On Saturday mornings I take my children swimming. We go to a large sports centre that used to be run by the council. These days it’s run by a social enterprise, though unless you’re ‘in the know’ about these sorts of things you’d be unlikely to notice. The social enterprise was spun off by a local authority some years ago – this is, according to the government’s Big Society vision, the future of public services.
The staff at the centre are pleasant (mostly), the teachers are as excellent as they always were, the management is, well, rubbish (not to put too fine a point on it) and the customer service is poor. And that’s important – and more than me just venting my spleen about shoddy service – because we mustn’t kid ourselves into believing that social enterprises offer any guarantee of better services for people as we merrily go about spinning off public sector services into workers cooperatives and not for profit organisations. The end result, from a citizen’s perspective, may not improve; in fact it could even get worse. Like the public and private sector, the not for profit sector varies….some are good, some not so good (and it’s not a given that the best quality offering is always the most successful…remember Betamax?).
okay, so I realise this is a gratuitous use of a pic of some cool retro-tech 🙂
That’s not to say that social enterprises don’t have other qualities and benefits – they do. One strength that they have is a community asset lock, which is a fancy way of saying that they serve a social purpose, rather than serving the interests of shareholders. The primacy of the profit motive in private enterprise has some benefits too, but to my mind, a focus on social objectives is a good thing for a public service to have at its heart, but it’s not the same as delivering a better quality service. Of course this raises an important question; do we care more about the quality of public services that are delivered or what the organisation that delivers the service does with the profits?
Of course that rather presupposes that social enterprises are actually generating any profits! There are certainly some social enterprises making money (and a handful of household brands spring to mind) but there are also a huge number who are highly dependent on grants, donations, government funding and philanthropy to sustain themselves. That’s okay – lots of charities are reliant on grants and no one thinks the worse of them for it (except maybe the government with its questionable rhetoric of ‘the sectors’ dependence on the state’). But it is somewhat disingenuous to hide behind the banner of ‘enterprise’ whilst operating in a not-too-dissimilar fashion to the average (and much less ‘sexy’) charity.
Similarly, there are substantial numbers of social enterprises that are not tremendously ‘social’ in their endeavours – benefiting very few people in need or serving their beneficiaries poorly (or tenuously). Again this is not something exclusive to the social enterprise sector…some charities are run as if they were personal fiefdoms rather than agencies afforded the privilege of charitable status in order to serve their beneficiaries’ needs. However, to see the hyperbole surrounding social enterprise you’d be forgiven for believing that social enterprises are universally enterprising and socially driven and this is simply not the case.
Some social enterprises benefit a lot of people but don’t actually make money (at times, if not consistently, this is been the situation for the Big Issue – often, quite rightly, held up as one of the exemplars for the sector). Others do make real money but provide benefit to few people (okay…I am generally prepared to speak my mind, but even I’m not going to get myself into even more hot water by naming the organisation I’m thinking of…so you’ll have to come up with your own examples!). Both of these things are okay. In fact they’re very good when compared with some of the alternatives. But the label ‘social enterprise’ is, in both instances, misleading.
The government (and for that matter the last lot too) seems to see social enterprise as the answer to public service reform, funding for the not for profit sector and pretty much everything else. And it’s easy to see the attraction – save money and be seen to be supporting good causes (and I mentioned saving money, right?). Social enterprises, for their part, are generally happy to keep quiet, pick up the cheques and concentrate on doing the things they want to do…and who can blame them? Social enterprise is a small part of overall business in the UK (and only accounts for a modest proportion of the not for profit sector) and whilst I believe there’s significant growth potential, I don’t believe it will ever dominate our economy.
Meanwhile we seem to leave the commercial sector more or less to itself to generate profit for private investors, often with a cost to society at large and the taxpayer in particular. A bank branch in a poor neighbourhood may be regarded as ‘commercial unviable’, but the costs to society of the financial exclusion suffered by that community are ultimately borne by the state. If anything like as much political and financial backing were put into making private sector businesses more social as goes in to supporting social enterprise we could achieve real transformative positive social and economic change.
Corporate Social Responsibility (CSR) has not improved substantially over recent years. You only have to read the Centre for Responsible Credit’s report on bank’s CSR programmes to see how poorly they fare – even in comparison with their overseas contemporaries. There are some honourable exceptions and moves to develop more holistic CSR programmes that are integrated with corporate plans, supply chains, culture and practice, but these are the exceptions. For the most part they are little more than glorified marketing strategies, bolted on to corporate plans as a way to make companies look good and employees feel good.
If we want to improve public services, to support and build assets and resources among deprived communities, stimulate social action and create a modern economy fit for the 21st Century, then we need to be honest about the respective strengths and weaknesses of different approaches. Until we do so we will carry on allowing some businesses, some charities and some social enterprises to get away with poorly serving social interests.