From employee to boss: What it means to quit the public sector for a staff-led company

By Oliver Cappleman, director, Mutual Ventures

We know adult social care services are facing a crisis. Over the past five years years, 31% has been cut from the budgets of local authority adults’ services, representing £4.6bn in real terms.

Councils have already pushed hard to squeeze as much efficiency as they can out of services, with some having to close down altogether. The result is 400,000 fewer people receiving social care services than in 2009-10 as reported by the Association of Directors of Adult Social Services.

So how are services responding? Many are looking at alternative delivery models, which will enable them to rethink services and have more control, such as local authority trading companies, staff-led mutuals and other forms of social enterprise.

Challenging process

But it is a challenging process with some risk attached.

Over the last year Mutual Ventures has supported two adult social care organisations, PossAbilities and Agewell, to set up as independent not-for-profit social enterprises. So, how have staff in these organisations found the change, what have the big challenges been and are they more optimistic about the future?

PossAbilities (formerly Rochdale adult social care services) is an independent community interest company owned by the staff group. It launched in April last year and has 200 members of staff.

Chief executive Rachel Law says they knew that their services would continue to come under severe financial pressure if they stayed as they were. In particular, they wanted the chance to win new contracts and move away from being reliant on a single funding source.

Staff-owned

The idea of becoming a staff-owned company was attractive because, as Rachel highlights, it would give staff more control and they could be more responsive.

So how did the team react?

Naturally, staff had concerns about their terms, conditions and pensions but were also worried that “running a business” might distract them from providing care. Whilst there are still a few members of the team who have found it difficult to come to terms with the move from the public sector, these fears have been largely laid to rest.

As well as a front-line staff representative on the board, the whole team are actively encouraged to come up with new ideas and initiatives. All ideas are presented to the board and some are then implemented. This ensures staff feel empowered and a part of the organisation.

Greater say

A percentage of budgets have also been given over to managers and staff so that they can determine priorities and spend, giving them a greater say in the running of the organisation. For example, recent decisions to invest in new facilities, such as a light stimulation room, have brought benefits to both staff and service users.

Rachel now feels the service is on a much firmer footing and they have moved from a position of having to make cuts to one where they are bidding to take over other services. Developing new services, such as supported holidays, has also helped to bring in new income.

All this has enabled PossAbilities to maintain staff terms and conditions, something that many other councils have struggled to do. Cost savings have also come from unexpected places, such as a huge reduction in staff sick leave.

Agewell (formerly part of the NHS in Sandwell delivering support services to older people) is another independent community interest company owned by the staff group. It’s a smaller organisation with nine staff but it has a network of 25 active volunteers and more than 2,000 local members.

Juggling business and day job

As Agewell’s chief executive Deb Harrold says the big question was whether they could handle doing a business plan as well as getting on with the “day job”.

When Mutual Ventures started working with Deb and her team, we stressed the importance of thinking through all the stages of the transition. We helped to draw out and shape their ideas, supporting them to write a robust business plan with a budget that showed Agewell could be sustainable. It soon became apparent that there was quite a bit of entrepreneurial flair within the team.

One of the most common concerns that staff often raise is whether running a business will distract from the important job of delivering services. Deb says that the whole team were determined to keep the focus on supporting older people and this is now firmly locked into the new organisation’s vision and values.

Liberating process

She describes the process as ‘liberating’ and never feels that they lost sight of their vision during the process. Their wealth of knowledge of the needs of local older people informs their services at every step, and they have been able to grow through securing council grant funding for two new services focused on people aged 65 and over.

As a result, Agewell has retained all of the original staff and recruited four new team members.

While a new delivery model won’t be the answer for every service facing challenges, for some it can be a way to preserve and grow services. Getting staff involved early on and addressing any concerns can make a real difference and ensure that the team feels part of the process.

Oliver Cappleman is a director of Mutual Ventures