Health secretary challenges ‘narrow’ definition of social enterprise

Health secretary challenges ‘narrow’ definition of social enterprise
Gemma Hampson, Social Enterprise Live

A battle of definitions exploded today after health secretary Andrew Lansley said the Department of Health’s vision of the ‘largest social enterprise sector in the world’ may not fit with the ideals of the sector’s umbrella body.

The Social Enterprise Coalition has warned that ‘the fundamentals of social enterprise will get lost or distorted’ if companies are ‘encouraged to call themselves social enterprises if they are not’.

Speaking to Social Enterprise after his address at today’s Acevo health conference, Lansley said foundation trusts would have ‘characteristics’ of social enterprise.

However, he admitted they may not fit the idea of social enterprise promoted by the Social Enterprise Coalition.

‘I have looked at the Social Enterprise Coalition’s definition of social enterprise and there’s a risk of defining social enterprise so narrowly that others are not included,’ he said.

When pressed by Social Enterprise on how foundation trusts would operate as social enterprises, Lansley said: ‘They are outside of direct government control and they have their own objectives.’

He added that trusts’ current form, the public benefit corporation, was capable of delivering the same social impact and could be seen as a new social enterprise structure. He rejected the idea of incorporating foundation trusts as community interest companies, although he said new providers may wish to explore this legal form.

But responding this afternoon, Social Enterprise Coalition CEO Peter Holbrook claimed that foundation trusts ‘cannot be called social enterprises’.

Holbrook said: ‘Social enterprises are wholly independent organisations, and operate very differently from foundation trusts. Even with more freedom and flexibility outlined in the DH’s white paper, foundation trusts will not be fully autonomous, and therefore cannot be called social enterprises.

‘While we want to see social enterprise principles integrated across the private sector and public sector, there is a danger that the fundamentals of social enterprise will get lost or distorted in the process, and we must be vigilant to ensure that does not happen,’ Holbrook said. ‘We do not want to see companies allowed to call themselves social enterprises if they are not.’

He added: ‘There are already many social enterprises operating in healthcare, and we’re pleased that the government wants to expand their role and learn from their example. We look forward to working with the Department of Health going forward to ensure that social enterprises can play a strong and substantive role in creating a better healthcare sector.’

The Department of Health (DH) said in its white paper, published on Monday, that its ambition was to ‘create the largest and most vibrant social enterprise sector in the world’ by giving more freedom to foundation trusts, along with giving GPs commissioning powers and patients more choice.

Responding to Monday’s white paper, Holbrook said earlier this week: ‘There does seem to be some confusion as to the differences between foundation trusts and social enterprises.’

Lansley added today that the DH view of social enterprise wasn’t only about employee-ownership models, but giving opportunities to charities and voluntary organisations through the government’s ‘any willing provider initiative’, which aims to create a level playing field. These organisations would then be paid by results, or paid by ‘performance’, as Lansley preferred to refer to it today.

During this morning’s address, which he said wasn’t a formal speech, Lansley failed to mention social enterprise specifically, but said that the voluntary sector was at the heart of the government’s vision of the health service.

‘There’s an opportunity because we are looking for innovation, and it’s something the voluntary sector can deliver better than anyone else,’ he said.

‘As a government we are going to be open to new providers and the voluntary sector is at the heart of that.’

A new health service delivery consortium was also revealed at today’s conference. While details still need to be finalised, an Acevo spokesperson said The Social Investment Business-led consortium would be similar to 3SC or Serco, which deliver welfare to work contracts, and would bring together voluntary organisations, charities and social enterprises to help them bid for and win large health service contracts.

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