Tag Archives: comprehensive spending review

Social enterprise in the council contracts ‘market’

Amongst the deluge of (often anguished) reaction to last week’s Comprehensive Spending Review have been some interesting points from leading figures in the social enterprise world. For example, in June, Social Enterprise Coalition chief executive, Peter Holbrook, was sure that our time had come. Four months on, this view has now been significantly revised to something along the lines of ‘our time would’ve come, if only the people who might pay us to do stuff had the foggiest idea about who we are and what we do’.

Holbrook’s concern is that, charged with shaving millions from the cost of delivering public services, councils will act quickly to dish out contracts to established private sector providers rather than exploring social enterprise options that will ultimately offer a better overall impact.

Referring to local government commissioners, Holbrook told Social Enterprise magazine that: “Many don’t know about the social enterprise movement and could miss opportunities to commission better services or enable public sector staff to create social enterprises, and there is evidence that this is already happening,” and added that “Social enterprise must not lose out to the private sector simply because commissioners already know that private sector providers exist locally. The danger will be that social enterprises will not be considered or invited to tender, even though they are experienced and good at making savings while protecting the quality of services.

Ok, fair enough. But then he calls on the government to step in: “Before local authorities make further cuts to services to satisfy the 7.1 per cent annual chop in their budgets, central government must take steps to remove the barriers that prevent social enterprise delivering services, otherwise they risk being pushed out of the market, which would be a disaster at this point.

While I’m not known for my sympathy towards the lobby, I don’t think this is a wholly mistaken intervention. Holbrook is absolutely right to suggest that conventional approaches to austerity outsourcing don’t favour social enterprises (most of whom are fairly small). The question is what, if anything, government can or should do about the situation he describes.

My instinctive reaction, as someone who runs a social enterprise, is that if my social enterprise is capable of delivering a service but the people who might commission me to deliver that service have never heard of me, that’s primarily my fault. Maybe my company has been so busy fulfilling existing contracts or funding agreements that we haven’t had time to spread the word about who we are and what we do but, if that’s the case, that’s hardly an argument in favour of our ability to be able to take on additional business if it becomes available.

There are lots of barriers that make it hard to move from being a tiny company to a fairly small one and from a fairly small company to a medium-sized one – including being able to allot enough staff time to putting in tenders for the contracts you have been lucky enough to find out about – but is it possible (or right) for the government to intervene to make that process easier for social enterprises that it is for other hard-working business people.

What are the barriers that fundamentally affect social enterprises while not affecting other businesses of a similar size? And, if social enterprises are businesses competing in a market – albeit, I highly politicised one – on what basis can we demand that the market is distorted/modified (delete according to preference) in our favour? I have ideas but no fixed position on either of these questions. Interested to hear what others think.

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The first cuts are the deepest

CSR is a tainted acronym. Until recently, it’s tended to mean Corporate Social Responsibility – (with honorable exceptions which I hope we’ll see more of) the process through which massive corporations divest themselves of moral responsibility for the social impact of 99.5% of their activities by building a branded basketball court (for example) on a deprived estate.

Now CSR also means Comprehensive Spending Review. Yesterday’s was not the first Comprehensive Spending Review conducted by a UK government but it’s made an impact on the public consciousness because the decisions taken mean hundreds of thousands of people are getting fired, while millions are losing benefits and millions more will soon be receiving worse public services.

So far, the public reactions from some of the people I like and respect in the world of social enterprise have been either pragmatic or relatively positive. I don’t think my social enterprise friends are wrong – Rob Greenland’s line on this is more or less the same as mine – but there are some challenges about how we express our feelings about what’s going to happen as a result of massive cuts in public spending.

The grim reality of the experience for many people in public sector jobs is they’re currently wondering whether they’re going to have a job in a few weeks time, and how they’re going to pay the bills at the end of the month. In the social enterprise world we call that experience ‘Thursday’. Or ‘Monday’, ‘Tuesday’, ‘Wednesday’, ‘Friday’, ‘Saturday’ or ‘Sunday’ (when many of us are often still at the office).

The difference for public sector workers (and their families) is that they never signed up for a ride on this rollercoaster of risk. Many of those ‘back office’ and ‘admin’ people whose desks are located too far from the door for them to be considered ‘frontline’ service providers have made the choice to spend large parts of their lives enduring all the challenges of working within large, bureaucratic structures, in exchange for job security and a decent pension. Irrespective of who we reckon is responsible for this situation, it’s a nightmare for those who will lose their jobs.  And while the cuts will provide opportunities for some social enterprises, they’ll also bury others.

Like Rob, my aim is for Social Spider is that we can work with others – other social enterprises, charities, the public sector, former public sector employees, private sector businesses – to preserve the best of what we’ve got and develop new work to help hold society together, increasing support and opportunities for those that currently don’t get enough of either. Getting on with it is our job and it’s a job worth doing but these are not times for celebration.

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