line teams through the entire journey from options appraisal and business planning through to transition and launch. We also provide advice on effective commissioning for economic and social value and on ongoing performance improvement services.

www.mutualventures.co.uk

Matter&Co works with inspiring organisations across business and society to build success through powerful marketing and communications. In addition to its consultancy work (for clients such as Deloitte, CCLA, RBS, UnLtd and several charities, social investors and housing associations), Matter&Co is the organisation behind Good Deals, the UK’s leading social investment conference (www.good-dealsuk.com); the creator of the RBS SE100 Index (www.se100.net) and runs its own online newspaper and networking platform dedicated to building and supporting the social innovation marketplace (www.pioneerspost.com).

www.matterandco.com

About MAtter&co

Pioneers Post is an ambitious new online newspaper and communications platform for everyone doing brilliant business to drive positive social change, across sectors and across the globe.

Reaching well over 30,000 people every month through its website, e-newsletter and social media, the platform offers news, views, debates, analysis and advice from brilliant innovators, entrepreneurs, investors and thought leaders across the social innovation space – as well as a dedicated TV channel (Pioneers Post TV), a venture platform to pitch investment and business ideas, and the Pioneers Post Business School to help spread learning and good practice.

Pioneers Post builds on a decade of specialist reporting and knowledge – and many thousands of articles and videos – through its predecessors Social Enterprise magazine and SocialEnterpriseLive.com.

www.pioneerspost.com

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