An on-going assessment of the state of the spin-out sector in England

The provision of public services in England has received large amounts of policy attention over the last three decades. During this time there have been numerous and far-reaching public-sector reforms, which have resulted in less direct provision of public services by Local Authorities and an increased ‘marketisation’ of the public sector. However, whilst the spin-out sector in England is heterogeneous, much of the prior research on spin-outs is sector specific. Additionally, the growth of spin-outs, their ability to become sustainable and theory explaining the spin-out process has received little or no academic inquiry. This paper reports the initial analysis of survey data gathered in 2014 into the spin-out sector in England. A total of 201 spin-out organisations were identified and invited to participate, of which 66 responded. The data analysis revealed that the spin-out sector was growing in relation to turnover, profits and staffing levels and that this growth was mediated by the type of business model adopted. In addition, the role and importance of different stakeholders in the spin-out process was identified as in flux over time, with service-staff and service-users becoming more important the longer that the spin-out had been independent. The results are discussed in relation to the prior literature and data gathered in a 2013 survey

Public service spin-outs in the UK: towards a theoretical understanding of the spin-out process

Since the election of the Labour government in 1997 and its vision of the ‘Third Way’, the UK government has been keen to support social enterprise and to utilise the third sector in welfare delivery. Over the past few years the policy environment in the UK has sought to encourage public sector workers to ‘spin-out’ the services that they deliver into social enterprises. The research reported in this paper draws on semi-structured interviews with eleven representatives across four local authorities (LA) in the UK that are spinning out a public service into a social enterprise. The services being spun out operate across four different sectors, which allows the research to identify the common experiences and barriers in spinning out. The analysis is underpinned by a theoretical model of public/third sector collaboration by Takahashi and Smutny’s (2002), later adapted by Cornforth et al (2013). We present an alternative version of this framework based on public sector spin outs. In doing so, the research identified that there are significant barriers facing public services that seek to spin-out as social enterprises and the challenges that this brings to LAs in relation to managing the process. Issues around the sustainability of the ‘business case’ of the spin-outs proved to be the main problem, along with the difficulties of maintaining service provision during the transition phas

Big Potential Breakthrough evaluation report: Year 2

Year 3 evaluation report for the Big Lottery Fund's Big Potential Breakthrough programme

The UK’s first professional symphony orchestra cooperative: social enterprise?

This conference paper reports the results of the first phase of a three phase longitudinal research study designed to examine the initiation and development of the UK‟s first professional symphony orchestra cooperative. Semi-structured interviews were conducted with thirty six professional musicians from a "pool" of forty plus musicians. This "pool" of musicians provides the cooperative with a resource that can be drawn on to form an orchestra to rehearse for and perform concerts and recordings. Preliminary results reveal four themes that emerged from the semi-structured interview data. These themes were interpreted by the researchers as: "commitment", "democracy", "social mission" and "aesthetic aspirations". The themes are presented along with supporting quotations from the interview data that illustrate the characteristics of these four emergent themes. The implications of the themes are then discussed within the context of the prior literature reviewe

Investigating an ‘institutional partnership’ collaborating to develop a funded project into a sustainable work-integration social enterprise (WISE)

This paper reports a research study that examined a partnership between a regional social enterprise development agency and a university as they collaborated to develop a work-integration social enterprise (WISE) in the UK. Participants were members of the board of directors, steering group and the programme delivery and administration staff. The research elicited participant perceptions of the development of the partnership and the WISE over a period of eighteen months. Semi-structured interviews were conducted with participants in three phases: ‘early’, ‘middle’ and ‘late’. Results revealed the problems experienced by the partnership, which ultimately inhibited the development of a sustainable WIS

