Sunday, September 25, 2011

Is the Coalition Serious about Mutuals and Social Enterprises?

It feels to me that we’re at an important point in the discussion about UK public services.

While there are always debates about the role of government as a provider, there is an emerging question that cuts through all of this – How do we create successful public services when the country’s economy is in a ten-year plus dip?

And if we are to open up public service markets, which I think we must, are these to be more like free markets - or managed ones in which a new ‘social economy’ – to include mutuals and spun-out public services - are given scope to emerge?

The answers will shape just how the social enterprise and mutuals sector shapes up – whether we see a steep or gently rising curve in the number of people leading spinouts.

How does it look to me? Mixed. While the Coalition Government are happy to support the ‘supply side’ around this agenda– by priming the early emergence of these ventures – it is not apparent yet as to whether the commitment is there is to a ‘social economy’ in public services as distinct from a pure free market.

Evidence to date suggest that while the Government likes mutuals and social enterprises, its larger concern is to open up markets - even if this means that new social enterprises struggle to gain foothold against larger, far better funded players, as Central Surrey Healthcare (Francis Maude's favourite mutual!) showed when pitted against Virgin-backed Assura.

To what extent the Coalition – or any successor Government – would be willing to manipulate public service markets - or even tilt the table - to favour social enterprise is still a question to be answered.

While nobody thought Maude should have been on the phone to Surrey telling Commissioners what to do, it surely was clear to him that something isn't working quite right in his intended world of Open Public Service. However, in his bones, Maude doesn't feel comfortable meddling with free markets. He is, after all, a Conservative first, a supporter of mutuals, second.

The hard truth is that for this sector to become established it need commitment on the part of government not only to the supply-side - initiatives such as the Mutual Support Fund are extremely welcome - but also the 'demand'. side.

What does this mean in practice? It means a more actively managed marketplace for public services. It means smaller providers being guaranteed a role as happens in the US. It means the Government saying, clearly, as a policy objective 'We want, as part of our commitment to open public service, a vibrant social enteprise provider sector - and we're willing to take the steps necessary to ensure the market delivers this'.

It is these last 13 words that are missing from the Coalition's current approach.

Let me be clear: I do not believe anyone should get a free lunch. I believe in a diverse public sector which includes the private sector. Most of the people leading spin-outs tend to share this view.

What they want isn't more money or subsidy from Government. Far from it. What they most want is a signal from Government that they take this sector, as a whole, seriously. Whether the commitment is to a much larger social economy sector in public services. Or whether we're going to be left to a system which, at the moment, means that many of our best organisations will struggle to win anything but the smallest of contracts.

That is the real question for those leading this agenda in Government.


David Floyd said...


This clearly is the big question.

What would this 'signal' amount to in practice?

Are you suggest a quota of contracts that should be reserved for social enterprises?

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