part of the UK social enterprise landscape
Across the public sector, groups of staff are considering whether to ‘spin-out’ to form employee owned mutuals. In health, social care and children’s services several thousand staff have already made this step, allowing them more freedom to develop better services. Social Finance is a strong advocate of mutualisation. We offer corporate finance advice for groups of staff considering spinning out as well as support in raising investment to those who are already running a mutual. Prior to spinning out, we can provide:
- Advice on how to develop business plans, legal and governance arrangements that will enable them to access finance should they need to once they have spun-out; - Support to those in negotiations with external investment partners who are proposing an equity stake in the new mutual. Once mutuals are established, we offer:
- Advice on how to develop payment-by-outcome contracts with commissioners;
- Capital raising for those looking to expand or purchase assets, particularly those seeking to raise social investment;
- Mergers and acquisitions expertise. In our experience, mutuals may require access to a range of finance to reach full potential; working capital to enable ongoing business operations; risk capital to expand into new fields; and loans to purchase or develop assets.
As a corporate finance intermediary, our role is to support mutuals to understand whether investment is required and get the best deal possible if it is. We are not tied to one investment fund or bank, but work with mutuals and a range of investors with whom we have strong relationships to develop the most appropriate form of finance. In this, we draw on our extensive knowledge of how public service markets are evolving and on our experience of supporting public services to improve their productivity. In May 2012 we published a Technical Guide to Financing New Employee Mutuals, highlighting the nature of the opportunities and challenges mutuals will face in securing the investment they require.