Assessing the state of the spin-out sector in England

The provision of public services in England has received large amounts of policy attention over the last three decades. During this time there have been numerous and far-reaching reforms to the public sector in England, which have resulted in less direct provision of public services by Local Authorities and an increased ‘marketisation’ of the public sector (Hall et al., 2012b; Simmons, 2008). This marketisation of public services has been led by a desire to create more cost-efficient services that are also responsive to service user’s needs. This reform is being driven by central government, which is using funding reforms and legislation to create greater public choice in the services that they use and the providers that they ‘buy’ these services from. In doing so, the government have encouraged the transfer of Local Authority staff into new provider and employee-owned mutual organisations (also known as ‘spin-outs’). ‘Public service mutuals’ have been defined as ‘…organisations which have left the public sector i.e. spun out, but continue to deliver public services and in which employee control plays a significant role in their operation’ (LeGrand and Mutuals Taskforce, 2012:9). Prior research exploring the spin-out sector has identified that policy initiatives such as ‘Right to Request’, ‘Right to Provide’ and ‘Mutual Pathfinders’ are having an impact and increasing the number of spin-outs from the public sector (Miller et al., 2012a; Cabinet Office, 2011). Spin-outs are seen as enabling services to be made more efficient and responsive to user’s needs, whilst at the same time reducing public expenditure (Addicott, 2011; Hall et al., 2012b; Alcock et al., 2012). However, much of the prior research on spin-outs is sector focused (i.e. exploring health and social care spin-outs only), whilst the spin-out sector in England is heterogeneous and includes leisure trusts, housing associations and employment services. There remains a limited amount of academic research that approaches the sector as a whole and that seeks to uncover common barriers to spinning-out and the challenges facing new and existing spin-outs. This research undertook a review of secondary literature in order to identify potential spin-outs and then invited the 210 organisations identified to participate in an online survey (of which 59 have responded to date). The online survey explored organisational demographics, the policy process adopted in spinning-out, the perceptions of future challenges and the ‘fit’ of commissioning frameworks. The results revealed that the spin-out sector is experiencing growth and that government policy initiatives are having partial success in promoting spin-outs. The research also revealed that the most significant challenge facing spin-outs in the future is related to access to finance and ‘payment by results’ contracting. Finally, the data also suggests that the greatest growth is experienced by those spin-outs that trade directly with consumers and that receive repayable investmen

Investigating the outcome performance of work-integration social enterprises (WISEs): do WISEs offer ‘added value’ to NEETs?

This study takes a comparative approach to study the ‘outcome’ performance of a WISE and a ‘for-profit’ work-integration organisation that both provided employment enhancement programmes to NEETs. Participants at both organisations completed general self-efficacy questionnaires before and after engagement on the programmes. Additionally, semi-structured interviews and focus groups were held with the owners and staff at both organisations. Results revealed no significant difference between the ‘outcome’ performance of the WISE and for-profit organisation. However, analysis of the organisational aims, values and structures suggests that the ‘added value’ offered by the WISE came from the different induction policy that it operate

What are the barriers to investing in social enterprises? An investigation into the attitudes and experiences of social entrepreneurs in the United Kingdom

The ongoing global economic crisis and the restrictions that this is having on government expenditure has meant that current UK policy is being directed at trying to end the grant dependency that currently exists in the third sector. One of the key focuses of this policy initiative has been to try to increase the third sector’s access to both debt finance from lending institutions and equity finance from venture capital investors. However, this policy intervention presupposes that the lack of private sector investment in the third sector is a ‘supply-side’ problem caused by limited funds. This ignores the structural problems in the social enterprise sector related to governance and a lack of organisational capacity. Indeed, as of 2011 the ethical investment sector in the UK was worth approximately £9 billion and was spread across 90 ethical investment funds responsible to 700,000 investors. Additionally, social investment (i.e. those funds targeted specifically at third sector organisations) was worth £165 million as of 2011. This suggests that the lack of private sector investment in social enterprises in the UK is not a ‘supply’ side problem but is instead related to the ‘investment readiness’ of social enterprise

Reintegrating socially excluded individuals through a social enterprise intervention

This research project reveals participant perceptions of an employment enhancement programme, run by a social enterprise and designed to reintegrate socially excluded individuals into society. The research participants were the social entrepreneur, staff at the social enterprise, the programme attendees and a representative from an external referral agency. Participants engaged in semi-structured interviews with a researcher designed to elicit participant perceptions of the programme. Results of the analysis of the interviews revealed six emergent themes that were interpreted by the researchers as: ‘social mission focus’, ‘heroic social entrepreneur’, ‘social impact’, ‘recidivism’, ‘the programme’ and ‘programme attendees’. Results of the analysis reveal that all research participants reported the programme helped to re-socialise the programme attendees and increased their self-confidence and self-esteem. Participants also believed programme attendees acquired important skills and qualifications in general warehouse activities and forklift truck driving, which would greatly increase their future employability. Programme attendees indicated the ‘real world’ working environment was important to their feelings of success on the programme. Social enterprise staff expressed concerns about potential ‘mission drift’ resulting from the demands of scaling up the logistics business to achieve the ‘double bottom line’