1. ColegauCymru/Colleges Wales Annual Conference Further Education Colleges as charitable social enterprises in England Julian Blake Bates Wells Braithwaite 13 th May 2014 199999/0119

2. “Freedoms and flexibilities”: public sector to public benefit sector (1) 1992 statutory corporations; sector rationalisation 2011 alternative legal structures; governance models (Schedule 4) Question: how better to deliver purpose Continuing prescription – standards; (political) policy; set ideas Quasi-regulation - inspection (Ofsted) and funding conditions (SFA) 199999/0119

3. “Freedoms and flexibilities”: public sector to public benefit sector (2) No need to change/slow change/ideas for change Good practice examples not systemic What is possible/what is desirable/how can it be done Association of Colleges; Gazelle Group; 157 Group Model of charitable social enterprise emerging from public sector model

4. Charity law: the regulatory base Exempt charity status “Clarity of purpose” (First Pillar of effective governance - Humphreys Report) “Public benefit ownership” (Third Pillar of effective governance) Regulation for charity law: BIS; MOU with Charity Commission Charity law principles –exclusively charitable (advancement of education); –non-profit distributing; –for the public (not private) benefit Duty of Governors (charity trustees) –best interests of (charitable objects of) college; –overarching governance responsibility; –delegation principle 199999/0119

5. Governance: the essentials (1) Professionalising Board of Governors model: compact; engaged; (collectively) expert; unitary; appointed for capability; sensitive to community needs (diverse) “Scrutiny and accountability” (Fourth Pillar of effective governance) New approaches: e.g. Carver “Policy Governance”; Co-operative Mechanism and basis of appointment; duration in office Roles/responsibilities/relationships – clarity; governance/management; delegation for purpose 199999/0119

6. Governance: the essentials (2) Chair/Principal/Clerk Learner/staff appointees, not “representatives”; union issue Governance: strategy; high level policy; delegation; scrutiny of management Management: SMT: executive direction; advice and recommendations; implementation; reporting Stakeholders: learners; staff; community; employers; alumni - aspect of “public ownership”; constitutional roles; consultation forum(s) Payment: charity law general rule/exceptions; Principal on Board; Governor payment Induction and training

7. Social Enterprise: a business model Legal structure secondary; necessarily charitable Social enterprise principles – independent; sustainable; purpose driven; public benefit “Capacity and effectiveness” (Second Pillar of effective governance) Shared services/collaboration: within sector; across sectors; purpose alignment with public sector/public benefit sector Income/surplus generation for purposes/development/reserves Resource utilisation for income generation; premises; personnel; intellectual property 199999/0119

8. Business development: responding to the challenge (1) Commercial trading subsidiaries: charity law model; Learner/staff enterprise, including social enterprise Integrated education/vocational training/business model Business diversification and commercialisation Commissioning/procurement: purpose over process

9. Business development: responding to the challenge (2) Community/regional collaboration, leadership and funding (LEPs); Public, including EU and public benefit sector funding Social Finance, including social impact bond principle (payment by results) Social Value and Impact Measurement Mutual principle - productivity from employee participation

10. Julian Blake Bates Wells & Braithwaite London LLP 2-6 Cannon Street London EC4M 6YH Tel: 020 7551 7777 Fax: 020 7551 7800 Email: j.blake@bwbllp.comj.blake@bwbllp.com 199999/0119