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Spending cuts blamed for Connaught's collapse

Wed, 08 Sep 2010 10:46:56 GMT

As the social housing firm struggles to stay afloat amid speculation it could be placed into administration today, fears grow for the fate of its 10,000 workforce and contracts with other firms

Social housing firm Connaught looked to be on the brink of collapse today after lenders refused to offer additional support to the stricken company.

The Exeter-based repair and maintenance specialist has been in turmoil since its June warning that government spending cuts could blow a £200m hole in revenues over this year and next.

Amid speculation that it could be placed into administration as early as today, Connaught requested the suspension of trading in its shares and said a solution to its funding issues was "increasingly uncertain".

It is in discussions with other parties but added that its lenders were unlikely to provide additional funds.

The firm, which employs 10,000 people and has around 180 multimillion-pound social housing contracts in the UK, has been in talks with its lenders after a review identified an "urgent requirement" for additional funds to meet current and ongoing business, in part due to pressure from suppliers and contractors.

Politicians and union leaders expressed concerns for the hundreds of South Wales workers employed by the firm. It maintains council houses and housing association stock, and has a Caerphilly division where it acquired health and safety compliance firm National Britannia around three years ago.

Connaught also has a training division in Caerphilly, where people can gain qualifications through apprenticeship schemes.

Caerphilly MP Wayne David said he was concerned for workers employed by the firm.

"Connaught is a quality provider of training and has a good reputation and I would be sorry for both people it provides skills training to and people it employs as well," he said.

Royal Bank of Scotland recently provided Connaught with a further £15m in an attempt to keep the group going, the BBC said today.

Until their suspension today, the company's shares had fallen by more than 90% following the warning in June that it had identified 31 projects where spending will be delayed as a result of austerity measures, wiping £80m off revenues and £13m from underlying profits in this financial year.

Sales and profits were also expected to fall by a further £120m and £16m respectively next year, it added. Connaught's debts were estimated to be in region of £220m.

Founder Mark Tincknell left the company earlier this year on health grounds less than six months into his second spell as chief executive.

Managers of volunteers undervalued and underfunded

Tue, 07 Sep 2010 07:42:00 GMT

A new report commissioned by Skills - Third Sector calls for more training and support for people who manage volunteers

A new report published today reveals the need for more training and development for managers of volunteers.

The report, Valuing Volunteer Management, canvassed opinion from over 1,000 third sector organisations, and was commissioned by Skills -Third Sector, the charity working to make it easier for people in charities and social enterprises to recruit people with the right skills.

It shows that nearly half of people who manage volunteers have not received any training that would help them in their work, despite the fact that volunteers are crucial to the government's 'Big Society'.

Charities minister Nick Hurd, in the report's foreword, says: "However, it also highlights the skills needed and the importance of valuing them. It also highlights the need to think strategically about how volunteer managers are trained and supported.

This is vital, whether they are engaged in work to empower and enhance their local communities or to deliver complex public services."
Despite identifying that there is much good practice in volunteer management in England today, the report also claims that volunteer management remains undervalued and underfunded in many organisations, including those with the largest incomes.

Justin Davis Smith, chief executive of Volunteering England, said: "Volunteer managers play a crucial role supporting the 17 million individuals who volunteer through an organisation each year. This report highlights the need for better access to training and development for volunteer managers so that the full benefits of volunteering to local communities can be realised."

A full version of the report can be downloaded here

Welsh Assembly staff lose more than 50 laptops and mobile phones

Mon, 06 Sep 2010 10:40:06 GMT

Warning for mobile workforces as recent findings under Freedom of Information Act reveal huge security holes in Cardiff

A security expert has called for public sector organisations to be more careful with its information after findings under the Freedom of Information Act have revealed that since June 2008 Welsh Assembly staff have lost or had stolen technology equipment valued at £21,000.

In this period it was revealed that 24 office-issue laptops worth £800 each and 30 mobile devices, such as phones or smartphones, went missing.

