‘I have looked at the Social Enterprise Coalition’s definition of social enterprise and there’s a risk of defining social enterprise so narrowly that others are not included'
Health secretary Andrew Lansley (pictured)
A battle of definitions exploded today after health secretary Andrew Lansley said the Department of Health’s vision of the ‘largest social enterprise sector in the world’ may not fit with the ideals of the sector's umbrella body.
The Social Enterprise Coalition has warned that 'the fundamentals of social enterprise will get lost or distorted' if companies are 'encouraged to call themselves social enterprises if they are not'.
Speaking to Social Enterprise after his address at today’s Acevo health conference, Lansley said foundation trusts would have ‘characteristics’ of social enterprise.
However, he admitted they may not fit the idea of social enterprise promoted by the Social Enterprise Coalition.
‘I have looked at the Social Enterprise Coalition’s definition of social enterprise and there’s a risk of defining social enterprise so narrowly that others are not included,’ he said.
When pressed by Social Enterprise on how foundation trusts would operate as social enterprises, Lansley said: ‘They are outside of direct government control and they have their own objectives.’
He added that trusts' current form, the public benefit corporation, was capable of delivering the same social impact and could be seen as a new social enterprise structure. He rejected the idea of incorporating foundation trusts as community interest companies, although he said new providers may wish to explore this legal form.
But responding this afternoon, Social Enterprise Coalition CEO Peter Holbrook claimed that foundation trusts 'cannot be called social enterprises'.
Holbrook said: 'Social enterprises are wholly independent organisations, and operate very differently from foundation trusts. Even with more freedom and flexibility outlined in the DH's white paper, foundation trusts will not be fully autonomous, and therefore cannot be called social enterprises.
'While we want to see social enterprise principles integrated across the private sector and public sector, there is a danger that the fundamentals of social enterprise will get lost or distorted in the process, and we must be vigilant to ensure that does not happen,' Holbrook said. 'We do not want to see companies allowed to call themselves social enterprises if they are not.'
He added: 'There are already many social enterprises operating in healthcare, and we're pleased that the government wants to expand their role and learn from their example. We look forward to working with the Department of Health going forward to ensure that social enterprises can play a strong and substantive role in creating a better healthcare sector.'
The Department of Health (DH) said in its white paper, published on Monday, that its ambition was to ‘create the largest and most vibrant social enterprise sector in the world’ by giving more freedom to foundation trusts, along with giving GPs commissioning powers and patients more choice.
Responding to Monday’s white paper, Holbrook said earlier this week: ‘There does seem to be some confusion as to the differences between foundation trusts and social enterprises.’
Lansley added today that the DH view of social enterprise wasn’t only about employee-ownership models, but giving opportunities to charities and voluntary organisations through the government’s ‘any willing provider initiative’, which aims to create a level playing field. These organisations would then be paid by results, or paid by ‘performance’, as Lansley preferred to refer to it today.
During this morning’s address, which he said wasn’t a formal speech, Lansley failed to mention social enterprise specifically, but said that the voluntary sector was at the heart of the government’s vision of the health service.
‘There’s an opportunity because we are looking for innovation, and it’s something the voluntary sector can deliver better than anyone else,’ he said.
‘As a government we are going to be open to new providers and the voluntary sector is at the heart of that.’
...as Susan Boyle might have sung. On SocialEnterpriselive.com this week:
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Comments
It's not the definition - it's who gets to decide
I don't believe that this is the opening of another debate about what is a social enterprise. I think the debate is more about - who gets to decide? And the answer is - not politicians. The change in government has given us the opportunity to recognise the perils of being too close to the detailed policy agenda of a particular government and the need to be independent so that we can protect our best interests. I was heartened to read Peter's robust response to Andrew Lansley's comments and I think that we should get behind SEC (I was just about to say 'the coalition' but of course that has also been appropriated by politicians!)to defend the sector's own right to define itself, or indeed decide when it doesn't matter.
Ultimately, I think we should be arguing for the same status as some other European countries, where there is a legal definition and tax advantages. In my view it's a pity we haven't been lobbying for this over the last 12 years. Perhaps we should start now? I don't understand why we have only been asking for tax breaks for investors and not for the enterprises themselves. It would provide a real incentive for all those traditional businesses doing socially beneficial things to take the plunge and become actual social enterprises. And I think it would be a much more sustainable way of growing the sector rather than trying to colonise the voluntary sector or public services.
