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UK government policy on social enterprise and public procurement

UK government policy on social enterprise and public procurement. Jonathan Bland. UK definition of social enterprise.

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UK government policy on social enterprise and public procurement

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  1. UK government policy on social enterprise and public procurement Jonathan Bland

  2. UK definition of social enterprise A business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners • http://www.flags.net/images/largeflags/UNKG1027.GIF

  3. Social Enterprises in the UK 62,000 businesses, £24B, 800,000 employees

  4. Characteristics • Clearly defined social purpose • Trading in the market • Limited profit distribution • Ownership structures • Transparency • Triple bottom line

  5. UK has a broad approach Many Legal forms: • Companies • Community interest Company • Community Benefit Societies • Co-operatives • Charities (tax status)

  6. A successful business model Different routes to social enterprise: • NGO’s doing business • Public sector externalisations • New start value driven businesses • Private business conversions

  7. UK Government Policy framework - a decade of development • Productivity and competiveness • Socially inclusive wealth creation • Regeneration of local neighbourhoods • New ways to deliver public services • Inclusive society A series of UK Government policies have been developed since 1999

  8. UK Government policies and procurement • Main focus has been around public service reforms • Some local public authorities have used procurement for wider objectives e.g. employment

  9. SE in public service markets • Split between provider and commissioner • Developing markets • Social enterprises as new providers • Changing role of NGOS and new social enterprises

  10. Support measures for health and care SE’s • Commissioning frameworks • Third sector policies, Future builders • Social Enterprise Unit • £100m Social Enterprise Investment Fund (SEIF) • Right to Request (R2R) programme

  11. Social enterprises delivering social care • Social enterprises operate across a wide ranges of types of care: domiciliary, residential, special needs • 50% of all funding to voluntary sector by local government is for social services • In social services Voluntary and Community Sector organisations get 88% of income in contracts or fees • 1 in 10 community interest companies deliver social care • 2007/8 local authorities spent £20.7b on care (12b in market of private and third sector providers) • Growth in third sector care workforce from 202 000 in 1996 to to 374 000 in 2008 (614 000 in private sector, 424 000 in public bodies)

  12. Department of Health “Right To Request” programme in primary health care • Staff, who transfer, keep • NHS pension • Support: advice and funding • Uncontested contract for up to 5 years • Large organisations of 3000 staff to a group of 5 nurses

  13. The Current Coalition Government • Commitment to social enterprise in public service delivery • Deficit – much less money • Smaller role for the state • Big Society Agenda

  14. Current Government policies • Greater role for co-ops, mutuals charities and social enterprises • Public sector workers given the right to form employee led co-operatives to bid to run services (Right to provide) • Big Society Capital – money from dormant bank accounts • Communities “right to challenge” to state run services (Localism Bill)

  15. Community Benefit clauses • Use in public procurements to achieve wider objectives - not wide spread but staring to grow • Most developed in Scotland, being actively promoted by Scottish Government. • Pilot has been carried: construction and social care • Focus on integration into labour market of disadvantaged groups

  16. Public Services (Social Enterprise and Social Value) Bill 2010-11 - • •places a duty on the Secretary of State to publish a 'national social enterprise strategy' to encourage engagement in social enterprise. • • amends Section 4 of the Local Government Act 2000 so that local authorities are required to include in their sustainable community strategy proposals for promoting engagement with social enterprise in their area. • •They must also include a statement of the measures suggested to enable social enterprise to participate in implementing these proposals requires local authorities, when entering into public procurement contracts, to give greater consideration to economic, social or environmental wellbeing during the pre-procurement stage. • It is a private members bill with support from the government – it may get watered down

  17. Rhetoric and reality – challenges & issues • European Laws on Procurement and state aid • It really depends on how markets develop – requires market management by public commissioners • But ….. tendency to bundle contracts, focus on a few large providers and on lowest price • Perception of risk, transfer of risk • Implications of payments by results • Social enterprise capacity for growth • Access to Finance

  18. Thank You! • +44 203 372 2878 • +358 400 - 430730 • Jonathan.bland@socialbusinessint.com • www.socialbusinessint.com

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