Three laptops and four mobile devices were subsequently found and returned. The Welsh Assembly has issued a total of 2,300 office laptops to staff and 2,950 mobile devices, the majority being mobile phones.

A spokesman for the Assembly said one member of staff has been disciplined and as part of its IT rules and guidelines staff must inform immediately the information security team if any device is lost or stolen.

No staff member has been asked to pay for any loss of equipment, and it is not clear if any of the devices contained sensitive data.

Dr Bjoern Rupp, of GSMK CryptoPhone said: "With an increasingly mobile workforce it's unavoidable that devices will end up lost or stolen. However, government laptops and phones contain a wealth of sensitive information and losing just one device is the equivalent of losing a whole filing cabinet of confidential data. The simple solution for preventing this information falling into the hands of fraudsters is to adopt encrypted secure storage for contacts, notes, schedules and call history on all mobile devices. Following a private sector call to action, many governments have realised this huge security hole and have begun to equip staff with secured devices."

Acevo calls on government to scrap 'fair deal' guidance

Jo Adetunji — Fri, 03 Sep 2010 07:48:00 GMT

Association of Chief Executives of Voluntary Organisations, in a letter sent to pensions minister John Hutton, says two-tiered workforces have serious implications for charities running public services

Charity leaders have drafted a letter to the government calling for it to scrap the rules on public service pensions and widen the debate around two-tiered workforces.

The letter, penned by the Association of Chief Executives of Voluntary Organisations (Acevo), and sent yesterday to John Hutton, head of the public sector pensions commission, calls for the government to scrap the "fair deal" guidance which guarantees an equivalent pension to staff working for outsourced public sector service providers.

Acevo says that the guidance acts as a barrier to more charities taking on the running of public services and risks derailing the Big Society. Under current rules, when a service is outsourced from the public sector, staff that transfer with that service are guaranteed a pension equivalent to that received under their public sector employer.

Acevo said it had penned the letter because the situation gave advantage to long standing providers of public services and excluded many charities from competing because they are unable to balance the books.

"This government has spoken of their real commitment to opening up the public service market and passion to build a 'Big Society' with charities playing a major role in public service delivery, but this guidance could act as a real barrier to them making their plans a reality," writes Acevo's chief executive, Stephen Bubb, who has also written to the chancellor George Osborne and Cabinet Office minister Francis Maude.

He adds: "Charity leaders also want a pensions system based on fairness. Staff delivering public services should have access to a decent pension, but not at the expense of public service users, many of whom are extremely vulnerable at a time of public spending cuts. Nor should it be at the expense of other staff working in the same organisations."

The letter adds another dimension to the debate surrounding the issue of benefits in two-tier workforces. While Maude said he was "minded" to abolish an informal agreement for benefits given to outsources private sector workers to reduce the cost of future outsourcing, this led to criticism from unions that individuals doing the same job could end up having different rates of pay and benefits and lead to more vulnerability for public sector workers.

But Acevo argues in its letter that the status quo has led to "staff transferred from the public sector receiving gold-plated pensions at the expense of others."

"We're not in this to lower people's pension or distort what people can get," says Peter Kyle, deputy chief executive at Acevo. "More charities will be competing for contracts and more people joining. Some people coming with exorbitant pensions which were negotiated decades earlier, which you wouldn't get if you were entering now. The cost of these teams are taken as a whole so the people with less are subsidising colleagues who have more. So if you're going to compete it makes it more difficult. What we're calling for is a rigorous debate because this isn't sustainable. It's a very complex landscape and every time the government tries to incentivise, they come up with short term fixes and this creates pile upon pile of difficulties.

"We want a wholesale look at the barriers. There's absolutely no doubt that the Big Society agenda would be affected by this."

Jo Adetunji

Crash course on shared services

Jo Adetunji — Thu, 02 Sep 2010 15:08:28 GMT

A course designed for senior managers is offering a post-graduate certificate in under two years

A postgraduate course with a focus on shared services in the public sector launches in October and course organisers say that in six months senior managers can get to grips with the skills they need.

