That’s Urban Forum* chief executive, Toby Blume’s tough verdict on (some) social enterprises. Aside from being Third Sector‘s quote of the week, Toby expounds this view at greater length in an engaging blog post. As Toby acknowledges, charities and conventional businesses are not all perfect either – I could come up with very long list of charities who don’t even fit my definition of ‘charitable’ in theory, let alone in practice.
Toby’s blog is primarily a distillation of points that pragmatic social entrepreneurs and many others in the (wider) voluntary sector have been making for a long time but it’s a set of arguments that is becoming more important as the government-sponsored bandwagon that social enterprise leaders first jumped aboard under New Labour is now careering towards the world of mainstream public service deliver at a ferocious pace. As Toby explains:
“The government (and for that matter the last lot too) seems to see social enterprise as the answer to public service reform, funding for the not for profit sector and pretty much everything else. And it’s easy to see the attraction – save money and be seen to be supporting good causes (and I mentioned saving money, right?). Social enterprises, for their part, are generally happy to keep quiet, pick up the cheques and concentrate on doing the things they want to do…and who can blame them?”
Without getting into a debate about Toby’s personal experiences of existing social enterprise public service delivery – he doesn’t mention whether he’s raised his concerns about his local provider’s customer service and management approaches through that organisation’s complaints procedures, and I’m sure the organisation in question believe that their services are of a high standard – the point is that there’s no guarantee that a social enterprise will provide better public services. And, of course, that the government is hoping that they’ll be able to provide services cheaper.
Aside from the important debate over whether and how social enterprises are able to provide public services cheaper, I think that the social enterprise movement currently has some work to do to meet the challenge of explaining what we mean by socially enterprising public services. As Toby points out, an asset lock may be desirable in an organisation delivering public services but it’s not, in itself, a benefit to people who use their services. The council has an asset lock. Focusing too heavily on social enterprise structures risks a descent into the political argument that social enterprise is ‘not as bad as privatisation’ when what (hopefully) matters most is to explain why social enterprise public services are actively good, based on people’s experiences of using those services.
Beyond public services, though, Toby’s other key point is that social enterprise is a relatively small part of the economy – both in terms of the voluntary sector and conventional business – and that a focus on social enterprise risks distracting us from the issue of making the economy as whole work better for everyone within our society:
“If anything like as much political and financial backing were put into making private sector businesses more social as goes in to supporting social enterprise we could achieve real transformative positive social and economic change.”
This point was made, from a slightly different angle, by the Social Enterprise Coalition (SEC) in their recent paper, Time for Social Enterprise.
“Like many others before them, this Government is in danger of tackling social policy and economic policy in isolation from one another. A number of recent government initiatives have been introduced with the intention of rebalancing the economy and promoting economic growth… Their success is measured in terms of jobs and GDP. Tangential to these are policies designed to engage communities and civil society and realise the Big Society vision. Policies such as the right to buy and right to challenge in the Localism Bill, citizen action initiatives and the mutualisation of public services. But the world doesn’t work in this segmented way and a change in the business environment is needed to ensure the opportunity for change is embedded and the UK becomes truly fertile to social change and innovation.”
Included amongst the recommendations at the end of Time for Social Enterprise are:
” – Charities, social enterprises, research institutions and Government work towards a standardisation of how we measure social value and how businesses are expected to report it.
– The social enterprise movement, consumer organizations and Government work together to produce a business and consumer education strategy to ensure that the workforce and consumers can choose social value when they spend, save, earn and give.”
These recommendations are very sensible ones although the key partners apparently missing from these suggested bits of work – if (at a pinch) we accept that customers are represented by consumer organisations – is businesses themselves. Surely people who run businesses (and work for them) should be at the heart of discussions about the social role of business. This is not an argument in favour of embarrassing, tokenistic sackcloth-wearing exercises such as Project Merlin. It’s about working out how we’re going to feed ourselves, keeping ourselves warm and live the most fulfilling lives we can in the years to come, while enabling everyone in our society to have the opportunity to do so.
Rightly or wrongly, most of the businesses that currently provide the most important (material) things or services for most people are not social enterprises. I, as a social entrepreneur who produces some pretty good magazines, websites and training, don’t really feel that the nation would benefit greatly from me telling lots of people who do know what they’re doing – in terms of building houses, selling groceries or organising package tours to Spain – my clever ideas about why they’re doing it completely wrong.
The danger for the social enterprise movement is that it ends up trying to choose between being fawningly deferential to a few rich business-people or incongruously patronising towards the 98%+ of people who work in the UK economy but don’t work for social enterprises. Many social enterprises have great stories to tell, some of which are relevant to conventional businesses. We also have the ability to play a bigger active role in the economy but delivering a more social economy is a massive task for government, business, civil society (including trade unions) and individual citizens. I think we’re an important part of it but we’re only part of it. Realising that is a key factor in the social enterprise movement establishing greater credibility and starting to make a bigger social impact.
*I am a trustee of Urban Forum but the views expressed here are my personal views.