Another new year comes around and, with tedious inevitably, the social enterprise definition debate rears its many heads. The trigger for the latest exchanges is the fact that, shortly before the Christmas break, the Health Secretary, Jeremy Hunt, fulfilled his duty under the Health and Social Care Act 2012 and came up with a definition for social enterprise.
As reported previously, a relatively insignificant side dish amidst Andrew Lansley’s 18 month-long legislative dog’s dinner was the decision that contracts to run the new bodies set-up to scrutinize health and social care under the act, local HealthWatch organisations, should be delivered by ‘a social enterprise’.
Specifically, the Act states that a HealthWatch contract should be delivered by an organisation that:
“(a) is a social enterprise, and
(b) satisfies such criteria as may be prescribed by regulations made by the Secretary of State”
Many local authorities, not unreasonably given local HealthWatch organisations have to be up and running by April this year, have awarded their contracts already - in at least one case to a private sector provider - but on 18th December 2012, the Department of Health issued regulations that outlined Mr Hunt’s criteria. For those of you not keen to wade through the documents yourself, left-wing blog, Though Cowards Flinch, and my fellow social enterprise blogger, Leslie Huckfield, offer their takes on the most salient points, along with their views on the possible repercussions.
I’m not going to add to growing worries about unnecessary replication in civil society provision by attempting my own dissection of the definition itself but it is worth looking a bit more closely at the implications of its existence (for the social enterprise movement, in particular). Leslie Huckfield believes that: “Following precedent, there is now every possibility that this definition will be replicated in Regulations under other legislation.“
The point being that now a cabinet minister has defined social enterprise – as part of a new law – this definition will become the definition used by government. Civil Society spoke to two social enterprise leaders, Lucy Findlay, managing director of the Social Enterprise Mark Company, and Ceri Jones, head of policy at Social Enterprise UK, and got two slightly different perspectives. Findlay’s comments focused on the issue of whether the definition would allow private companies to run HealthWatch organisations (and apparently, by extension, other health services): “This allows for ‘sham’ social enterprises – being used as a front for potential bidding for health contracts and will further blur the lines with regards to the privatisation of the NHS.“
Jones, on the other hand, offered her response answer to the question of whether the new definition sets a precedent: “This is simply the Department for Health defining the structure of Healthwatch bodies,“. She expands on this point in an article on the Third Sector website saying: “But this won’t set a precedent… I don’t think that as we see more commissioning from social enterprise we will see government try to define more closely what it is.”
It seems, for all the excitement around this announcement, that it’s actually just business for the government in terms of its attitude to defining social enterprise. The approach has been and will continue to be that any government department that feels it needs to use the term social enterprise in legislation or to define recipients of its funding programmes is left to come up with its own social enterprise definition on ad hoc basis.
Government departments clearly do have to take decisions about which types of organisations are eligible to deliver contracts (and/or receive funding) based on a range of factors but it’s not clear why this means they have to continually use social enterprise as an elasticated catch-all term. There are plenty of other catch-all terms they could use without damaging a social movement in the process.
Pioneers Post’s Matt Black posed his characteristically insightful 5 tough questions for UK social enterprise in 2013 this week and question 4 asks ‘Can brand ‘Social Enterprise’ keep clean?’ adding: “One area of growth in the social enterprise marketplace will come from CICs, mutuals and other employee-owned, public service spin-outs… Some of these organisations are thriving but in the public eye will they simply be perceived as privatisation?.. Will the public feel the same way, or can they be convinced that social enterprise is a genuine alternative to business as usual?“
This is a big danger for the social enterprise movement. It’s particularly unhelpful for social enterprises looking to sell products and services to the public in consumers markets if there’s headline in the local paper saying: “Health contract goes to ‘Social Enterprise’ owned by hedge fund”.
There’s no logical reason why the description given to groups that the Health Secretary deems eligible to run HealthWatch needs to be ‘a social enterprise’. It could just as usefully be ‘Civil Society Organisation’ or ‘Community Organisation’. Many private companies and all charities relying primarily on grants and donations (other than the HealthWatch contract) will be eligible under the regulations.
While it’s Andrew Lansley’s fault – not the fault of Social Enterprise UK, or anyone else in the movement who’s been involved in making the best of a bad situation by helping to put together these regulations – the only thing social enterprise gets out of this is the blame.
I’m not in favour of some kind of once and for all definition of social enterprise or ‘a social enterprise’. I don’t think it’s either possible to achieve or desirable. What is possible and desirable, though, is for the government to choose a definition of social enterprise that it applies consistently across departments, so that organisations and commissioners can be clear what it means when government uses the term.
Matt Black’s tough Question 5 is ‘Will the definition debate be settled once and for all?’ and his answer is ‘nope’. He’s right but the government can settle its own position and, if it does so, it can help make it easier for social enterprises to engage with the public sector and represent themselves to the wider public.