2013 A Defining Year for Social Enterprise

2013 A Defining Year for Social Enterprise
Les Huckfield


2013 will be a year for defining ‘Social Enterprise’, especially in the National Health Service in England. This Background section explains why.

(From the outset, Huckfield declares an interest in all this as a Member of the Board of the Social Entrepreneurs’ Network Scotland and a firm supporter of Social Enterprise)

Andrew Lansley’s Health and Social Care Act March 2012 gives all Local Councils a stronger role in shaping health and care services through setting up Health and Wellbeing Boards, which bring together local Councillors, Directors of Adult Social Services, Children’s Services and Public Health, Clinical Commissioning Groups and patients’ views to represented by a new local Healthwatch (formerly called Local Involvement Networks). Local authorities must all employ a Director of Public Health and will become responsible for the health of their local populations.

Huckfield, like many others, is not pretending that these new Healthwatch bodies will be a countervailing power to GPs’ Clinical Commissioning Groups as the big Budget Holders. Through having a seat on Health and Wellbeing Boards, a local Healthwatch will be able to provide advice and information about access to local services and choices available to patients. It will be able to stress concerns, visit health and care centres, and hopefully through sitting on the Health and Wellbeing Board, at least find out something about what’s happening.

But beyond this, a local Healthwatch won’t have much real power.

(For those who have lost track on new NHS Structures under the Health and Social Care Act 2012, there are useful summaries on the UK Parliament site and on the Department of Health site at Health and Social Care Act Explained. There’s also a candid summary of events throughout the 2010 to 2012 passage of the Act – “Never Again” by the Institute of Government and the King’s Fund – which shows foundations laid for the 2012 Act by the previous Labour Government.)

The potential breakthrough for Social Enterprise is that the 2012 Lansley Act replaces a key Section in the Local Government and Public Involvement in Health Act 2007 so that “the body contracted to be the local Healthwatch must be a ‘body corporate’ (ie. a legal entity), which is a Social Enterprise.”.

As the Department of Health’s Summary Report on Issues Relating to Healthwatch Regulations July 20 2012 shows on page 2, Social Enterprise UK was consulted about all this. This Summary Report also makes it clear on its page 4, Section 1.11 that “The proposed criteria align with the principles promoted by organisations such as Social Enterprise UK”.

Not Much Doubt about the Regulations

There was no ‘Social Enterprise’ definition in the Public Services (Social Value) Act March 2012, which “requires public authorities to have regard to economic, social and environmental well-being in connection with public services contracts”, that is to say, written contracts in which a contracting authority engages a person to provide services.

These Regulations therefore represent the first attempt under Coalition Government legislation to define ‘Social Enterprise’ in detail. What follows shows that from mid 2012 there should not have been much doubt about their content.

In June 2012, the Local Government Association published Get in on the Act: Health and Social Care Act 2012. Page 14 is clear about Section 183: Local Healthwatch bodies.

“Section 183: makes provision for contractual arrangements between local authorities and LH, which must be a Social Enterprise. It also enables local authorities to authorise LH organisations to contract with other organisations or individuals (LH contractors) to assist them to carry out their activities.”

Accompanying the Regulations, the Explanatory Memorandum to the Parliamentary Joint Select Committee on Statutory Instruments on pages 8 to 10 is comprehensive about the forthcoming definition of ‘Social Enterprise’

“7.15 Local Healthwatch organisations will be social enterprises which satisfy the community interest test and other criteria. There is no single definition of a Social Enterprise and there are several legal forms. However, a general description would be ‘businesses with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community’”.

Succeeding paragraphs of the Explanatory Memorandum refer to Local Healthwatch bodies’ satisfying a “community interest test”, provisions for distribution of profits and assets on dissolution.

Parliament’s Joint Committee (Lords and Commons) on Statutory Instruments is able to report on discrepancies and lack of clarity in Regulations which it considers. The Joint Committee on Statutory Instruments Publication List makes no reference to consideration of these Regulations, despite their significance in defining ‘Social Enterprise.’

But all these other publications should have left no doubt about the significance of forthcoming Regulations in seeking to define ‘Social Enterprise’. Following precedent, there is now every possibility that this definition will be replicated in Regulations under other legislation.

See ful article here