Social enterprise somehow replacing the state

Barely a week passes without one politician or another reeling off (generally through the medium of a junior press officer) a statement about how The Big Issue and The Eden Project demonstrate how social enterprise will solve all the problems faced by the NHS. Care Services Minister, Paul Burstow is the latest to do so, probably delighting (amongst others) residents of Bristol with the news that their PCT’s community health service will be turned into a magazine and sold to them by the homeless.

Compared to much of the political rhetoric around social enterprise and public services, this article in the Daily Telegraph by Julie Meyer (of the online version of Dragons Den) is relatively sensible. She discusses the work of socially useful businesses (there will be a variety of views on which of them are social enterprises) and uses their success as the basis for the argument that:

“The role of government in solving society’s problems decreases as social entrepreneurs, capitalists and industrialists arrive. Government can thus focus on restoring its own balance sheet and undertaking those things that only governments can do, such as providing safe cities and international security.”

The problem is that the gap between the good things that these businesses do – making it easier for people to donate to charity online, providing medical information for children, offering micro-finance to young people who want to start businesses – and the basic functions of catching criminals and defending the borders is a big one. So big that it’s currently filled with more or less everything that the UK government does.

There’s lots of interesting ongoing discussion about the extent to which the state should or shouldn’t be involved in the direct provision of all the services that current fit into that gap – including education, healthcare, social care, firefighting, pensions, public transport and infrastructure, pensions, welfare benefits (including back to work services), sweeping the streets, collecting the rubbish etc. – but as yet very few credible suggestions about how anyone other than the state might actually pay for it.

Many of us in the social enterprise movement are instinctively sympathetic to Julie Meyer’s suggestion that ordinary citizens should get involved in reforming society and that we should all be looking at how we can tackle social problems without continually demanding that the government do something about it. Whether or not the Daily Telegraph is their paper of choice in terms of its politics, many social entrepreneurs feel that a situation where the state continues to assume (often by default) ever growing responsibilities which it doesn’t have the resources to discharge effectively both disempowers people and sets the state up to fail.

But the social businesses currently being highlighted – from the corridors of power to the pages of the Telegraph – are not directly relevant to solving that problem. They do not and cannot – on a national scale or on a commercial basis – offer the social safety net that some want, let alone the active, enabling society that many others prefer.

Given that, irrespective of any of our political views on the matters, the UK state is going to shrink significantly over the next five years, it’s important for the social enterprise movement to consider whether it really does have any commercially viable and social positive ideas for replacing some of the public service that will disappear. Otherwise we aren’t looking at a hole in provision filled by social enterprise or the Big Society, we’re just looking at a big hole.



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6 responses to “Social enterprise somehow replacing the state

  1. Pingback: Tweets that mention Social enterprise somehow replacing the state « Beanbags and Bullsh!t --

  2. Sion

    Similar thinking going on in the co-operative movement. In addition to the concerns you’ve outlined, we have the issue of autonomy (the 4th principle). How can a service provider be a co-operative if it has only one paying client (the state), which also sets its business plan and its performance targets? This is why the most fertile ground for co-operative initiatives may be in things like social and childcare, GP commissioning consortia or home insulation schemes.


  3. beanbagsandbullsh1t

    Agree that autonomy is an issue. Also interested in the Co-operative movement’s view on possible situations where workforces may be offered the chance to either form a co-op to deliver a public service or be made redundant.

    Will there need to be a new organisation form? Perhaps it could be called a ‘shotgun co-op’?


  4. David

    Good piece. Like the fact that you quoted Julie and read the Daily Telegraph (never guessed)

    Ultimately the state will be smaller. What takes its place will be interesting indeed

    take care, rod


  5. I think the gap will quickly be filled by a new generation of accountable, sensible public sector bodies. Right now public sector orgs define themselves by what they cannot do rather than what they can do. They focus on often self imposed rules, rather than need. That has to change.


  6. beanbagsandbullsh1t

    Thanks, Rod. I think it’s a good thing that mainstream businesspeople like Julie Meyer are starting to engage in discussions about what social enterprise can do – so definitely worth reflecting on what she’s got to say.

    Robert, you definitely hint at a interesting discussion re: how we work out what the public sector – and social sectors more broadly – needs to do. Markets are not enough because many (if not most) of these services exist as some form of correction to market failure. Democratic structures are important and so are the specific needs of individuals, and the wider needs of society as a while. How do we balance limited resources against these factors?


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