Maude calls on entrepreneurs to shake up public services

The government may be resting its hopes for rejuvenating public service delivery on just 630 people. That's the number of "latent entrepreneurs" within the public sector that Francis Maude, minister for the Cabinet Office, yesterday said he would be happy with if they come forward to set up new organisations, such as social enterprises, to deliver public services. The government is keen to encourage more staff inside the public sector to spin out into new organisations and in August announced its first wave of fledgling public service spin-offs, called Pathfinders. Suggestions At the time, Maude said that the government's website asking for suggestions on service reform had "unleashed a torrent" of ideas and comments from public sector workers and added: "If only a fraction of these 63,000 people are latent entrepreneurs, who itch to put their ideas into action, then our ambitions for public sector mutuals will be amply met." Yesterday, at a visit to a community hospital in Leatherhead run by Central Surrey Health, one of the first social enterprises to take over public services, set up under the previous government, Maude said that if only 1% of those public sector workers - 630 staff - were motivated to set up new enterprises, that would be welcome. Maude said the launch of the first Pathfinder mutual organisations was an exciting move. "Basically, this is about the same people doing the same work, but thinking in a different way," he said. "They don't have a financial interest in making more of a surplus or cutting costs. It's about how people feel differently." The Pathfinder organisations have been given no cash support so far by the government, but a number of mentors, including Central Surrey Health, have been put in place to give them advice and guidance. Maude said that he hopes the introduction of more social enterprises to run public services will result in a "rich and varied landscape" of provision. He accepted that it would be "slightly anarchic" and that it will lead to disparities in services in different areas. "There will be variation, as there is now," he said. Number of issues need tackling Ian Church, chair of Central Surrey Health, said there are still a number of issues that need tackling in order to encourage greater spin-out of public services into social enterprises, including the question of pensions for existing and future employees in social enterprises and the fact that social enterprises, unlike their NHS counterparts, have to pay corporation tax and VAT. "VAT and corporation tax are not immediate barriers to entry, but they do hold back reinvestment, at a time when funding is difficult," he said. Church pointed out that social enterprises like Central Surrey Health within commuting distance of London have to compete for staff both with neighbouring NHS bodies and with commercial businesses in London. He welcomed the government's review of public sector pensions, which is being headed by John Hutton and which is due to release its interim report any day now.