"Many organisations in the public sector are looking at cutting budgets by sharing core elements of their back office processes, for example HR, finance and procurement services." says Wim van Vuuren, programme director at Canterbury Christ Church University.

"And most councils are moving a step further and considering sharing resources on a number of their statutory functions, for example planning, highways, building control and revenues and benefits."

Despite this, van Vuuren says, time is not on the public sector's side and while research carried out by the university suggests that the average time it takes to develop the skills and knowledge in shared services was around three years, the course – the first to offer the qualification in the UK – estimates a certificate is achievable in under two years.

"The problem is that we no longer have the luxury of three years," says van Vuuren. "So the six-month postgraduate certificate will equip managers in the public sector with the skills and knowledge to accelerate and deliver shared services more quickly."

The university teamed up with public sector education company Shared Service Architecture (SSA) to design the course, and believe that the training could save organisations more money in the long run.

"The three modules that make up the certificate will equip students with 70 highly practical tools, templates and techniques for rapidly developing shared service business cases in-house," says Dominic Wallace, director of learning and development at SSA.

"So for organisations that do not have money to burn on external consultancy, these tools, if applied properly, could save up to £25,000 on external consultancy cost per service being considered for sharing. If a council is considering half-a-dozen options that is over £100k."

The postgraduate certificate will start in late October 2010.

Jo Adetunji

Reform of services was 'bunkum', claims Blair

Jo Adetunji — Wed, 01 Sep 2010 14:38:11 GMT

Former prime minister reveals errors made in early days of New Labour as it tried to reform public services by concentrating on outputs instead of structures, particularly in the NHS

Former prime minister Tony Blair claims that New Labour's approach to reforming Britain's public services was "bunkum" in its early days of government.

In his much anticipated memoir, A Journey, which is published today, the former prime minister says that his government fell behind in the early stages of leadership because they focused on "standards not structures".

One of the areas where the fledgling government applied this approach was on NHS reform, Blair writes.

"We talked about it and agreed that we would work over the coming months to produce a proper, fully-fledged plan of transformation for the NHS. The aim should be to change fundamentally the way the NHS was run: to break up the monolith; to introduce a new relationship with the private sector; to import concepts of choice and competition; and to renegotiate the basic contracts of the professionals."

But he adds: "We were saying, forget about complex, institutional structural reforms; what counts is what works, and by that we meant outputs. This was fine as a piece of rhetoric; and positively beneficial as a piece of politics. Unfortunately, as I began to realise when experience started to shape our thinking, it was a bunkum as a piece of policy. The whole point is that structures beget standards. How service is configured affects outcomes."

While the ConservativeHome website says Blair's view on handling the deficit, spending and public service reform shows a backing for prime minister David Cameron's polices (and poses huge problems for the next Labour leadership), Guy Aitchison, co-editor of openDemocracy's UK blog, OurKingdom, calls Blair's claims that Gordon Brown failed to continue the market reforms of public services and stopped being New Labour as "nonsense."

"Although voters may think public services could do with "reform", they largely do not want private companies taking over provision," Aitchison says. "As has been noted in the leadership contest, between 1997 and 2010 Labour lost 5m votes, with only 1m going to the Tories. So the idea that not carrying out enough privatisation is what did it for Brown just doesn't add up."

Jo Adetunji

Taking Lasa to the next level

Jane Dudman — Wed, 01 Sep 2010 09:44:22 GMT

Jane Dudman interviews Terry Stokes, who takes up his post as chief executive of Lasa today

Q. What is Lasa and how does it fit into the government's Big Society idea?
A. London Advice Services Alliance (Lasa) is a charity: we provide a network of support for advice centres and voluntary agencies in London and the UK. We offer welfare rights advice, IT consultancy and support and help thousands of third sector organisations, such as Age Concern and Citizens Advice.
We're 26 years old but we operate behind-the-scenes so may be perceived as a "Cinderella" within the third sector. The idea of the 'Big Society' could really be in tune with Lasa's activity, but we are threatened with cuts from our funders including London Councils. The coalition government wants to provide more services through the voluntary sector and we are up for the challenge but we can't do this on a sixpence.

