Big beasts versus social enterprises in health

The King’s Fund had a very interesting report out last week: Social Enterprise in Health Care.

Focusing on the health sector, the report explores the reasons why some social enterprises became social enterprises in the first place, and whether what they were hoping to achieve has happened in practice.

I think this is of interest because Disabled People’s User-Led Organisations operate in the same “space” as social enterprises.

Beyond the specifics of the challenges facing establishing social enterprises, there is a wider context. As the report’s author, Rachel Addicott, highlights in her summary post on the report, there is something of a paradox at the heart of the health reforms when it comes to social enterprises.

On the one hand, there is a desire for the NHS to become the largest social enterprise sector in the world.

On the other, there is the “any qualified provider” drive towards greater competition. Thus:

The question is whether these emergent organisations can really compete with the likes of private companies and large voluntary sector providers.

Of course, the issues that face emerging social enterprises are similar to those that face smaller voluntary sector providers, including disabled people’s user-led organisations – a virtually unheard of provider in the health sector.

But even here there is something of a hierarchy. As Addicott notes:

Many social enterprises have emerged from primary care trust (PCT) provider arms – some taking the entire provider service with them, and others breaking away into smaller enterprises that deliver distinct types of care.

As such, even these spin-out social enterprises have a head-start over smaller voluntary sector organisations, since they’ll have the contacts and the familiarity with health commissioning – issues of process – to compete when bidding for contracts – an issue of content.

The King’s Fund rightly, in my view, calls for creating conditions in which social enterprises can grow and flourish, and so contribute to a

future market containing a plurality of differently-sized, locally-based social enterprises growing and competing.

Creating such conditions would also have a beneficial impact on DPULOs, too.

The King’s Fund suggests that such conditions can be crated through both political commitment to a practical support programme and a commissioning strategy to nurture the development of the social enterprise model.

Such practical support was made available under the previous Right to Request programme (on which more here), and covered areas such as HR, finance, governance structures. It also made mentors widely available for other organisations – mentors being organisations already successfully operating as social enterprises and providers in the health sector.

Having something similar to the support programme for the Right to Request for emerging social enterprises in the current health reforms would be of great use. Making this support available for smaller voluntary sector providers as well would be a generous, and beneficial, extension of the support.

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The Right to Request, third party organisations and adding value

I’ve read the summary of NAO’s interesting report about the Right to Request programme, which supports NHS staff to apply to form a social enterprise to supply services under contract to PCTs.

There are a number of interesting points highlighted in the report, which I note (in no particular order or logic) below:

• Employee-owned social enterprises have been spun out to provide services to PCTs since 2008, i.e. prior to the Coalition Government coming to power (para 1).
• Government policy is to “support social enterprises and mutuals spinning out from parts of the public sector” (para 4). This is presumably about much more than the government encouraging the setting up of social enterprises and mutuals as a means to an end, which means that government recognises the added value that such organisations can and do add to the health economy.
• One of the first benefits identified by employee-led social enterprises is of reduced staff absence rates (para 7). I don’t know why, but this always seems to be one of the first measures of success identified by such organisations.
• The Right to Request programme has worked well through having a centrally-run support unit within DH, and that the objectives of the RtR programme are aligned with the wider objectives of the DH (para 9).

By far the most interesting point is raised in paragraph 10:

PCTs approved proposals for spinning out social enterprises where enterprises promised more benefits than the alternatives but did not generally contract for them to deliver these additional benefits.

For me this is part of a wider point relating more generally to third party delivery of services. If, as public bodies and third party organisations (be they private, voluntary or social enterprise sector) wish and claim, third party organisations deliver added value beyond that provided by a “traditional” service, then that added value must be articulated, contracted for, captured and assessed.

I absolutely think it is the case third parties add value; they must continue to drive themselves to demonstrate – both qualitatively and quantitatively – this added value they provide.

In its report, the NAO has taken the view that PCTs and government needs to demonstrate this value; though I agree to an extent, I’d take the view that PCTs and government need to create the space in which third party organisations can demonstrate the added value they create.