Rise of the social enterprise model in social care

Social enterprises have their origins in the 19th century co-operative movement, but their ethos fits perfectly with that of modern-day social care, writes Mark Hunter

A ragged band of Rochdale weavers from the 19th century might seem an unlikely model for 21st century social care. But the principles of social enterprise, first drafted by the Rochdale Society of Equitable Pioneers in 1844, are now being put to use across an astonishing array of health and social care initiatives.

The Annual Survey of Small Business UK estimates there are about 62,000 social enterprises in the UK with a combined turnover of at least £27bn. Social enterprises account for 5% of all businesses with employees, and contribute £8.4bn a year to the UK economy. Of these, about one in three lists health and/or social care as their principle source of trading income.

Social enterprises range from the smallest of community projects, employing a handful of staff, to the multi-faceted social care organisation Turning Point, with its turnover of more than £60m.

Social objectives

“The term social enterprise covers a huge diversity of organisations that at first sight might appear completely different,” says Ceri Jones, head of policy at the Social Enterprise Coalition. “But there are a few common threads that link them. They all trade in the marketplace rather than be dependent on grants or donations; they all reinvest the major part of their profits back into the business; and they are all driven primarily by social objectives.”

There is no legal definition of social enterprise. Some charities use the term and many social enterprises have adopted charitable status for tax reasons. But the term also covers workers’ co-operatives, not-for-profit organisations, community interest companies (CICs) and mutual societies.

“The background of social enterprises is in the co-operative movement, so many do not have charitable status because charities cannot have employees on the board,” says Jones. “It’s also an important part of being a social enterprise that you are not dependent on donations. This means they tend to be more enterprising and ready to take risks than might be the case in a conventional charity. Social enterprises are flexible and dynamic.”

Of interest to embattled social care staff is the suggestion that social enterprises might be more pleasant places to work than the conventional statutory bureaucracies and the private sector. And that is a key driver behind the creation of one of the first social work co-operatives, which is being set up in North East England to supply social work staff to local authorities (see below).

“By their nature, social enterprises tend to place a lot of emphasis on staff empowerment and development,” says Jones. “Staff are involved in the organisation’s decision-making processes, and managers are given the autonomy to make decisions on a day-to-day basis. As a result, recruitment and retention rates are extremely high, which is not something you can say about every sector of social care. For instance, at the Sandwell Community Trust, the average number of days lost to sickness is just 0.34 per year per employee.”

Working partnerships

Fostering Through Social Enterprise is a group of charities and not-for-profit organisations whose members provide about one-fifth of independent fostering placements. Its chair, Alan Fisher, believes the “shared ethos” of companies that are not built on the profit motive can be useful in creating working partnerships with foster carers.

“I think there is a sense of staff and carers working together which is important because foster carers often feel very undervalued and isolated,” he says. “They certainly aren’t in it for the money, so perhaps it helps if we aren’t either.”

Fisher emphasises that, although many of the group’s members are charities, they have to adhere to strict business principles and practices. This is especially so during hard economic times.

“We exist in a business environment and we are subject to the same sort of pressures as anybody else. In fact, because social enterprises tend to be pretty lean organisations, there is perhaps less scope for efficiency savings when times get hard.”

Suited to social care

Nevertheless, Fisher feels that the social enterprise model is one that is well suited to social care. “Because we are not motivated by profit it concentrates the focus on outcomes and creates a strong united sense of purpose,” he says. “I think it’s generally true that staff morale is high. We have a pretty stable workforce – people do not come and go, which is not something you can say about every area of childcare. So, yes, I think any area of social care could adopt the social enterprise model. There’s nothing unique about fostering.”

Caroline Tomlinson is consumer support lead for the personalisation social enterprise In Control. With In Control’s support she has recently set up Shop4Support, which enables people with disabilities to shop online for products and services that will support their independence. Shop4Support is also a social enterprise.

Having worked in the statutory and voluntary sectors, Tomlinson is clear that a benefit of the social enterprise model its independence.

“If you are always waiting for the next grant then it’s like being on the end of a piece of elastic,” she says. “It can hold you back because you don’t know what will happen when the money runs out. You can spend so much time fundraising that you don’t have enough time to do what you really want to do.”

Recent growth

Tomlinson is also keen to break away from the suspicion with which people in the public, voluntary and private sectors view each other’s motives. “There’s a lot we can learn from the commercial world,” he says. “If we can use those skills to generate an income then that gets recycled back into the business and that will benefit people who use the services.”

The recent growth of social enterprise within health and social care has been fuelled by government policy that has increasingly recognised the potential for the model to reinvigorate the contribution of third sector organisations.

This has culminated in the NHS Next Stage Review, which explicitly recommends that new social enterprises are created to deliver primary and community services, and gives all NHS staff the “right to request” help from their PCT to enable them to set up a social enterprise.

The message is clear: if you like the sound of social enterprise, why not set one up yourself?

“Co-operative has made us more creative,” says founder

Revolution is in the air. With social workers’ opinion of their employers plummeting to new depths, could it be that the social work co-operative’s moment has arrived?

Former social worker Walter Young hopes so. Five months ago he teamed up with social enterprise specialists Dr Guy Turnbull and Carol Bell to create a co-operative in North East England that will supply social work staff to local authorities. There are no external shareholders and the staff receive a share of the profits on top of their “competitive” rates of pay. They also have a say in how the Social Work Co-operative is run.

“We are still at an early stage,” says Young. “But our first supply staff have just started work. At the moment we are supplying locum staff providing specialist assessments, and we are looking at providing mediation services in the family courts.”

Interest in the co-operative has come from a range of social workers, from both adults’ and children’s services. Many have been keen to explore new ways to deliver social work, says Young.

Frustration at bureaucracy

“I think it’s true that a lot of social workers are demoralised, and that is partly due to how people have been managed. I don’t think the problems have been about personalities or groups of people; you can’t say it’s all the fault of managers. It’s much more of a systemic problem. But we hope we can produce a new model.

“Obviously, during the early days, we have to fit in with the system that is already in place. Ultimately though, we’d like to see a change in the way that social work is delivered.”

Young says the response from local authorities generally has been positive, although Turnbull expresses his frustration at the bureaucracy surrounding procurement policies and CRB checks. “It’s been a slower burn start-up than we envisaged,” he says.

However, Young believes that the co-operative nature of the venture means that staff have been a lot more willing to invest their time, energy and ideas than might otherwise have been the case.

“I think if this had just been a private company then I wouldn’t have been able to ask as much as I have of people,” he says.

“But because we have set out with an ethical set of values, I think we have attracted a lot of people who share those values. It has made us more creative.”

This article is published in the 24 September 2009 edition of Community Care under the headline “History in the re-making”