Q Today is your first day as new chief executive of Lasa. What's top of your to-do list?
A. First I will meet each of our 25 staff individually and talk about their ambitions for Lasa. Together we need to focus on the funding situation.
We knew funding would be tight in the coming year. On top of this the contracts we've had with London Councils are facing "repatriation". If money goes back into individual boroughs, the pot of charity funding across London shrinks. Our Rightsnet service alone is accessed by 4,000 organisations and we don't want to let them down. I'll be responding to the forthcoming London Councils consultation to explain this.

Q Why did you want this job?
A. I love Lasa and I believe passionately in the work we do. I've worked my way up and as chief executive I'll take Lasa to the next level. We have big exciting ambitions here: we are already sharing expertise with partners in the United States, Australia and Europe. We support Martha Lane-Fox's ambitions for a networked nation. Instead of chasing funding pots we'd prefer to focus on supporting the relief of poverty. We do this by providing charities with welfare rights advice and innovative ICT.

Q What do you think will be your biggest leadership challenges in the next 12 months?
A. Money, without a doubt. We can't get demoralised though, we'll carry each other through the lean times.

Q What skills do you bring to the post?
A. I know and love what I do. I've worked for Lasa since 1998, firstly as project manager of Rightsnet and I've been director of services since 2003. So I've managed and understand both the welfare advice and the IT sides of Lasa. My team tell me that I bring calm and humour to the working day and I'm fearless in moving the organisation forward.

Q What is your leadership style?
A. I have a 'go for it' approach, I'm not afraid of big decisions. We work together at Lasa, sharing ideas, our staff are the most valuable asset we have.

Q What's the best piece of management advice you've been given?
A. "It's kind of fun to do the impossible" is a phrase pinned up on our office wall and we secured some much-needed funding just a few days after pinning it up, so there it stays.

Q What do you like to do when you're not working?
A. My partner, Rupinder, and I have a young daughter and son, Aurora and Eugene. I like to spend time with them and I do all the cooking at home. I'm a big fan of rugby league and like to go to see my home team Wigan Wanderers as often as I can, which is not so often these days!

• Click here for more of the interview on Society Guardian

Jane Dudman

Council cuts will affect services

Jo Adetunji — Tue, 31 Aug 2010 10:26:48 GMT

Users say they are not confident that public services will be maintained to current standard in the wake of extensive budget cuts

There is a distinct lack of confidence from users that local public service organisations will continue to be able to deliver services in the current financial climate, according to a recent poll.

Research, carried out by Ipsos MORI and commissioned by Zurich Municipal, has revealed that almost half of the 998 people sampled said they were not confident that councils would be able to respond to the challenges faced by extensive budget cuts.

But there were indications that those sampled remained sympathetic with the position of local authorities. Just over a quarter – 26% – believed that individuals would be better placed to deliver services themselves – a key part of the government's Big Society agenda.

"It is undeniable that tough times lie ahead for local councils and it is not surprising that the British public is concerned. Deciding where and what to cut, while ensuring that those most in need receive vital services, will undoubtedly be a huge challenge," says Andrew Jepp, head of local government at Zurich.

"However, as not many of the public were willing to take on the task themselves, their concern appears to stem from a recognition of just how great the risks in this area are – rather than the belief that our local authorities are underprepared or that local communities are better placed to do the job.

"Whatever shape local service delivery takes in the future, with it will come a wealth of risks and challenges. It is crucial these are fully understood before decisions are made as to who takes responsibility for delivery – whether that is local authorities or local communities."

The full research will form part of a November report analysing risk in public services.

