To some, being one's own boss is an attractive prospect: it allows freedom to shape a business, be rewarded for success, and to not be taken for granted while gaining the respect of others. For those who feel happiest being part of a large organisation, doing tasks without having to worry about cashflow, the regulatory burden or where the next job or contract is coming from, it sounds like hell.
In the environment of the localism bill's Right to Provide these choices will be stark.
There has been recent press coverage of a speech by the chancellor about the burdens on businesses of many employment rights that have accrued over the years. George Osborne announced that the government intended to erode many long-held employment rights so that companies could have a more "flexible" approach towards their employees. The Confederation of British Industry was generally in favour of a wholesale review and the scrapping of many such rights. The expected response from trade unions was to oppose any such review as a matter of principle and to stand up for hard-won rights.
It is worth considering how this would play out in the context of social enterprises – where a business has been set up by employees to provide services commissioned by a council.
All the staff associated with the business undertaking would transfer on the exercise of the Right to Provide with the benefit of existing terms and conditions of employment. Some of these T&Cs may make the business less cost-effective than other businesses that might be competing for the same contract in the near future. So does a business owned by employees decide to reduce or remove what "management" had previously regarded as costly, burdensome restrictive working practices, for instance? Or would the employee-owners decide their working practices are so dear to them that they would risk future loss of business and probable loss of employment for some of their number?
The option that the employee-owners have to consider may be to change their attitudes and link personal rewards to business success or efficiency rather than letting, say, working practices restrict the ability of the business to be cost-effective. Performance-related pay at its simplest.
The Right to Provide is likely to show employees going down that route where the business is more effective or less effective and then, as they have rights as owners as well as employees, present them with the collective opportunity of being where the buck stops. It won't be an easy decision – but that's what comes with being the boss.
Ross Griffiths is a partner at Cobbetts LLP
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