Opening up to what?

Last Monday was, as Social Enterprise Coalition, chief executive, Peter Holbrook points out, a good day for the government to bury bad news. Not that David Cameron believes the Open Public Services white paper represents bad news – it’s a key part of the government’s overall agenda – but, whatever the intentions, there’s a clear danger that the blueprint for modernised public services will end up being bad news for social enterprise.

That’s despite the fact that five principles guiding public service reform – paraphrased here by my colleague, Mark Brown, are:

  • Providing more choice
  • Shifting power from the centre
  • Ensuring diversity
  • Guaranteeing fair access
  • Delivering accountability

Clearly these are principles that many in the social enterprise movement support. And, in theory, the government is very much in favour of more social enterprises delivering services in these newly opened markets for public services. The problem is creating a situation where that aspiration is actually likely to become a reality.

The only large scale roll out of a significant new approach to public service delivery so far has the been the Department of Work & Pensions’ (DWP) Work Programme. That commissioning process didn’t work out too well for social enterprises but, equally importantly, while the Prime Minister cites the programme as an application of the principle that ‘Public services should be accountable to users and to taxpayers’ it’s difficult to see how this new programme is more accountable to the unemployed people who use back to work services.

The contracting process for the Work Programme and the ‘payment by results’ system seems to be an example of the government discharging its responsibilities to large private sector providers at the lowest possible cost while creating the conditions for those providers to under-prioritise the needs of the most vulnerable service users.

The Work Programme example illustrates that whatever its principles (and there no reason to doubt that these principles are deeply held) the over-arching practical driver of policy since the coalition came to power has been the search for short term cost savings. Even in times of plenty it is the government’s responsibility to act in a way that ensures good value for money for all of us as taxpayers. We aren’t in times of plenty and some short term savings are clearly necessary but there is big potential for conflict between an approach to Open Public Services that prioritises makes public services as cheap as possible in the short term and an approach designed to deliver a vibrant and diverse marketplace where a wide range of providers can offer services that deliver positive long term change (and financial sustainability).

The danger is that the practical outcomes of the Prime Minister’s laudable aims will be that large private companies will get to hoover up lucrative public service contracts while less lucrative work gets ‘decentralised to the lowest appropriate level’ for armies of volunteers will to deliver it for free.

So far, the results of the much touted drive for public service mutualisation amount to a situation where  “20 groups of public sector employees have opted to create their own new public service ventures.” and, as yet, there have been no practical measures taken to make it easier for existing successful social enterprises to deliver more public services. As Peter Holbrook points out, the reality is that social enterprises trading with public sector are preparing to cut staff rather than take them on.

I’m not one of those who believe that social enterprises, simply by virtue of being social enterprises, deliver public services in a way that maximises positive social outcomes but I believe that the best ones do. I also believe that the approach of the best social enterprises, delivering local services responding to the needs and drawing on the experiences of people who use them, is the right approach to delivering services – whether the organisation doing that delivery is public, private, charity or social enterprise. If the government agrees then just saying so isn’t enough. What are they going to do to make it happen?



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4 responses to “Opening up to what?

  1. In theory David, this and the Localism Bill would appear to be government moving in the direction many of us would like to see. As ourselves an advocacy for placing people at the centre of economic development, it almost seems that they’re holding up their hands and saying ‘ok, we’ll do it your way’

    On the other hand, I already know what it’s like working in the government supply chain, since this is where we’ve been pioneers in the UK. I know I’ve had to do with all kinds of typical supplier problems, late payment, failure to supply purchase orders that plague many small organsations in the government supply chain that have often caused them to go out of business. This can and will happen.

    Even worse, as we discovered where there are large outsourcing organisations who won’t tolerate others in the same space, it can produce difficulties. We experienced such a problem with DCMS when a major contractor demanded free services from us, the refusal of which led to being removed from our contract without notification with the claim of non-response.

    I took up the issue with my MP fowarding the correspondence and from DCMS got a response with the key response edited out. At the time we were SEC members but neither they or any other SE support agencies were willing to demonstrate solidarity.

    First they came for the social entrepreneurs, perhaps?.


  2. Opening up to what?

    Opening up to new sources of profitable investment for surplus capital. This isn’t about improving public services – it’s the government’s growth strategy….


  3. admin

    Well, I don’t think it’s a bad thing in principle for the government to want private companies to be successful and to deliver good value public services in being so.

    The question (or at least, a question) is whether creating the conditions for particular types of companies to succeed – and to deliver a particular kind of service fairly efficiently – helps or hinders the other stated goals of providing diverse public services that are responsive to people’s needs.


    • One important reason for having public services and utilities provided directly – or through mutuals or voluntary organisations not aimed at maximising financial returns – is that it is a way of ensuring that services do not become a means of subsidising dividends.

      Whatever the stated aims and sincerely held beliefs, the Work Programme indicates that social enterprises, charities and other purpose-driven enterprises and organisations aren’t going to be able to compete as well as large and experienced for-profit firms in winning contracts in the new “open public services” environment.


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