Jo Adetunji

About time for more diversity

Jo Adetunji — Thu, 26 Aug 2010 15:38:55 GMT

The organisers of a new three-day leadership course are hoping that it will invigorate the talent pool and lead to more diversity on public boards

A professional course that will use intensive workshops to develop leadership skills has been launched as part of a campaign to encourage more diversity on public sector boards.

The designers of the learning and development programme, which is being run by Common Purpose as part of their About Time campaign, say the course will look at best practice in governance and the role and responsibilities of board members. The workshops will "develop leadership skills for participants to ensure they are effective as board members of national bodies and play an active and responsible role in civic society."

Common Purpose says their aim is to increase the diversity of public body board members and the number of people involved in public life across the UK. It says that increasing the talent pool of individuals ready to take up positions and overcoming barriers to participation – using methods developed by the course – are key to achieving this goal.

"Public boards not only have a responsibility to maintain vision but to be representative of the diverse communities they serve and it is "about time" we increased the diversity of public governance to ensure that is the case," says Kate Nash, chair of the campaign.

"The UK is undergoing a great deal of change with a new coalition government and huge public sector cuts that will mean the governance of national, local and regional boards will be increasingly important to maintain vision and strategic pathways to keep organisations on track."

Students on the courses will have the opportunity to meet, interview and debate with experienced board members and executives and to learn how to balance competing priorities and will develop skills in strategic planning, restructuring, communication and crisis management.

"Effective boards need more people to engage and represent wider society, and to serve and challenge organisations," says Nash. "The diversity of public boards is critical to its ability to spot issues and trends. Over the years there have been many initiatives seeking to increase the numbers involved in public life without much success. So isn't it About Time we really made it happen?"

Common Purpose, an international leadership development organisation, launched the About Time campaign in conjunction with the Government Equalities Office in January.

The About Time course will run from 21 October in London for three days.

Jo Adetunji

Councils told to cut 'street clutter'

Thu, 26 Aug 2010 12:14:00 GMT

Cabinet members call for crackdown on 'bossy bollards' and say advertising hoardings are a waste of money

The government's review into street furniture is due out next spring, but the communities secretary, Eric Pickles, and the transport secretary, Philip Hammond, are already on the attack.

The ministers have written to council leaders calling on them to reduce the number of signs and other "street clutter" and urging them to wage war on "bossy bollards".

Senior cabinet members are worried streets are "losing their English character" as councils mount traffic signs and hoardings, squandering taxpayers' finance in the process.

The transport department says in some cases councils are putting up signage they mistakenly believe is legally required. It is calling on councils across Britain to crack down on street furniture, although confusingly Pickles today announced the project by saying streets are losing "their English character".

While some signs and street furniture are required by law, the government says that for such items to be most effective they should be kept to a minimum.

To assist councils with the task of determining which street signs should be removed the transport department will review traffic signs policy before publishing new advice on how to reduce signs and railings.

"Our streets are losing their English character," said Pickles.

"We are being overrun by scruffy signs, bossy bollards, patchwork paving and railed off roads – wasting taxpayers' money that could be better spent on fixing potholes or keeping council tax down. We need to 'cut the clutter'.

"Too many overly-cautious town hall officials are citing safety regulations as the reason for cluttering up our streets with an obstacle course when the truth is very little is dictated by law. Common sense tells us uncluttered streets have a fresher, freer, authentic feel, which are safer and easier to maintain."

One of the examples listed by the DfT as having its character spoiled was the cathedral city of Salisbury in Wiltshire, which it said was littered with bollards – one parking area for 53 cars having 63 bollards.

The DfT also said that the removal of street clutter from Kensington High Street in west London had reduced accidents by up to 47%.

Hammond said: "We all know that some signs are necessary to make our roads safe and help traffic flow freely. But unnecessary street furniture is a waste of taxpayers' money and leaves our streets looking more like scrap yards than public spaces.

He added: "We don't need all this clutter confusing motorists, obstructing pedestrians and hindering those with disabilities who are trying to navigate our streets."

Who knows me best?

