Public service entrepreneurship: a quiet revolution

Director of Mutual Ventures Andrew Laird urges those delivering public services to push back against the layers of red tape associated with top down budget decisions and to start thinking and acting like entrepreneurs.

As one would expect, there was a mixed reaction to the election results. However, the quick establishment of a government is good news for one policy area where there was genuine cross party support i.e. the encouragement of public service mutuals. The Conservative manifesto was pretty clear in its support for these new models…

"We have supported the growth of public service mutuals – organisations that are owned by their staff and deliver public services. We want more of them, so we will guarantee a ‘right to mutualise’ within the public sector. This will free up the entrepreneurial spirit of public servants and yield better value for money for taxpayers."

This is part of a broader agenda. If public services are to face the twin challenges of reducing budgets and ever increasing service user expectations then we need to encourage those delivering public services to think and act like entrepreneurs. 

I would define public service entrepreneurship as the combination of a strong public service ethos with disciplines of the commercial sector – it is the quest to maximise a service’s potential through empowering staff, engaging more effectively with service users, allowing flexibility in the delivery of services and encouraging the development of new and innovative approaches.

We want public service leaders and their staff teams to take control of their own destiny and that of their service – rather than just succumbing to top down budget decisions.

It’s difficult to achieve this within the traditional bureaucratic structures of the public sector. Years of red tape layered upon red tape can discourage staff from any sort of fresh thinking. To escape this, many services will need to focus on identifying, designing and implementing the right delivery model and also embedding the right systems and culture.

It’s possible to move towards this whilst still within the public sector but moving to a new, more independent model (like public service mutuals or other forms of social enterprise) can get rid of much of this red tape in one fell swoop and allow staff to be much more entrepreneurial. 

This can have a great localised benefit for the staff and users of a service but it also contributes to an important macro level rebalancing… at present the public services market is dominated by in-house state delivery and traditional out-sourcing to large scale private/third sector providers.

Over the last number of years there has been an emergence of a new breed of organisation formed by services “spinning-out” from a public body and then contracting back to deliver services. These organisations occupy the fertile middle ground between state and traditional private sector and are the natural home for the public service entrepreneur. They have the strong public character but also employ the commercial discipline of the private sector. Profits are encouraged (as good commercial practice) but are usually entirely reinvested for the public good. 

Options range from large scale trading companies which are wholly owned by their public sector parent companies (e.g. Achieving for Children – a joint venture between Kingston and Richmond councils to deliver children’s services) to small staff and community owned mutuals (e.g. Explore - a community benefit society delivering York Libraries and Archives service).

Over the coming weeks through a series on Pioneers Post, Mutual Ventures will be exploring the characteristics of this new breed of public service organisation and the role they will increasingly play. Topics covered will include:

Entrepreneurship – services need to be able to move with more agility to respond to user needs. Successful organisations have a tolerance of failure in a controlled manner – new approaches can be “prototyped” and then the lessons learned.

Increasing staff engagement and empowerment – there is plenty of evidence to suggest that models which empower staff to use their professional judgement lead to increased levels of commitment, better customer service and more innovation. In short, having happy staff leads to happy service users.

Better integration of services – this is particularly relevant in the health and social care sector where there is an increasing focus on integration of services. New delivery models which can be jointly commissioned by Clinical Commissioning Groups (CCGs) and Local Authorities allow service leads to plan across an entire pathway.

Reducing the financial burden on the parent body – it can be possible to protect services through making operational savings and increasing traded income via a new delivery model. Empowered staff are motivated to look for efficiencies and (where appropriate) additional income streams.

Public service entrepreneurship will not arrive with a bang. It will be a quiet revolution building momentum one service at a time. It’s time we got started!


Photo credit: Susanne Nilsson