Reaping the rewards of social enterprise
Mark Gould & Patrick Butler – The Guardian
Conference delegates told that councils should be encouraged by the government to set aside their caution and be brave when commissioning public services from outside the mainstream
Can social enterprise break into the mainstream provision of public services? Yes, the Guardian conference heard, but commissioners in local government and the NHS will need practical encouragement from ministers and the Treasury to properly engage with the sector, to be ‘smarter’ and less risk-averse in the way they procure services, and to be more open to the benefits it can offer.
Claire Dove, chief executive of Liverpool social enterprise Blackburne House Group and chair of the Social Enterprise Coalition (SEC), said the coming squeeze on public finances means that the state has to develop a sophisticated and strategic approach to commissioning public services. Social enterprises offer proven efficiency, innovative approaches, and added social and environmental value. But authorities are often too risk-averse to contract with them. ‘Very often, what is defined as value for money equates to the cheapest option that does not take account of the broader social value,’ she said.
But Dove stressed that brave councils reap rewards. ‘When Sandwell Community Caring Trust [which provides health and social care for learning disabled adults and children] was council-run, it racked up an average 22 sick days per employee per year. Now it’s a social enterprise, the average is one day a year.’
Paul Martin, chief executive of the London borough of Sutton, agreed that councils are still feeling their way in terms of commissioning, and need to get stronger encouragement from government to take more risks. But, he said, local experience showed deals with social enterprises were a success, proving to be ‘faster, more nimble and energetic’ than conventional services. ‘It’s that energy we need in this climate,’ he said.
Peter Holbrook, chief executive of Sunlight Development Trust, based in a deprived neighbourhood in Gillingham, Kent, explained how his organisation, which combines community development and social enterprise, offered a ‘genuinely holistic’ range of health, lifestyle, leisure and support services to local residents, many of whom are employed by Sunlight. Holbrook, who becomes chief executive of the SEC in January, said it is successful because it is designed around the needs of individuals rather than institutions or services, and is committed to delivering positive long-term outcomes for the people it served, instead of simply meeting centrally imposed targets or following processes.
He described how Sunlight got two homeless teenagers off the streets and gave them jobs – an achievement that had eluded their contact with eight ‘service providers’. However, he emphasised that Sunlight is not in competition with public services, but is a partner.
Narinder Singh, economic development team leader at Gateshead council, said social enterprise has a key role to play in delivering wider social and environmental objectives for local authorities. He described the success of Renew North East, a local charity that trains local people to repair, recycle and resell fridges and cookers that would otherwise end up contributing to rising landfill waste costs. ‘It’s got 15 employees, 30 training placements, and recycles and refurbishes 10,000 white goods a year,’ he said.
Social enterprise can add genuine value to public services, but the onus is on them to demonstrate robustly to commissioners that they can deliver real social returns, warned Eilís Lawlor, head of Valuing what Matters, at the New Economics Foundation. ‘Simply saying ‘We have a social mission’ is not good enough,’ she said.
Ray Mills, a partner in PricewaterhouseCoopers’ government and public sector practice, said that commissioners need encouragement from the Treasury to take social value into account in procurement processes. But the Treasury showed little practical interest in doing this, and local authorities, which are preparing to make substantial budget cuts, will inevitably be focused on delivering services at cheapest cost, rather than investing in services that deliver longer term returns. Liam Byrne, the chief secretary to the Treasury, told the conference, held in association with the SEC, that local authorities and the NHS have to work in closer partnership with citizens, charities, social enterprises and community groups if they are to ‘lock in’ the improvements in public services made over the last decade.
The state and civil society did not offer alternative models for service provision, but had to support each other. Councils and NHS trusts need to enable citizens to be involved in the design and delivery of services to unlock improvements at a local level. ‘The next decade could be the best decade for public services in terms of making a difference,’ he said.
A white paper setting out how the state can deliver ‘smarter’ public services will be published before Christmas, he said, and he hinted that he will soon unveil the long-anticipated social investment bank, which could become a source of capital for social businesses.
Asked whether he would extend the Right to Request scheme, which enables community health workers to set up a social enterprise to deliver NHS services, he said: ‘Where people have got good ideas for extending Right to Request we should look at them. Over the next few years we need to look at new ways of spending state capital with new mechanisms that bring together civic society [and the public sector]. I am not sure if you would call that Right to Request because sometimes it might involve social enterprise projects around schools, the police or local authorities.’
Amanda Mayo, a former NHS nurse, and clinical director of social enterprise Urgent Care, described how she experienced hostility and even bullying from health service colleagues when she mooted setting up the company under Right to Request. But, she said, it was flourishing, and independence from the health service has allowed her and her colleagues to deliver services more innovatively.
Liberal Democrat shadow chancellor Vince Cable told the conference that commissioners had to move beyond merely identifying the potential benefits of social enterprise. ‘We need to focus on getting past the reviews and delivering – getting social enterprises doing things.’ Social enterprise is now providing ‘success stories’, he said. But, he told delegates, he would not ‘insult their intelligence’ by simply telling them they were ‘all wonderful’. The sector faces real problems with access to capital, and grey areas exist around the governance of social enterprises and what happens if they fail.
Commissioners were naturally cautious, Cable said. ‘People perform against what they are measured on, therefore they won’t change and won’t take risks.’ But local authorities and primary care trusts had a ‘market-making’ role in ensuring public services were delivered – and, within that, social enterprise has to be ‘an option’.