Jane Dudman — Thu, 26 Aug 2010 09:43:59 GMT

Emma Harrison, founder of A4e, talks to Jane Dudman about how she is putting her entrepreneurial skills to a social purpose

Emma Harrison, chairman and founder of Sheffield-based training company A4e, the largest provider of welfare to work services for the government, may be a familiar face to those that have watched Channel 4's Who Knows Best programme recently.

The Guardian noted earlier this year that the media hasn't been slow to pick up on her straight talking and photogenic smile Who Knows Best. As well as Who Knows Best, her media exposure includes Benefit Busters, Secret Millionaire.

On Who Knows Best programme she was pitted against London youth worker Ray Lewis to find a job for a workless young person. Harrison, it was noted in the Guardian, nurtured her young charge every step of his way into a suit and a job in the City.

Just last week, there was further exposure for Harrison in Radio 4's the House I Grew Up In. Harrison also keeps on winning awards, including, in 2007, the Nat West Every Woman Award and, more recently, this year's First Women Award for public service.

Why does she think she attracts such attention? "I'm a girl," she says, self-deprecatingly. In fact, this 47-year-old woman is a savvy businesswoman, tough enough when she started A4e to leave the business she was in with her father because she felt she needed to take a different direction.

My biggest challenge is people who say no and think things can't be done

"My biggest challenge is people who say no and think things can't be done, but it was a big challenge when I was in business with my dad. He became quite ill and I was in a very difficult position. I had to break away and start again. I adored my father, but I had to leave, to start again with my belief that my role was to improve people's lives. Dad didn't want to do anything as brave as that, but I wanted a worldwide business with that at its heart."

She is clear that A4e is not a social enterprise. "It's a social purpose company," she says, firmly. And despite the fact that she now employs more than 3,000 people, Harrison says she is still very entrepreneurial. "I love creative leadership," she says. "And what's different now is that I don't have to worry about whether the photocopier's working."

Work-life balance

Harrison, who is married with four children, prickles at first at the inevitable question about how she manages her work-life balance. "Would you ask a man, that," she rightly asks. But persuaded that there is a legitimate interest in how senior women managers arrange these matters, she says she had a good piece of advice early on, from her mother.

"I had money in the bank, but the dog food ran out and the phone bill wasn't paid. Mum told me to get a housekeeper and I've never looked back," she explains. I have a support system in place that a man would have. I want to improve people's lives and can't do that if I also have to worry about the phone bill."

Harrison's company is already the largest private contractor for welfare to work services, but she's keen to take on more. She takes a fierce line on job searching, saying job opportunities do exist, even in the midst of the worst recession since the 1940s. "That upsets me the most. It gives people a reason to give up. A4e is famous for finding the hidden jobs. I promise you they're out there."

As public spending cuts begin to bite seriously, Harrison's theory stands to come under severe test. Many of those presently employed in the sector will certainly be hoping she is right.

Jane Dudman

Unison challenge to Lansley in the courts

Wed, 25 Aug 2010 09:25:13 GMT

Trade union claims health secretary's directive to NHS chief executives to implement white paper proposals immediately is unlawful

Public service trade union Unison has started legal action against the health secretary Andrew Lansley over his refusal to consult the public on sweeping changes to the way the NHS is organised.

A day after the white paper was published in July, NHS chief executive Sir David Nicholson instructed all NHS chief executives to implement the proposals immediately. At the time Unison, which represents 400,000 members in the NHS, wrote to Nicholson saying this instruction was unlawful. It argues that until the public have had the opportunity to consider and comment on the proposals, changes should not be implemented.

Nicholson's letter outlines major issues that could pose significant risks to the management of the NHS as well as to the wider public sector, including possible compulsory redundancies.

In addition, all NHS leaders were told by Nicholson that they should not only be meeting their financial, operational and quality targets for this year but must also meet "enhanced reporting arrangements" and work "urgently" with local authorities.

In his July letter, Nicholson said NHS leaders must be "on the pitch, not in the commentary box", and must not defend "organisational self-interest".

