Saturday, March 23, 2013

Why Social Enterprise is the Future in Public Services

Social enterprise is the only real future for public services.  The challenge at the moment is that hardly anyone in the public sector understands this yet.    Some cling to the idea of an improved public sector offer, or quasi-business conducted by arms-length companies.  Others cleave to the private sector, as though that were the only way to delivery anything properly.    However, for a small minority, the penny has dropped - that the best form of delivery for the bulk of public services is neither public or private but something else - a form of enterprise which is independent, managed as a business but run for exclusively social purposes.

So what's so special about social enterprise?   Three things.  The first is freedom.  These organisations are independent and free to fulfil services as they see fit, whether these are spin-out businesses like Sandwell Community Care Trust (formerly Sandwell Council Day Services) or the scores of Academies now dotting the landscape.    Decisions quite rightly sit with the boards of these organisations and the professionals in them.  It  is pushed down to the  rather than sucked up to the wrong level.   While most us us understand the life-giving role of freedom in the private economy, many of us don't, somehow, realise that the same is required when it comes to public services.  As a result, politicians, and the senior people they appoint, create the opposite of freedom      When my company, Stepping Out,  sets up a social enterprise out of the public sector, the hardest argument to win is for its total freedom -in preference some semi-free arrangement with its former parent.   Freedom is the oxygen.

The second is the people-factor.   Services are made up, in part, of paid people.   People either like the organisations they belong to or they don't.   They either feel involved and valued and trusted or they don't.     For many complex reasons,  great numbers of people in public services do not  good about their organisations.    Despite years of investment and trying, the public sector has struggled to achieve the kind of buy-in necessary to really change the way services operate.  Social enterprises, by contrast, are, by and large, staff-owned and recognise the critical role of people in raising productivity, innovation and improvement.   Absence rates tell part of this story (far better than in the public sector) but also what people say about their companies.  It is no accident that several social enterprises are now listed in the Best Places to Work awards every year.

The third, and perhaps, the most powerful reason why social enterprise is the future of public services is that further improvements in our public realm (better public health, stronger communities, improved education, safer streets etc) depend not on more public services but more effective conjoining of public, private and community resources.   Sixty years ago, the poor state of public health demanded, quite rightly, the creation of a single national NHS.   Likewise, the patchy provision of education for working  class children necessitated Local Education Authorities and councils building schools.     Today, the challenges are different.   Beyond the provision of the very basics, pushing through to the next level in health, education and so on requires a far more nuanced approach to public service provision.    To enable this we need to create provider landscapes in all sectors which allow other types of provider to develop and to encourage types of provider - like social enterprises - which, in their very DNA, are built to recognise the often dual role of citizen as user and producer of services.   

Take substance misuse as an example.   This costs the country tremendous amounts in police, court and NHS costs, not to mention the uncosted misery to all involved.   No level of additional public services are going to dent that problem.   The main solution actually lies in helping those in recovery to support those still deep in the problem.   More structure and scale around things like abstinence-based support is probably our best hope both for the people struggling with addiction and for the taxpayer.    The organisations best-placed to add the necessary structure and scale are, yes, social enterprises, whether these be existing charities like Focus 33 in Bury St Edmunds (where Russell Brand came) or new ex-public-sector organisations like Spectrum in Wakefield.   Can the state also work in this way?  No, it can't - because, unlike civil society organisations the state isn't well-placed to put together the complex suite of resources needed to solve problems.   These comprise the efforts of individuals, their families and friends, the wider community, the business community and the state itself.  Crafting them into a person-shaped solution is what social enterprise, in its many forms, including spin-outs from the public sector is best at doing.

Despite the self-evident nature of much of this, the argument is a long-way off won in the long-corridors of the public sector.  Talk to many people in Councils, Whitehall or the NHS about social enterprise and you can count the seconds till they glaze over.   It's not just normally something they think about much.  They are still living the dream that their world is still intact when the rest of 21st century Britain has long since pulled ahead.   At very close quarters I see some Councils and parts of the NHS where the only way you can tell you are not in 1986 are the grumpy emails (copied into about 80 people) by which most communication appears to be done.   Practice around culture, management and customers are all light years behind where they ought to be.  

If this sounds like a counsel-of-despair, it isn't.  I am actually very optimistic about the future.   Things are now happening in public services that are showing the way.   This is being accelerated by the financial crisis in the public sector which is going to last well into the 2020s as the business-model of public services is eventually superseded by something far more sustainable and successful.

And the shorthand I use for that model is social enterprise. 


Anonymous said...

Local Government and the public sector as a whoile is run by Governance and policy from Whitehall.

Social Enterprise will never be fully adopted because the molst important aspect of Whitehall Governance, the overall council budget, will always be controlled by Central Government.

Local authorities always then have autonomous control over what to spend. The public are crying out for consultants to be removed from the public scetor due to the vast amounts of money spent on them. How can a company telling the sector how to spend taxpayers' money effectively, all for, presumably, a large profit, be defended?

ian Hanton said...

The substance misuse reference is a good one in that the public sector is addicted to command and control without the insight that their addiction is damaging both internally and to the wider public realm they're supposed to serve.

To continue the analogy, denial is a very powerful barrier to change.

In true AA style the public sector needs to step forward and admit they have a problem and embrace social entrepreneurship whilst dropping the monopolistic and profiteering behaviours that some choose to adopt.

I think ideology and investment is fleeing from social enterprise as the big bucks court the private sector corporates now increasingly masquerading as social business - an oxymoron if there ever was one