By Lucy Phillips | 4 August 2011
Health care providers will need extra help if they are to set themselves up as social enterprises and realise the government’s ambitions for the sector, a think-tank said today.
A report by the King’s Fund says that the organisations will need legal, financial and other support if the prime minister’s vision of creating ‘the largest and most vibrant social enterprise sector in the world’ is to be achieved.
The report, Social enterprise in health care: promotingorganisational autonomy and staff engagement, recommends that NHS commissioners offer longer-term contracts to enable social enterprise providers to establish themselves in a more competitive marketplace.
Start-ups will also need more support to manage staff concerns over changes to their employment terms and conditions and pensions, the think-tank says. The report identifies staff anxieties because of conflicting communication about the government’s changes to the NHS.
The findings show that despite the government’s rhetoric and commitment to establishing widespread social enterprises in the sector in the Open public services white paper, the numbers of staff leaving the NHS to form new co-operatives is not keeping pace with this vision.
But where social enterprises have been established, the think-tank reports a number of benefits, including reduced bureaucracy and quicker decision-making. Allowing the bodies to reinvest surpluses also acts as a motivator for staff.
Dr Rachael Addicott, report author and senior research fellow at the King’s Fund, said: ‘Even at this early stage in the development of the social enterprise sector, it’s apparent that patients and taxpayers could really benefit.
‘However, there is still a lot of work to be done by NHS commissioners, the government and aspiring social enterprises to turn the vision of a thriving social enterprise sector into reality.’
Stephen Bubb, chair of the Social Investment Business and chief executive of the Association of Chief Executives of Voluntary Organisations, echoed the call for more support. He said: ‘The report is right to highlight the need for more business and financial support for social enterprises as vital to enable the sector to grow.
‘Social enterprises, especially new ones, face lots of challenges in the NHS tender process, not least a lack of experience of the process itself rather than the ability to deliver a service.’
Bubb, who also led the work on choice and competition for the NHS Future Forum during the government’s ‘listening exercise’ on health reforms, added: ‘To bid successfully for NHS contracts social enterprises need a reliable cash flow and help devising business plans and governance structures in order to ensure they are the kind of financially sustainable organisations that commissioners can feel confident doing business with.
‘Experience tells us that once they win contracts, the finance from those deals can help them fund their operations, reduce reliance on grants and, most critically, allow them to deliver value for money for the health service.’
