Social entrepreneurs – inside or out?

“We need to break away from a view of public services that focuses on the efficient and effective distribution of state resources and instead focus on the opportunities to improve people’s lives, wherever these opportunities exist and whoever is best placed to take advantage of them.”

These are the thoughts of Andrew Adonis, sometime Secretary of State for Transport but better known for his role as a leading adviser to Tony Blair during New Labour’s golden age, in the current edition of Ethos, a journal published by outsourced public service provider, Serco.

Adonis’s point is that currently public service delivery is based on public sector bodies getting an allocation of money and spending it providing as many blocks of useful public service as possible within the budget rather than starting from the point of having some desired outcomes then trying to find ways to achieve them.

Assuming that Adonis supported the previous government’s approach to public spending, this is an interesting shift in thinking. While New Labour was keen on increasing the role of non-state providers in some parts of the public sector, it was also equally keen on setting national output targets which meant that local public sector agencies often didn’t even get to make their own decisions on what efficient and effective distribution of state resources might be, let alone have the choice to engage in imaginative problem-solving approaches to services delivery.

Now, though, in the era of big cuts and Big Society, Adonis is clear that:

Whitehall can never know enough to manage every last detail and so should restrict its activities to those functions that require national-level decisions, co-ordination or facilitation. After that, it has to be for public sector leaders and managers, in close conjunction with local communities, to steer the most appropriate course.

Aside from the belief that spending should local leaders and managers should be in control. Adonis is clear that neither cost cuts or service cuts are the answer. The view is reinforced, in this article on LocalGov.co.uk from another former New Labour, Charles Leadbeater, is that we have arrived at a point where just doing public services cheaper and/or more efficiently – whether the provider is the public sector, the private sector, the voluntary sector or a social enterprise – is not going to be enough to meet the demands we face with the resources we have available.

In terms of what should be done, Adonis cites Homeshare as an example of an entrepreneurial approach to public service delivery. The basic idea of Homeshare is to match person A who needs some support to continue living in their own home, with person B who can provide that support and needs somewhere affordable to live. The service matches up people in the community with complementary resources and need, an alternative to the more expensive option of ongoing state-funded care to enable person A to remain at home living alone.

Interestingly, though Adonis doesn’t mention this, Homeshare is a way of doing things rather than an organisation. There is a charity called Homeshare International – and some local services are delivered by the voluntary sector – but there are also local Homeshare services delivered by council employees. The entrepreneurship is in the approach, it doesn’t necessarily depend on council employees setting up a social enterprise.

This is an idea that may be challenging to those in the social enterprise movement who are focused on as many services as possible being delivered by organisations called social enterprises. Equally challenging, though, is Adonis’s assessment of the big choices facing the public sector in the near future:

“The biggest risk over the next few years is that, as the public sector cuts bite, our public services will hunker down, retreating to their core mission and becoming more introspective. For example, local councils will focus on the statutory services they must, by law, provide, reducing support for exactly the kind of organisations that can help marshal resources from outside their immediate influence. Instead of greater introspection we should be looking far beyond traditional boundaries for opportunities to improve services.”

A major way that public sector employees can seek out entrepreneurial answers to local demand is by engaging more effectively with small organisations in local communities. In one of the sectors we work in, mental health, that means finding ways to support organisations that provide non-medical activities that make people’s lives more fulfilling and, in doing so, reduce their need to make use of mental health services. The danger in mental health, as Adonis outlines, is that the NHS will focus all its resources on delivering as much medical service provision as possible with its reduced resources but, in doing so, fail to protect the support structures in the community that help to reduce the demand on those services.

Ultimately, we are social entrepreneurs should be in the business of delivering the best social outcomes for everyone in our communities. There’s nothing wrong with spinning out public services into social enterprises – or public service delivery being contracted out to existing social enterprises – but it’s at least equally important that the large percentage of those delivering public services who remain in the public sector are enabled to be more socially entrepreneurial in the way they work.

As Andrew Adonis makes clear, it will need ‘a great exertion of the state’ to make that happen but social entrepreneurs are well placed to work with partners in the public sector to help the process along – and hopefully keep it focused on the social outcomes rather than the cost-cutting.

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One response to “Social entrepreneurs – inside or out?

  1. David, Interesting to read the reference to Harvard in the Adonis article. Things have changed, radically with the new tack of ‘Creating Shared Value’. As it states in Harvard Business Review:

    “The purpose of the corporation must be redefined as creating shared value, not just profit per se. This will drive the next wave of innovation and productivity growth in the global economy. It will also reshape capitalism and its relationship to society. Perhaps most important of all, learning how to create shared value is our best chance to legitimize business again.”

    A similar call will be found in Caritas in Varitate, the 2009 Papal encyclical:

    ‘This is not merely a matter of a “third sector”, but of a broad new composite reality embracing the private and public spheres, one which does not exclude profit, but instead considers it a means for achieving human and social ends. Whether such companies distribute dividends or not, whether their juridical structure corresponds to one or other of the established forms, becomes secondary in relation to their willingness to view profit as a means of achieving the goal of a more humane market and society’

    What Big Society and in this instance Adonis seem to be presenting us with, is that this change in economic thinking comes from them, in the context of public service delivery. This is the Big Deception

    Here’s Philip Blond quoted in a recent interview about his invention:

    “There’s nothing wrong with profit: it’s a way to reward those who work hard. That which we need to fight against is capitalism, where the value of objects prevails over the values of man.”

    So now we have the clear impression that we’ve been delivered a top down vision for a new partnership between social enterprise and the state.

    Now consider this, which came bottom up from a social enterprise some years earlier, in a formal and copyright proposal.

    ‘An inherent assumption about capitalism is that profit is defined only in terms of monetary gain. This assumption is virtually unquestioned in most of the world. However, it is not a valid assumption. Business enterprise, capitalism, must be measured in terms of monetary profit. That rule is not arguable. A business enterprise must make monetary profit, or it will merely cease to exist. That is an absolute requirement. But it does not follow that this must necessarily be the final bottom line and the sole aim of the enterprise. How this profit is used is another question. It is commonly assumed that profit will enrich enterprise owners and investors, which in turn gives them incentive to participate financially in the enterprise to start with.

    That, however, is not the only possible outcome for use of profits. Profits can be directly applied to help resolve a broad range of social problems: poverty relief, improving childcare, seeding scientific research for nationwide economic advancement, improving communications infrastructure and accessibility, for examples – the target objectives of this particular project plan. The same financial discipline required of any conventional for-profit business can be applied to projects with the primary aim of improving socioeconomic conditions. Profitability provides money needed to be self-sustaining for the purpose of achieving social and economic objectives such as benefit of a nation’s poorest, neediest people. In which case, the enterprise is a social enterprise. ‘

    This is the fundamental dishonesty of Big Society, that it’s founded on borrowed concepts which have been bastardised for a political objective. When these collide at the local level, we find local government has no intention of engaging with social enterprise. That is what’s happening now to me, as I discover public funding being used to undermine our social enterprise.

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