Social Enterprises and the NHS - Unison

1 Introduction
This government believes that social
enterprises, with their capacity for developing
innovative and flexible solutions, and their
ability to create wealth and employment,
could play an even greater role in future,
particularly in the delivery of public services.
(Patricia Hewitt MP, 2006a)
Social enterprises are an increasingly important feature
of the English public policy landscape. They reflect a
new kind of entrepreneurship, which differs from
traditional not-for-profit and social economy
approaches, and for which new legal frameworks have
already been adopted in a number of European
countries (Defourny 2001). Considered part of the so
called ‘third sector’, social enterprises have their origins
in the co-operative movement which developed in the
19th century, and in mutual aid associations formed for
financial or social purposes, such as friendly societies,
which date back to the 17th century. Elements of this
history are reflected in the ethos of social enterprise and
in arrangements for mutual ownership and control by
members. For example, in her speech on Social
Enterprise and Cooperatives: 21st Century Businesses,
Patricia Hewitt MP, then Secretary of State for Trade and
Industry, commented (Hewitt 2002):
It is clear that social enterprises share the 7th cooperative
principle of concern for community which,
for me, is at the heart of the social enterprise sector.
An upsurge in the numbers of social firms and
businesses, mutual social care models, and communityowned
ventures dates from the 1970s. This growth in
third sector activities is attributed to failures of the state
and the market in a context of rising unemployment and
increased demands on the welfare state (Amin,
Cameron and Hudson, 2002). Social enterprises are
often found in the areas of employment, housing,
finance and welfare services. However, the potential of
social enterprises for treading a ‘third way’ between
private and state provision, allegedly combining the
innovation, entrepreneurship and flexibility associated
with the former with the public ethos and public interest
of the latter, is associated with New Labour and ‘third
way’ thinking. In a Fabian Society pamphlet, Tony Blair
(1998) described the ‘third way’ as ‘a serious
reappraisal of social democracy, reaching deep into the
values of the Left to develop radically new approaches’.
Although the term lacked clarity and soon fell out of
favour, policies associated with the ‘third way’ have
included repositioning the state as a guarantor, but not
necessarily as a provider, of public services, and
emphasising mutualism, active governance and
accountability (Halpern and Mikosz 1998).
6
The notion of a ‘new mutualism’, that is, developing a
culture which supports mutual responsibility as a third
way between free market and state control, has been
argued as ‘flowing naturally from the kind of values that
Labour has always espoused’ (Kellner 1998). Since
coming to power in 1997, the Labour government has
supported the development of mutuals, putting them on
a more equal footing with other companies and
updating cooperative legislation (see, for example, Ed
Balls', address to the BSA, November 2006).
Government interest in promoting ‘social enterprises’ is
relatively recent. It was first evident in the debates over
regeneration (see, for example, Enterprise and Social
Exclusion (National Strategy for Neighbourhood Renewal
1999) and has been reflected through many different
kinds of support, including increased funding (via
Regional Development Agencies), regional networks,
business advice, social enterprise ‘ambassadors’ and
educational initiatives. In his foreword to the Social
Enterprise Action Plan (Office of the Third Sector 2006),
Ed Miliband MP, Minister for the Third Sector, claims
that social enterprises challenge both private and public
sectors.
To the private sector, the challenge is to put ethical
values at the heart of their business and be a
responsible member of the community. To the public
sector, the challenge is to deliver public services in a
different way, using the skills and expertise of users and
front line workers.
There is support across both Labour and Conservative
parties for the development of this agenda, with
important overlaps between the government’s promotion
of social enterprise and the social responsibility agenda
of the Conservatives, described by David Cameron MP
as ‘the Big Idea for Britain’s Future’, and expected to
form the basis of the Tory manifesto.
As part of a wider policy for encouraging a mixed
economy in providing public services, social enterprises
are now set to play a part in providing mainstream NHS
services. To some extent, this parallels the shift towards
the contracting out of home-based services by local
authorities, following the Health Services and
Community Care Act (1993) and the contracting out
of NHS services such as cleaning, criticised on the
grounds of fostering fragmentation and contributing to
rising hospital-acquired infection rates (Davies 2005).
It is, however, an important shift in direction, and one
which is consistent with government intentions to
reduce the role of the NHS in directly providing services.
For example, the Fitness-for-Purpose Test for PCTs
(DH 2006) suggests that retaining in-house services has
to be justified rather than assumed, with the result that
many consider that the status quo is no longer an
option for providers of community services.