Trade unions and the social enterprise movement – (hopefully) things can only get better

As we prepare ourselves for a pretty nasty couple of months, followed by a challenging couple of years (at least), it’s a good time to examine some of the big challenges the social enterprise movement and social enterprises face in navigating a path through the storms ahead.

When it comes to a potentially increase in the role of social enterprise in delivering public services, there’s a clear need for the social enterprise movement and the trade union movement to develop a more positive working relationship. While some social enterprise employers engage positvely with unions representing their workers, at the level of policy rhetoric the relationship could hardly get much worse.

To take some examples, leading social entrepreneur Craig Dearden-Phillips, of spin-out specialists, Stepping Out, isn’t keen on unions’ general attitude to public service reform. His charge against unions is: “you have, over time, morphed into from your better beginnings – as defenders of preferential terms and conditions for your members, regardless of how unsustainable these are and how much they cost the ordinary taxpayer.”

As a desirable alternative approach from the brothers and sisters, Craig proposes that we: “Look at Germany where the unions sit on boards. That’s what we need. Sharing, diversity and responsibility. A place at the table. A shared interest in the running of businesses. For me this is what social enterprise is about.

Wielding the water-pistol of rhetorical ire most prominently from the other side of the fence is Unite the Union (other unions, such as Unison, have similar starting points but often communicate their positions with slightly more subtlety). Unite’s approach to social enterprise is epitomised by this piece in September’s Social Enterprise magazine from assistant general secretary, Gail Cartmail, who informs readers that:“The centre piece of this privatisation agenda is ‘social enterprise’ – warm words disguising an open sesame to private companies wishing to grab more lucrative NHS contracts. This will be mirrored across government with local authorities and education also in the frame for this ‘liberation’.

This is followed by the assertion that: “Unite’s experience is that in the NHS a few managers tend to push for social enterprises with only the most cursory consultation – but when staff are consulted there is a massive rejection of the social enterprise concept.” and, after some points about why privatisation is generally a bad thing, we’re hit with the, er, clincher:

“Social enterprises, being one step removed from the NHS, will erode pay and pensions of staff, making it difficult for the NHS to recruit and retain staff.”

We can only assume that the Unite press officer who drafted this article for Ms. Cartmail had for some reason not received the briefing note explaining that Social Enterprise is a magazine primarily read by people who (at least think they) know what social enterprise is and have chosen to work in the social enterprise sector. Call me an evil, scheming Alastair Campbell-clone but I’m not too sure you’ll win many social entrepreneurs over to the cause of workers rights by implying they’re nothing but dupes for a right-wing privatisation agenda.

Unite have a history of run-ins with social enterprises. While I (apparently controversially) don’t accept that they should duck confrontation with employers simply because those employers are a social enterprise, I also wonder if they’ve fully considered some of the possible alternatives to their current unremitting antipathy.

One thing that most trade unions and most social enterprises in the UK share is being fundamentally pragmatic in their approach to social action. Despite a few famous exceptions, most unions in the UK have always been (and are now) committed to getting the best deal and provided the best possible protection for their members in any given set of circumstances. And most social entrepreneurs use whatever resources, skills and support they can muster to bring about as much positive change as they can for the people they’re trying to help (usually including workers).

When it comes to the current debates about public sector spin-outs, the big mistake on the social enterprise side is to avoid considering the possibility that replacing a publicly-delivered service with a social enterprise won’t necessarily be a good thing for the workforce of that service, and to completely ignore the possibility that this may be the case even if the new social enterprise actually provides a better service.  Neither of these points – particularly not the second one – is necessarily a reason for social entrepreneurs to stop trying to create spin outs but they’re vitally important points to be aware of.

People who work for large social enterprises doing normal jobs are signing up to a very different package to people who set up an exciting social enterprise web businesses with their maters. Why should they be expected to accept a worse deal on pay and conditions, or a higher risk of redundancy, than public sector counterparts just because wider society (in theory) gets positive social impacts as a result?

On the union side, the big mistake is to fail to see that genuine social enterprises*, working productively in partnership with unions, might be the best option on the table for their members. Even if their starting point is that publicly-delivered services are the preferred option, the Unite line – which apparently fails to draw a significant distinction between successful social enterprises like HCT and corporate outsourcing specialists like SERCO – is counter-productive because it leave no scope for unions and social enterprises to work together to offer an alternative to full scale privatisations (even in instances where these are the only two likely options).

As we enter this period of public sector upheaval, there’s a major need to move beyond ‘unions are dinosaurs’ and ‘social enterprise is privatisation’ to a position where both sides understand each other’s positions better, and accept that – while there will be many instances where the interests of trade unions members and social entrepreneurs won’t be exactly the same – there will be plenty of times where both sides (and the people they serve) will benefit from working together.


*My liberal views on definitions of social enterprises are well-documented but the use of ‘genuine’ in this instance is a reference to the view held by some current government politicians that the term ‘social enterprise’ can be used to refer to conventional businesses operating in the field of public service delivery but with no aspirations to deliver wider social goals beyond contract stipulations.


