Surplus requirements

I spent part of last Friday (5th) at Outsourcing and Austerity: Civil Society and the Coalition Government, a conference held at TUC headquarters and supported by the unions, Unite and Unison, and the voluntary sector umbrella groups, NAVCA and NCIA.

Given the title of the conference and the organisations supporting it, it was pleasantly surprising that the breakout discussion entitled ‘What is social enterprise?’ – sensibly revised on the day to ‘Social Enterprise: friend or foe’ – wasn’t full of people making variations on the point that ‘social enterprise is government’s cuddly name for privatisation’.

Of course, there were plenty of people there who did think that. The invited speaker in the ‘no to privatisation’ corner was James Beecher of Stroud Against the Cuts, the organisation that famously foiled attempts by their local NHS trust to transfer services into a new social enterprise. He outlined a series of objections to NHS spin-outs including (amongst others):

  • staff don’t support spin-outs
  • outsourcing shifts responsibility from politicians to providers
  • outsourcing to social enterprises leads to outsourcing to private companies – as EU law prevents commissioning process that ensure contracts go to social enterprises
  • it’s inconceivable that social enterprises could win contracts against large private providers – citing the example of Central Surrey Health
  • a quote from Craig Dearden-Phillips saying: “In order to open the NHS drawbridge, we must also permit the likes of SERCO to mount the ramparts”

The invited speaker on the pro-social enterprise side was Lucy Findlay from the Social Enterprise Mark company. Provided the discussion isn’t actually about the Social Enterprise Mark, I tend to agree with most of what Lucy has to say about social enterprise and her contribution focused the dangers of the social enterprise movement taking an uncritical view of government agendas around outsourcing – but also on the roots of the social enterprise movement in self-help and independent community action.

Lucy also rightly suggested that while social enterprises needed to be less reliant on the state (as a customer), people with a commitment to social value needed to see beyond the idea that public sector provision was good and everything else was bad.

Many of the other contributions were from people running charities or other community organisations who were thinking about whether and how to use socially enterprising approaches as a response to the challenge of keeping going in times of austerity. While many were suspicious of the government’s agenda for social enterprise, that was often combined with a pragmatic focus on finding ways to get things done.

One lady from a small local charity said she was worried that turning her organisation into a social enterprise might amount to selling out but that she already felt she was selling out by delivering whatever the council asked for in order to grant.

Someone who was a director of workers co-op pointed out that while people might disagree over whether a social enterprise provided social benefit, that was equally true of charities.

Michael Buick from Ethex questioned whether the model where the government taxes us and puts the money in a big pot to be spent is not the only model for social spending – and also made the point that many profit-making businesses also deliver social good.

There was a short discussion on the issue of profit vs. surplus for charities and social enterprises. Several of the more social enterprise friendly people in the room pointed out that all organisations – charity, social enterprise or informal group – needed to generate at least slightly more income than they spent or they would go out of business.

The response from several of those less keen on social enterprise was that ‘surplus’ was a better description than ‘profit’ for a social organisation making more money than it spends.

When it comes to figures in the annual accounts at the end of the year, this seems to be an argument primarily about whether or not people feel comfortable about seeing their organisation as a business – but I think there’s also some more complicated questions in there about whether particular products and services are profitable.

Summing up, a representative from NCIA seemed to focus more heavily on the negative perceptions of social enterprise than most of the contributors to the discussion. She asked ‘what is going on with the phrase?’ and described social enterprise as a cover for the fact that the UK has not had a conversation about common wealth and private wealth.

She also added, in response to the question from someone considering whether or not to call themselves a social enterprise that: “If I called myself a social enterprise, I’d wash my mouth out with soap.”

It’s clear that, in these challenging times for the economy, and the public and voluntary sectors, there’s potential for social enterprise and social enterprises to be cast as the bad guys. But it’s equally clear that the same factors will lead many people in the voluntary sector to explore socially enterprising approaches.





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3 responses to “Surplus requirements

  1. I could be unique in running a social enterprise, being a protestor against the cuts and also a patient in Gloucestershire where my life now depends on a drug provided by the NHS, I just wouldn’t be able to afford on a social enterprise income.
    It was interesting to read how much being said at that meeting , had been said before. Those of us who’ve acted with integrity are unfortunately tarred with the same brush.

    I can’t disagree with the need for social enterprise to be less dependent on government funding. We after all introduced the concept of self-sustaining business for social purpose,

    Moving operations to Gloucershire in 2005, we sought out local social enterprise support. It wasn’t easy to find, or communicate with when found nor willing to offer any support.

    Still. the infuence of what I introduced to them seems to have created an impact, if only in rhetoric. :


  2. There’s an article in todays Guardian social enterprise hub making the case for charity to become social enterprise. The same reasoning made in our 1996 paper which was published online. Radical, I know, but the intention was to share.
    In an associated leaflet ‘Why social enterprise’ there is much said about the use of profit for social aims which derives from our copyright project plans prior to social enterprise becoming government policy and any DTI definition.
    It was in 2006 that the SEC told me that our work was outside their current focus and now is would appear to be taking ownership of it. It begs the question as to why we’re not attributed?.
    Quoting MLK, I wrote today about “keeping silent about things that matter” and of those who assist in maintaining that silence, whether it be by means of defamation or simply censoring those whose work offers the means of building reputation.


  3. “Lucy also rightly suggested that while social enterprises needed to be less reliant on the state (as a customer)” – is that Lucy Findlay, former leader of RISE-South West social enterprise support co-op who supported its dissolution/demutualisation as soon as the state ceased giving it money? Who now leads the divisive, private-trust-owned Social Enterprise Mark created by using hundreds of thousands of pounds of state money that should have been used to support all social enterprises in the South West? Who has not yet – as far as I know – started a trading-funded social enterprise?

    Why do you feel trade unions and voluntary sector umbrella groups keep listening to the likes of SEMCo, rather than real live social entrepreneurs? (I have my theories, but I could be way off.)

    Given who they’re seeing, I don’t think it’s any wonder that the NAVCA rep has such a bad impression of us. They need to get out more…


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