Opinion: The odds are still against social enterprises providing public services | The social enterprise magazine

Ten years ago things looked a little different in Britain. Beyond the achievements and spectacle of the London Olympics, social enterprises enjoyed growing recognition in 2012. The previous Labor government encouraged NHS spin-offs and provided funding to social sector organizations through the Futurebuilders Fund and the Social Enterprise Investment Fund. The coalition government had created Big Society Capital, pushed social impact bonds and promoted public service mutuals. The European Commission launched the Social Business Initiative and the UK Parliament passed the Social Value Act.

Rose-tinted memories? No. The same year saw a double-dip recession across much of the eurozone and a 17-year high in unemployment in the UK. Austerity was biting: non-statutory services were slashed; millions of households with children were plunged into poverty. Although some social enterprises delivered public service contracts with real innovation, major problems prevented them from doing more.

Many commissioners and other government decision makers had a poor understanding of social enterprise. Even if they understood, public procurement was an obstacle. Social enterprises have searched in vain for suitable capital and struggled to access available social investments.

Many government decision makers had a poor understanding of social enterprise

This was the landscape when we launched E3M to support the growth and impact of social enterprises that run public services to meet local needs. To achieve this, we have brought together social enterprise leaders, government commissioners and social investors and funders, alongside professional service partners.

Pioneer purchases

What has E3M achieved over the past ten years? Significant and practical developments. E3M has supported the pioneering use, in Leicestershire and Oldham, of Innovation Partnership, a new procedure available from 2015 to enable contracting authorities to “select partners on a competitive basis and have them develop a solution innovation adapted to their needs”. Oldham and Leicestershire have used such partnerships for the first time in the UK, since being recognized for improving outcomes for children, residents and community partners by independent assessors and in public sector awards.

Today, more commissioners understand how they can deliver social value, partner with social enterprise suppliers and how sourcing regulations need not be an issue – a recurring theme in our work and central for The art of the possible in public procurementwhich we published in 2016.

The silos are also collapsing. E3M has developed our methodology for local events, bringing together social enterprises, curators and funders to address local challenges. We’ve called this series of events ‘Alchemy’ because mixing different perspectives can bring about change – our pilot program involving Oldham, Rotherham and Gainsborough has unlocked over £12m of social investment for new health solutions. social enterprise.

We’ve since commissioned YouGov to study attitudes towards outsourced public services, finding that people trust social enterprises more than private companies to deliver them, think they do so with more confidence. expertise and value for money, and would prefer public authorities to contract with goal-oriented companies. organizations such as social enterprises as private enterprises.

We’ve launched our Procurement to Partnership Toolkit to help commissioners who know that regulations aren’t barriers to commissioning for social value, but need answers to common barriers. And we defend our members. For example, Big Life Group (pictured above) has more than doubled its turnover since 2012 to £21m, opened two new primary schools, produced a news app and expanded its services . CEO Fay Selvan calls E3M “a lifeline, a place to meet CEOs running similar businesses, facing the same issues”, and describes it as “a network to access expertise in social investing, governance, procurement ; and keep abreast of government policy”.

Go back?

These achievements have come despite the remaining odds against social enterprises in public services. Risk culture and attitudes are the main obstacle to progressive public procurement. The new public procurement bill has been announced to support innovation and simplify the rules. But what really matters is how the rules are interpreted, which depends on the guidance that comes with them and the training and support given to those who apply them.

Social enterprises always need results-based financing that takes their circumstances into account. They must have access to appropriate and flexible patient capital, as described by the Adebowale Commission on Social Investment.

It is as if the understanding had receded at the political level. Some government officials believe that contracting with social enterprises is more risky than contracting with private sector contractors. This is contrary to evidence published by Social Enterprise UK and the growing recognition within local authorities and communities that the public interest should be the exclusive basis for organizing public services.

Some government leaders believe that contracting with social enterprises is riskier than contracting with private sector contractors

We need more public authorities working with mature social enterprises as partners to deliver public benefits and meet local needs. We need to distinguish mature social enterprises, which generate between £10m and £100m, from the traditional nonprofit sector. These mature social enterprises work within a larger ecosystem, the social economy, in which local charities and community organizations are natural partners.

In countries like Spain, there are clear measures to promote the social economy – legal forms; tax breaks for cooperatives; ways to capitalize unemployment benefits to start new social enterprises; and regional laws and social economy support programs. In the UK on the other hand, and especially in England, we lack this set of coherent support measures operating at national, regional and local level. We no longer have a social enterprise strategy in the UK. Now may be the time for Westminster to develop a cohesive approach.

The times are changing. Public interest in social enterprise is higher than ever. We are seeing more and more public and media debate about market failures in outsourcing. E3M members transform their communities.

The next ten years will bring many challenges. Few expected a global pandemic, but the agility, flexibility and tailored responses of social enterprises and local authorities to community needs have protected the vulnerable and saved lives. Social enterprises could play a much bigger role in improving public services. As E3M enters its second decade, we stand ready to unlock new collaborations, share learning, influence the policy environment, attract more relevant social investment, and help purpose-aligned organizations to develop systemic collaboration in the public interest as a normal means of providing public services. .

  • Jonathan Bland is Managing Director of Social Business International, which oversees the achievement of E3M’s goals and events. Julian Blake is a partner at national law firm Stone King LLP, a lead partner of E3M; Julian has been involved with E3M since its inception in 2012.

Top image: A friendship event organized by Big Life Group, which tackles inequality by working with people in all areas of their lives (photo courtesy of Big Life Group)

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