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9 responses to “Trade unions and the social enterprise movement – (hopefully) things can only get better

  1. Idea: Why don’t trade unions re-structure themselves as social enterprises? That way they’d better understand what it is we’re all trying to do. Indeed, some might already consider themselves social enterprises – if they thought about it a little!


  2. Alisdair Cameron

    the view held by some current government politicians that the term ‘social enterprise’ can be used to refer to conventional businesses operating in the field of public service delivery but with no aspirations to deliver wider social goals beyond contract stipulations.

    And ain’t that the devil of it. I’d say that were it not for that sleight-of-hand by the Govt, there’d be greater common cause between genuine SEs and the unions.Not complete agreement, not by a long chalk, but a greater understanding and more (mutual) respect. Just because the unions overplay the Trojan Horse argument, to the definite detriment of the real SE, doesn’t mean that the Govt isn’t playing silly buggers (also to the detriment of the real SEs).


  3. David, Let me first echo the perceptions of Alisdare above. I wrote to OurNHS at Unison in support describing what had happened locally with the healthcare SET which had been promoted by local Tories I told them:

    “social enterprise should not be deployed to provide primary healthcare on the cheap nor as the vehicle for stealth privatisation and never should it be founded on personal dishonesty.”

    Our conception of a business serving community interest was never intended as a replacement for the social sector. A replacement for the nonprofit approach yes, and agree that some unions might well benefit from becoming social enterprise.

    We’re an NHS supplier with out resource scheduling software. We’ve supplied SERCO with the same. They’d invited my a couple of years back to a meeting with Novartis to take that service further.

    Novartis as a business deserves credit for helping me get much needed diabetic medication to a woman in Siberia 10 years ago. She otherwise would have lost her leg. I understand that what they’re into now is called Corporate Social Innovation, something which appears to go part way toward the social purpose business approach.

    Helping or replacing NHS supply chain contractors could enhance the social contribution of business, whereas replacing primary healthcare probably won’t.

    Our own work overseas focuses on leveraging change that we hope will remove children from institutions and street living which has contributed to epidemic ratss of HIV in Eastern Europe. That presents a threat on the doorstep of all Europe and not doing anything about it potentially adds to the cost of NHS treatment.

    Simply engaging us in their own supply chain without investing our buying into what we do, allows us to continue the social benefit.


  4. Hazel Cameron

    Good piece. Unions and Social Enterprise (and business) may find that they have no option but to re-structure and work closer together, for eventually the alternative might be too catastrophic. People are becoming increasingly vocal on the extreme divisions in society. Tunisia is a good example and we watch in hope that they will be able to pull together for the good of the majority as the alternative is complete chaos…and even the extreme right-wingers don’t want that.


  5. Another excellent post David and yes a more constructive dialogue is needed – one which realises that there is an obvious common ground here which could be win-win. The R2R leaders I know best are both former shop-stewards who see this as their chance to do what they politically see as core to what they have always stood for – the empowerment of front-line staff and their ownership of the firms they work in. The debate is a ‘young’ one – thanks for moving it fwd David.


  6. Would agree largely with Craig’s position: unions could (should?) be promoting social enterprise as a better option to their members than real privatisation…given these reforms are happening now. But that also puts the emphasis on those on the social enterprise side to do a better job of information, awareness and promotion. Many of the union comments come across as ‘fear of the unknown’ rather than a rational rejection of a clearly understood proposition.

    And, as David makes clear, it is imperative that social enterprises embody what they are about (a better way of doing business) in the way they treat and employ staff, as well as through their stated social aims and objectives.


  7. beanbagsandbullsh1t

    Thanks to all for your comments. I think a key problem – which SEL’s Transitions guide does take into account: – is that most public sector workers will be encountering social enterprise from a very different starting point than social entrepreneurs who make an active choice trade job security for professional freedom.

    I agree that ‘fear of the unknown’ is an issue but fear of getting paid less, having a worse pension and being more likely to get fired (in reverse order) is a bigger issue.

    Some social entrepreneurs defintely think, for instance, – as I know Craig does – that part of the cost of getting out of the current economic mess is public sector workers getting less generous pension entitlements working for social enterprises.

    That’s a legitimate view to hold but it’s fair enough for unions to put an alternative view. I just think they might want to put it a bit more constructively.


  8. I don’t doubt the good intentions of social enterpreneurs. But it’s pretty obvious what kind of businesses are going to gain from further “public service reform” – those geared towards maximising profits for their owners.

    Social enterprise has nowhere near the economic or lobbying power of anti-social enterprise. Firms geared towards profit-maximisation will find it easier to access new markets than small groups of social entrepreneurs – easier to access loan- and equity-finance.

    For the coalition, social enterprise is, like “the big society”, a way of presenting cuts to wages, pensions, jobs and services, in non-threatening language. Social entrepreneurs should not blame unions for defending their members interests – it is, after all, their purpose.


  9. Pingback: Social enterprise and social entrepreneurship links from January 2011 | Philanthropy

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