August 25, 2012

Non-Profit Spotlight: HCT Group's Experience with Service Transfer

UNITED KINGDOM - The Big Society was a policy put forth by the David Cameron Conservatives during the 2010 UK General Election from which a Conservative-Liberal Democrat Coalition government was formed. The Big Society became part of the formal agreement between the two parties to share power. The Big Society is about the devolving of powers away from central government to local government. It means local government will have to take on new roles and form new partnerships with business and the community to deliver public services. It will mean more people volunteering. It will mean more communities and neighborhoods doing more for themselves. And it will mean a growth in the third sector of the economy: charities, co-operative, mutual societies, and social enterprises will be instrumental in the transfer of services from the central government to the local and into the community.

The Big Society is not a new idea. Government decentralizing in the UK has been going on since the 1980's when Margaret Thatcher was in power. It was during this period that Hackney Community Transport (HCT) began to experience a noticible decline and instability of funding from the local government council they were contracted to provide wheelchair accessible community transportation services for. Rather than continue to be reliant on government or the proceeds from chaitable donations, HCT chose the path of social enterprise. They would operate as a business by providing public transportation services that the government was divesting itself of, but unlike a for-profit company, it would re-invest the surplass money back into their core community work.

The following 3-part video features Dia Powell, CEO of HCT Group in conversation with Tom Archer of Fiery Spirits discussing HTC's experience over the last 2 decades with service transfer. Service transfer involves the effective and orderly transfer of public services from local authorities to innovative new partnerships with the third sector. As a social enterprise, HCT has been at the forefront of service transfer and knows well the challenges and potential of the transfer of services. For example, one of the biggest concerns involves transfer of employees from the public to the third sector, and in particular: pensions. Dai Powell shares their experience with TUPE (Transfer of Undertakings and Protection of Employment Regulations), the UK's labour law that deals with all aspects of this including pensions. On the whole, Powell has found that the transfered employees find new freedom and empowerment within the culture of a social enterprise.

Another example concerns a government contract that HCT had entered into with a local council. Part way through the length of the contract, an opportunity presented itself that would mean large cost savings in the provision of the service. Rather than keep the profits for themselves, HTC re-negotiated the contract which represented a cost savings for the local governing authority and allowed HTC to hire more staff to further improve and personalize service. You can do that, says Powell because both the public sector and social enterprise share the same "ethos, the same values."

To learn more see: Social Enterprises - A Guide for Voluntary and Community Sector Groups on How to Set Up a Social Enterprise to Run Public Services (48 page pdf), The Clock is Ticking on Cameron's Big Society by Dai Powell, and my earlier blog post on HCT Group.

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