Nicky Stevenson
Local SE investigation
There may well be a crucial case of ownership and accountability arising in the next few weeks in my locality, the Forest of Dean where public disquiet follows revelations that a healthcare SET which had been rejected for funding by the SEIF, were able to access council tax coffers and spend it on consultancy for setting up a CIC which never traded.
With my own question raised in council 3 months ago, as to why assistance offered from an established local social enterprise was not taken up, this week Councillor Bruce Hogan will question council on who knew of the SEIF rejection when council funds were borrowed.
The SET was apparently set up by consortium of local businessmen and doctors.
With my own social enterprise providing assistance gratis to the local parish and community led plan, which requires demonstration of a community mandate for consequent development, naturally, the question I'll be asking is why similar constraints aren't applicable to this and presumably any other group with local funding influence.
What this case reveals may well be a test case for public funding of social enterprise with implications for any plans to establish social enterprise hospitals without a public mandate.
Jeff Mowatt
People-Centered Economic Development
p-ced.com
people-centered.net
defining social enterprise
Let us not over complicate this as to be a social enterprise you have to demonstrate how you respond to the 3 key principles.
Firstly that you are fundamentally a business - directly involved in producing goods or providing services to a market.
Secondly you have explicit aims that benefit the workforce, local community or other groups, such as job creation, training, improving the environment or the provision of local services.
Finally, a social enterprise is characterised by its social ownership. They are independent but set up so their ownership structure is linked to participation by groups such as the employees, users, beneficiaries or local community groups.
Way back in time
It was interesting to refer back to the SEC interpretation from an earlier time. This illustrates that the SEC appear to have adapted since to the DTI definition of the time.
http://web.archive.org/web/20021003212315/www.socialenterprise.org.uk/faq/index.asp?CatID=1
For many the definition may be too narrow for others too loose. All it seems want to be seen with a "social" label.
Then along comes the DoH with a different interpretation to all of us which none of us may view as social, but we don't have a congruent set of principles to argue against it. They have the influence to implement it, whether we like it or not.
Jeff Mowatt
People-Centered Economic Development
p-ced.com
people-centered.net
Bananas!
There's no doubt in my mind that many define 'social enterprise' too narrowly. Equally, I have no doubt (and indeed know from my work) that a surprising number of new business starters are actually undiagnosed social entrepreneurs. Quite simply, they want to make a difference every bit as much as they want to make money.
But a Foundation Trust a social enterprise? I'm a Governor of one and from what I've seen, whilst it's clearly populated with many people with a strong social mission, as a whole it can never be a social enterprise.
I'd compare a Foundation Trust to a health 'shopping mall'. Within it will be some departments such as perhaps a pathology lab, that of necessity are state funded core services. There might also be some social enterprises, perhaps the diabetes clinic that contracts to its host organisation but also delivers an array of additional services for which people pay, thus enabling them to improve their core service and improve their capacity to provide additional unfunded work for people who otherwise would miss out.
My understanding and experience of 'Right to Request' and the work of the excellent NHS 'social enterprise investment fund' is that they are tools to enable teams to set up social enterprises under the umbrella of the NHS.
To say that a Foundation Trust is a social enterprise in its entity is like saying a bowl of fruit is a banana because it might contain a banana!
Robert Ashton
www.robertashton.co.uk
Faux Social Enterprise, then?
To me, the SEC definition is pretty broad. So what they have in mind has to be worrying.
"Social enterprises are businesses trading for social and environmental purposes. Many commercial businesses would consider themselves to have social objectives, but social enterprises are distinctive because their social and/or environmental purpose is absolutely central to what they do - their profits are reinvested to sustain and further their mission for positive change."
That's pretty much how we see it too, albeit with a different name.
http://www.p-ced.com/1/about/
So what could he mean other than a company that doesn't reinvest for positive change?
That can't even be described as Faux social enteprise.
Jeff Mowatt
People-Centered Economic Development
p-ced.com
people-centered.net
new speak
Doesn't this say it all? Sell the policy with the old language, then redefine the language to fit your needs. So suddenly: it's an enterprise and it deals with social (aka health) stuff, therefore it's a social enterprise (and eventually conveniently embraces BUPA, BMI etc). Now why didn't we see that one coming???