Sector leaders blame stalled social enterprises on government's 'mixed signals'

Fifteen social enterprise spin-outs from the public sector which were planned for London have stalled thanks to 'mixed signals' from government, claim sector leaders.

Social Enterprise London CEO Allison Ogden-Newton said her organisation knew of 17 groups looking to provide a social enterprise alternative to existing public services, but since the summer that number had dwindled to two.

Most of these organisations were hoping to provide health services under the Department for Health's 'right to request' programme. This gives NHS staff the right to request to set up their own social enterprise and provides funding through its £100m Social Enterprise Investment Fund.

Both Ogden-Newton and Association of Chief Executives of Voluntary Organisations (Acevo) CEO Stephen Bubb blamed the stalled projects on 'mixed signals' from government and in particular health secretary Andy Burnham's comments in September when he described the NHS as the 'preferred provider' of NHS services.

Ogden-Newton said that the people in public services who were responsible for outsourcing and commissioning 'stopped being enthusiastic' about social enterprise in the period after Burnham's comments.

'For the people who have put enormous amounts of time and energy into this [the London spin-outs] it's extremely frustrating and for them I feel the most sympathy,' she said.

'Government should be greasing the wheel and I'm flabbergasted at the resistance.'

She added that the development of social enterprises under the right to request needed 'co-ordinated support from central government - not mixed signals'.

Acevo, working with other partners, challenged Burnham's comments through the Co-operation and Competition Panel for NHS-Funded Services, but, as Social Enterprise reported last week, that case was dropped at the eleventh hour.

Following that, Bubb wrote to prime minister Gordon Brown protesting against the panel's behaviour and stating that Acevo members were 'reporting a wide range of instances where PCT commissioners seem to be discouraging provision from the third sector'.

In the letter he added: 'It has had the wider implication of undermining the government's policy on right to request.

'I know that you and Tessa Jowell have expressed strong support for mutuals and co-operators as a new vehicle to liberate talent and innovation. So I should point out that there are serious implications...for developing your vision.'

Ogden-Newton added, however, that she remained positive about the potential for more social enterprises to deliver public services because of the 'small but growing number' of public servants and the many community groups excited by the possibilities. She also pointed to government departments including the Ministry of Justice which are pushing for social enterprise provision.

'I think what we have here is a delay and we need government to gather its confidence and understand this is inevitable,' she said.

'I think the genie's out of the bottle and I don't think it's going back in.'