Nicholson then wrote another letter to NHS chief executives, reminding them not to introduce any reforms until the end of the official public consultation period on 5 October. But he also said that the consultation was only over how the changes should be implemented and not on whether they should be introduced at all.

This has provoked an angry response from Karen Jennings, Unison head of health, who said the NHS constitution enshrines the principle that the public, staff and unions have an absolute right to be consulted. "That means not only on how the proposals are to be implemented, but also whether they should go ahead in the first place," stated the union.

Nicholson said the public's view on the white paper proposals themselves was not being requested and would not be considered.

The power of networks for social change

Tue, 24 Aug 2010 14:52:56 GMT

'Big Society' is dependent on social networks, says a leading UK economist

Before setting out to change the world, politicians should first of all look at how to interpret it correctly - says a leading UK economist.

The success of government initiatives, from the "Big Society" to action on binge drinking, rests on the understanding of how social networks change our behaviour.

In his essay published by the RSA, economist professor Paul Ormerod argues that the failure to understand "network effects" partly explains the economic crisis and ineffectiveness of policies in delivering change.

N squared - Public policy and the power of networks follows on from the governments's new research into so-called 'nudge' based policies from its behavioural insight team.

It addresses how many implemented policies ignore networks - resulting in misleading results.

The upshot is that public investment goes into the wrong interventions, or to policies being abandoned before any effects take place.

For example, in one of his studies on binge drinking, Ormerod suggests that binge drinking spreads rapidly among groups of friends. Policies aimed at tackling the problem need to take seriously the role of peer pressure and not just individual interventions.

Ormerod goes on to stress the need in understanding networks, by proposing a shift in the approach to public policy.

Ideas and actions

He suggests moving away from large-scale, expensive interventions which often have minimal effects on outcomes, towards smaller interventions whose impact can be magnified through ideas and actions across networks of people.

Ormerod says that by ignoring network effects, we carry on with the same model, spending vast amounts of money with a hit-or-miss success rate - as evidenced from the past 60 years.

"Politicians have sought to change the world. The point is that they need to interpret it correctly. The potential gains from more effective policies built on a better scientific understanding of how the world operates are enormous," he says.

Fizzing with ideas

Jane Dudman — Tue, 24 Aug 2010 10:38:12 GMT

From running Pepsi in South Africa to taking the helm at a troubled Stoke city council, John van der Laarschot's switch to the public sector was a gamble - on his part, happily he has proved to be the right man for the job

Moving from the private sector to the public sector can be disconcerting. There is a new language to learn and a new political dimension to leadership, which can prove a challenge for some senior managers.

John van der Laarschot, the chief executive of Stoke city council, has not only managed the transition carefully, but also with boldness. Until his first public sector appointment, as chief executive of Torridge district council in north Devon, Van der Laarschot's entire career had been in the private sector. He has a background in corporate finance and his positions include running Pepsi's business in South Africa.

Why move to the public sector? Because of the challenge, says van der Laarschot, and because he felt he could contribute something from his business background that might help make local authority leadership more effective.

The job at Torridge meant van der Laarschot had to take a huge paycut, in order to join an underperforming district council. His next career move was a bigger gamble. Stoke city council was looking for a new chief executive following a turbulent time. "If you looked at the council, it did not have a brilliant reputation," explains van der Laarschot. "There was political turmoil and a high turnover of senior employees."

At the time, there had been a number of problems at Stoke, which was the worst-performing council in England, with serious social deprivation issues and a growing BNP presence. Its children's services were in administration and van der Laarschot says the council wasn't able to deliver effective services.

But with a change in the political administration, following an election that created an unusual, four-way political coalition, between Labour, Conservative, Liberal Democrats and independents, there has been what Laarschot describes as a "fair degree of progress".

