Are today’s Social Entrepreneurs breaking the Social Enterprise mould?
Social Enterprise has been with us for over a century but is the model evolving, or is it just a rebrand?
At the same time that new opportunities emerge, so do risks and threats. There now exists the ‘perfect storm’ for a new way of providing care services and products which can be exciting, rewarding and, more importantly, dramatically increase service users’ and patients’ quality of service whilst also improving staff morale. Furthermore, with the growing interest in mobile health, such as fitness wristbands, there is an opportunity to mainstream care in a way that respects and values people, and normalises it to a greater degree.
Many people are unhappy with the inequalities brought about and illustrated through examples within the banking sector crisis of 2008. Social Care now faces the brink of a crisis of at least a similar proportion and at the helm of some very large care agencies are the same people who ran many of our banks prior to 2008 crash. It does not inspire confidence that organisations associated with an industry of some of the most reputable banks, associated with excessive bonus pay, bank rolling terrorism, and laundering money for drugs related organisations, and fixing internal international currencies are now moving in to the care sector having wrecked banking.
Now at a time not seen in over 30 years since the Community Care Act, there exists greater opportunities to transform care provision – the evidence is there to see. Birmingham City Council, whom for the correct intentions of restructuring towards putting prevention at the centre of what they do, have been challenged, as have residential care costs in Pembrokeshire and now Southern Cross, and the recent well publicised crisis in care quality within learning disability provision in Castlebeck, Bristol and more recent care failings at the Old Deanary, in Essex. How much does governance and ownership have to do with these failings?
Social Enterprise Defined
There are over 62,000 Social Enterprises in the UK, employing 800,000 people who contribute over £24 billion to the economy. An organisation whose main purpose is for the advancement of environmental or social good is a Social Enterprise. In a survey commissioned by The Department for Business, Innovation and Skills (BIS), of 878 SME’s surveyed, 44% believed their organisation to be a Social Enterprise. When the BIS definition is applied, the actual number conforming to the definition is 9% (June 2011).
Misunderstanding leads to debate and contention around the ability of ‘The Big Society’ initiative. In fact the initiative is often derided but anyone person or organisation can get behind this and make it work or fail. It’s not in the planning but instead the execution. Other initiatives such as the Cooperative Councils Innovation Network need understanding and support as they will offer as many answers and solutions to today problems as they do questions. Whilst uncertainty about the new is certain, creating doubt over appropriate models for the commissioning and delivery of public service, what is absolutely certain is that our current status quo will fail. We can not afford therefore to let a lack of evidence prevent us from moving forward and doing things different, because the evidence says is we do not radically change and stay tied to old methods, we will be bankrupt like Detroit.
Social Enterprise Defined
A social enterprise was defined by the Social Enterprise Unit of the DTI as “a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for the shareholders and owners”.
Does it Matter?
Where the profit motive does still exist, some Entrepreneurs may be inclined to leverage the capital which exists in the name and emerging brand of Social Enterprise, which threatens to not only undermine the brand, but also our ability to address today’s challenges. Thankfully if the correct business legal form is chosen, there are regularity and legislative protection against this happening. This does not however replace the need for shared understanding of values and behaviours, and things can still go wrong. To be clear on this author’s view on private sector and profit: there is nothing wrong with profit and private sector involvement in public services contracts or major industries. Virgin rail, Virgin Airlines have been serious challengers to the status quo, in spite of big airline dirty tactics, where quality previously was far worse, and with little choice.
There becomes an issue however where either a business professes to be a social enterprise and is not, or where fundamentally the service involves significant amounts of public money, intellectual property and other assets and these assets can be easily moved out of the sector. At a recent event on social value (and the launch of the Public Services (Social Value) Act) hosted by Social Enterprise West Midlands, the chief executive of Sandwell Community Caring Trust and also Trustee of Social Enterprise West Midlands quoted that out of every £1,000 spent on public services in the private sector, £300 leaks out of the system as shareholder value through dividend payments. There is not a problem with this, if the value being provided delivers high quality care, with choice and dignity. But often it doesn’t and yet this value still leaks of some of the £100 billion spent each year on health and social care.
This article was written by Richard Haynes, founding director of The Community Gateway CIC. You can follow Richard or The Community Gateway CIC on twitter at @richardchaynes and @tcg_cic or visit their website at http://thecommunitygateway.co.uk