Promoting social enterprise

An interesting report from the Kings Fund today on whether the DH has been properly promoting social enterprises and spin outs.

Reality lags behind the rhetoric of creating the ‘largest social enterprise sector in the world’, they say!

The prospect of a more competitive marketplace for health care providers including short term contracts for fledgling social enterprises presents significant risks for their survival. Legal, financial and other support is needed to develop and grow the social enterprise sector and some start-ups will need to develop more robust business models. Crucially, the report recommends that NHS commissioners need to offer longer-term contracts to enable social enterprise providers to establish themselves in a more competitive environment.

The Report found early evidence to suggest that healthcare providers that have adopted the social enterprise model have benefited by reducing bureaucracy, speeding up decision-making and by allowing the reinvestment of surpluses, an effective motivator for staff. Another perceived benefit of social enterprises is increased staff engagement, but simply moving to a new operating model was not found to be sufficient. Senior managers needed to make specific efforts to engage staff from the outset.

The Government’s recent Open Public Services White Paper restated its commitment to encouraging public service mutuals as part of its agenda for diversifying the provision of public services. However, despite the Government’s hopes for ‘the largest and most vibrant social enterprise sector in the world’, the numbers of staff leaving the NHS to form new social enterprises has not kept pace with this vision.

Healthcare providers face challenges in establishing themselves as social enterprises. Some providers report that they are lacking the right support to manage staff concerns about changes to their terms and conditions, particularly pensions. Staff anxieties were reportedly added to by conflicting communications about the Government’s health reforms.

This is interesting. But of course the opening up of health and social care to a greater diversity of providers is not just about "spin outs" from existing staff. It is also about more commissioning of health from charities and community organisations.

I think we can get over hung up on terminology here. Many social enterprises are registered charities. Many charities have social enterprise wings. The best example of a pioneering social enterprise set up after the War was the Oxfam charity shop. Hugely successful and profitable - the profits going back into international aid work.

We must also beware the changing name plate phenomenon. A spin out of existing NHS staff into a new "social enterprise" may not be progressive. Social enterprises run, owned and controlled by the staff may not work to promote the interest of the citizen or patient.

Now in fact I know from the recent listening exercise that many of the 91 spin outs I referred to in my recent Report for the PM on "Choice and Competition" are innovative and non bureaucratic and have put community interest at the heart of their working. They have covered some 25,000 staff so far.

And the Social Investment Business have made £80m worth of loans and support through the DH social enterprise investment fund.

We need a mix. Different models. Joint ventures. Partnerships with the private sector. 3 way alliances of the third sector and pulbic- private providers.

For too long the NHS has operated on a top down, centrally driven one size fits all and do as you are told from Whitehall model. Its time for change. And this is the opportunity for the third sector to thrive.

And what citizens and patients want is choice. Competition will drive that through more diversity of providers.

So social enterprise is part of a new rich jigsaw of provision. It is not the only answer. And there are dangers in employee owned models or co-operatives.

I was up early to go to the Today programme to talk about the Kings Fund Report and lock horns with the health officer of the trade union, Unison. I was being interviewed by Evan Davis - always a privilege and it was great to be introduced as a well know champion of the role of the third sector!

I'm a great fan of "Today" so always love the opportunity to set out my views to the millions of listeners to this great BBC institution.