Social Enterprise

Why is ‘social enterprise’ central to the public service revolution?

Social enterprises are businesses that are established to tackle a social or environmental need — a category of civil society organisations. Rather than maximising shareholder value, their main aim is to generate profit which can then be used to further their social and environmental goals. The social enterprise movement is growing fast and it is incredibly diverse, encompassing cooperatives, development trusts, community-owned businesses, housing associations, and social firms among many others.

Any governance form can be used for a social enterprise.
diagram of social enterprise structures
What makes a social enterprise can be summed up in 4 qualities, with an additional 2 qualities if the model is mutual.
diagram of social enterprise qualities

 

The benefits a mutual social enterprise should offer to public service delivery are:

  • The creativity and innovation of employees through the power of mutual operations:

♦  Fulfilling a specific social purpose and delivering a clear set of outcomes

♦  Integrating end-to-end services, providing seamless provision.

  • An ethos of accountability to users and communities for what services are provided to deliver what outcomes —
    and how they perform:

♦  Ensuring outcomes are commissioned efficiently and effectively to fulfil social needs

♦  Sharing ownership and incentives to achieve best results

♦  Fully customer focused and responsive.

  • Operating streamlined delivery organisations dedicated to public value:

♦  Assets locked and profits fully reinvested

♦  Paid by results with sustainable, diverse trading income streams.

 

The difference between a ‘not-for-profit’ social enterprise and a ‘for profit’ company in terms of culture and ethos is illustrated in
the joint venture diagram below.

diagram of the qualities of a joint venture

Integrated Delivery Social Enterprise

IDSE logo

SocialPioneers believes that public sector agencies should be encouraged to promote employee-led mutuals that forge joined-up service provision from current service silo operations.
For example, SocialPioneers is working with Probation Trusts, police services and prisons to create three-way spin-offs that pool staff and resources for functions that are better fulfilled under one mutual operation than in the separate agencies. And opportunities exist for bringing together staff and budgets currently located in Local Authorities for social care and in the NHS for community health to provide joined up services for the frail elderly. Such strategic Integrated Delivery Social Enterprises (IDSEs) can produce better outcomes, more productivity and innovation, and less service cost.
As special purpose vehicles, IDSEs achieve:

  • End-to-end services integrated to secure a defined social purpose
  • Locked assets and reinvested profits
  • Better outcomes
  • Lower costs.
The benefits of spinning off staff into social enterprises and developing the social enterprises as community-focused mutuals (Community and Management Buy-Ins [CAMBIs]) are:

  • Engaged, motivated and productive employees
  • Community involvement and accountability
  • Improved innovation, transparency and effectiveness
  • Price and value competitive
  • Payment by results
  • Sustainability through diverse trading income streams.