They see this as an opportunity to take some rather bold steps

Having a stable political leadership has been "very helpful", adds Laarschot in starting to rebuild confidence across the authority. In June, the political members agreed a change programme for the council that involves members working together with officers on what Laarschot describes as a vision of the city that its citizens themselves want, "rather than what we think they might like". There will be elections again next year in the city, so the present politicians have only a year's tenure. "You might argue that politicians in that situation would be nervous of doing anything, but it's almost the reverse," comments Laarschot. "They see this as an opportunity to take some rather bold steps."

Laarshot is clearly relishing his own opportunity to make his mark, steering through this major change programme. How has he found the transition into the public sector from the corporate world? The first things he noticed were the differences in terminology - a new language had to be learned - and the much slower recruitment process. He was particularly struck by the fact that those shortlisted for a vacancy sit in a room with their competitors - not something that happens in the private sector.

There has been a meeting of minds between Stoke and its new chief executive. Stoke wanted a new chief executive with a business-like focus, to oversee the radical leadership overhaul that was necessary. That meant taking a gamble - but candidates for the job were also taking a gamble, says David Hunter, of professional recruitment agency, Penna, which assisted in the search.

"Stoke was seen by the community of potential leadership candidates as a basket case," says Hunter, frankly. "It was at that time the worst council in England, with an extraordinarily fragmented political situation, and the members weren't sure why anyone would agree to come to the city."

Despite the fact that Laarschot had no experience of working with children's services, Penna felt he would be the right person for the job. He had a strategy of what needed to be done and, once in post, persuaded the Labour government at the time to bring children's services out of administration and back into Stoke. Laarschot also brought business acumen, with a focus on operational excellence, and his decision to join a smaller authority before aiming higher has paid off, according to Hunter. "His first grounding, in a small council, gave him an understanding of the language and credibility in front of the interview panel."

Jane Dudman

Public sector suppliers go bust as spending cuts bite

Mon, 23 Aug 2010 13:26:37 GMT

Care home operators have been particularly badly hit as local authorities tighten their budgets

The number of public sector suppliers going bust has grown by almost 50% so far this year, according to new research, as the coalition government's austerity measures start to bite.

The rate of collapses among businesses supplying both goods and services to the public sector is in stark contrast with the rest of the economy, the Guardian reveals today. This month, the government's Insolvency Service said there was a 19.1% fall in company liquidations on a year earlier to 4,080. That was a slight rise on the first quarter of 0.5% but generally liquidations have been falling.

The coalition government has ordered Whitehall departments to propose cuts of up to 40% in their budgets while controversial retailer Sir Philip Green, the billionaire owner of high street retail chains Topshop and Dorothy Perkins, has been drafted in to carry out an external review of the government's drive to cut public spending. But the clampdown on spending is having a knock-on effect on the private sector.

In the first six months of the year, 168 businesses in the health, social services, education and defence sector went under, compared with 114 in the first half of 2009, according to accountancy firm Wilkins Kennedy. The firm believes the figures show that the government's austerity measures are already leading to corporate failures and job losses.

"So far the impact of the government's austerity drive has been most visible in the slew of profit warnings from listed companies," said Anthony Cork, Director at Wilkins Kennedy. "However, for an increasing number of companies the situation is even worse and they are being forced into insolvency."

"Whilst the real cost-cutting that this government has threatened has yet to take place, we are already seeing a wide range of companies fail because of delayed contracts."

"Those companies that have become too dependent on the public sector – be they in recruitment, outsourcing, construction or marketing services are beginning to feel the pain. It is not just the actual cost cuts that are causing problems but the delay by public sector bodies making spending decisions."

Already there have been several warnings from public companies that the clampdown on public spending has hurt their business. It started with Cable & Wireless, the provider of communication services to large corporations as well as local authorities and government bodies, which saw its shares plunge 17% in July after warning that spending in the UK public sector had "slowed very significantly".

Care home operators have been particularly badly hit as local authorities tighten budgets. Earlier this month the UK's biggest care home operator, Southern Cross Healthcare, warned of a reduction in admissions to its care homes from local authorities.