‘Reality lags behind rhetoric’ for healthcare and social enterprise, warns King’s Fund

Fierce competition could wipe out the nascent emergence of social enterprise healthcare providers unless they are offered better support and longer-term contracts.

The warning comes from the UK’s leading healthcare think-tank, The King’s Fund, in a major new report entitled Social enterprise in healthcare.

It says that the ‘reality lags behind the rhetoric’ when considering the government’s stated aim of  ‘creating the largest social enterprise sector in the world’.

Legal, financial and other support is needed to develop and grow the social enterprise sector and some start-ups will need to develop more robust business models, says the report. And it recommends that NHS commissioners need to offer longer-term contracts to enable social enterprise providers to establish themselves in a more competitive environment.

The report found early evidence to suggest that healthcare providers that have adopted the social enterprise model have benefited by reducing bureaucracy, speeding up decision-making and by allowing the reinvestment of surpluses, an effective motivator for staff.

Another perceived benefit of social enterprises is increased staff engagement – but the report adds that ‘simply moving to a new operating model was not found to be sufficient. Senior managers ‘

The government’s recent Open Public Services White Paper restated its commitment to encouraging public service mutuals as part of its agenda for diversifying the provision of public services. However, the numbers of staff leaving the NHS to form new social enterprises has not kept pace with this vision, says the King’s Fund.

Healthcare providers face challenges in establishing themselves as social enterprises, the report finds. ‘Some providers report that they are lacking the right support to manage staff concerns about changes to their terms and conditions, particularly pensions. Staff anxieties were reportedly added to by conflicting communications about the government’s health reforms.’

Dr Rachael Addicott, senior research fellow at The King’s Fund and author of the report, said: ‘Even at this early stage in the development of the social enterprise sector, it’s apparent that patients and taxpayers could really benefit. However, there is still a lot of work to be done by NHS commissioners, the government, and aspiring social enterprises to turn the vision of a thriving social enterprise sector into reality.’

• The government White Paper ‘Equity and Excellence: Liberating the NHS’, stated in ‘Our strategy for the NHS: an executive summary’,  at point 6 (r): ‘We aim to create the largest social enterprise sector in the world by increasing the freedoms of foundation trusts and giving NHS staff the opportunity to have a greater say in the future of their organisations, including as employee-led social enterprises.’
• The government’s recent Open Public Services White Paper was published in July 2011.