Thursday, August 26, 2010

Walking with Dinosaurs

According Social Enterprise Magazine's Gemma Hampson, this week Unison is taking the Department of Health to court over its refusal to consult on the recent white paper, which stated the department wanted to create the ‘largest social enterprise sector in the world’.

Unison claims this is unlawfu, due to lack of consultation, and started legal action yesterday against health secretary Andrew Lansley and his plans for the largest social enterprise sector in Europe following the disbandment of PCTs and SHAs.

‘The Department of Health’s refusal to recognise this clear and important legal duty leaves us no option but to issue legal proceedings as a matter of urgency.’.

Unison said the public was ‘deeply suspicious’ of the government’s plans to create co-operatives and social enterprise health service providers and that the ‘any willing provider’ initiative would mean ‘more private companies coming in to grab a share of the health market’.

Unison’s concerns include a fear that social enterprises would be taken over by multinational private companies and be too management led.

A Unison spokesman said: ‘Social enterprises contain a number of risks. It is quite possible that a multinational might look to break into the market by taking over a successful social enterprise that started to make a good profit.

‘Under the so-called right to request scheme [which gives NHS staff the right to request to set up a social enterprise through their primary care trust], social enterprises get a contract for three years, but after this there is no guarantee of what happens to the services they are delivering. Equally there is no guarantee that such organisations will survive for the full three years.

‘The stated benefit of social enterprise – that employees have a greater stake in the organisation and therefore provide better service – is undermined by the fact that very few of the prospective social enterprises in the health service have actually been driven by a bottom-up demand from health staff. They tend to be management-led initiatives where employee engagement is little more than an afterthought.’

OK, let's look at this point by point. Yes, a multinational might take over a social enterprise. But this could never be a hostile takeover as the shares are not publicly traded, the members of the company have a choice in whether or not they are taken over and the asset-lock places clear limits on profit taking. Only if the multinational is willing to run the business as a social enterprise, can it be taken over. A final point here is that we might actually want, in particular cases, certain social enterprises to be taken over if this helps to further capitaise them - and encourage the better corporates (for they are not all the same) to broaden their range of activity.

Second point, contracting. True, there is no guarantee of anything after three years. Well, sorry Unison, this is how the world works. In fact most companies do not even get gifted three years in the first place. The reason it is important not to guarantee lifelong contracts is that once these are let, the company has little incentive to become more efficient or innovative, even in the care sector. Having to win on merit shouldn't scare anybody who is good at what they do. And whatever happens, staff are protected by TUPE, so I struggle to see, from a union-rep's perspective, what the problem is.

Thirdly, the management-led nature of Right to Request. Let's be clear here, ANYBODY in the NHS has the Right to Request: physios, nurses, you name it. Some have done this but, yes, most R2R have come from management. Again, I struggle to see what is wrong with this. The fact that the NHS has managers who believe they can take the service to a new level and be a bit more entrepreneurial about it deserve encouragement, not rebuff. I have personally worked alongside two CEO-designates of new social businesses and they are two of the most committed, passionate and socially-minded managers I have ever met in my life. To give them a hard time over their intentions is to miss the point entirely.

The reason that the social enterprise sector is getting all this stick is manyfold. The unions themselves are dominated by the old-left who do not represent the political spread of their membership. Intellectually, they have failed to move from the position of statism and they cannot see its limitations.

The danger in their posturing about social enterprise is that they are missing what a huge alternative opportunity it presents to their dread-scenario of wholesale privatisation of the NHS and Councils.

For, unlike, the global outsourcers, social enterprises are committed to returning profits to community, to social ownership and are highly generative of participation and wider public involvement. They are often embedded in their communities and much-liked by residents - see Local Care Direct in West Yorks or Sandwell Healthcare in the W Midlands. These organisations are part-business, part civil-society organisations. Unison et al need to see that they are not the real enemy.


Mark Griffiths 'ideally speaking...' said...

This week Unison, last week the 'scandal' of 0.5% of NHS funds being spent on external consultants. It just shows the barriers and obstacles facing the pioneering but as yet little understood world of social enteprise, Craig.

David Floyd said...


I understood why you struggle to see what's wrong with much of this from your position as a social entrepreneur but I think it's fairly obvious what's wrong from the point of view of a trade union and many of their members.

Management-led right to request set-ups are bad for trade unionists because workers end up in independent organisations with reduced collective bargaining power.

Social enterprises with three-year contracts are less secure places for trade unionists to work than within the NHS because it means that they will be more likely to be made redundant and they are likely to be made redundant on worse terms, particularly if the enterprise goes bust (the NHS cannot go bust).

It's difficult to imagine a situation where a multi-national takeover of a former public sector services would result in workers getting better pay and conditions, and more secure employment.

Beyond their ridiculous use of 'so-called' for the right to request scheme - it may or may not be a good thing but that definitely is its name - Unison's position re: NHS/social enterprise are entirely understandable positions for an organisation that represents public sector workers (as opposed to the general good of the nation).

That's not to say that social enterprises and unions can't find common ground (or that there aren't already lots of successful working relationships between social enterprises and unions) but the general fears about what could happen are not unreasonable from the point of view of many workers.