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Enterprising steps for council mutuals

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Social enterprise has been around for some time in healthcare, but is a relative novelty in local government. Claire Read reports on the key themes from a special lgc/capsticks event.

Representatives from across local government heard at first hand from people dealing with the challenges of spinning out - ie, splitting off part of their services into social enterprises. Their contributions covered a wide range of issues.

1. Social enterprise is becoming a real option

With local government required to deliver responsive, innovative services for less funding, social enterprise is no longer a mere curiosity but a viable option. It is a policy with central backing, explained Natasha Price of the Cabinet Office. “The government is really supportive,” she said, as she outlined the assistance available for councils considering going down the social enterprise route.

2. It is not an instant solution, nor a way of carrying on without change

“Social enterprise is not a quick fix,” emphasised David Harrison, director of social business advisory firm Pitchfork. Keynote speaker Lance Gardner agreed: “Only become a social enterprise if it’s right for your employees and your community.” Mr Gardner, the chief executive of Care Group Plus, a mutual providing health and social care in north-east Lincolnshire, added: “Don’t do it just to carry on doing what you’ve always done in the way you’ve always done it.”

Action Learning Sets

Capsticks’ Action Learning Sets, supported by LGC, are three half‑day events exploring the challenges of setting up a social enterprise that will take place in central London from November to March.
For more details, go to

3. Control freaks need not apply

“Social enterprise is about a much more involved set of relationships,” said Cliff Mills, a consultant to Capsticks. This, he suggested, can be unsettling for managers. “None of us has been trained to give away power, and that’s what we’re doing. Social enterprise is less about coercive power and more about influence, and that’s a difficult change of mindset.”

4. Get employees on side

Employees will, therefore, need to think differently. “You need to get them on board from day one,” said Danielle Procter the chief executive of Social Purpose Business Partners. “Unless you take people with you, it will not work.”
Part of this might be acknowledging that there are skills gaps.

Debbie Medlock, assistant director of service delivery for adult social care at Surrey CC, gave the example of
their ‘spun out’ social work pilot services. “We had to help our practitioners start to behave like a business,”
she explained. “People have to understand that everything has a price and a value and that’s difficult, because they’ve never had to do that before.”

5. Plan, take your time, but don’t reinvent the wheel

Remember that social enterprises are businesses, and that setting up businesses takes time, Ms Procter reminded delegates.

“Keep an eye on your day job but make the time and space to plan the social enterprise,” she suggested.

Mr Gardner urged attendees to draw on the experiences of the trailblazers who have gone before. “Don’t fight the battle on your own, because you don’t need to any more,” he said.

What is a social enterprise?

In the public sector a social enterprise is generally understood to be an organisation that:

  • was previously part of the state but has now ‘spun out’ and become autonomous
  • is run as a business but continues to deliver public services and reinvests any profit for the public benefit
  • is employee controlled: the owners are the employees, who each have a say in how the organisation is run
  • fosters strong, collaborative relationships with service users

What are the benefits?

There are many reported benefits from social enterprises, including:

  • increased productivity
  • greater innovation
  • increased employee satisfaction, not least because they have the power to make the changes they know are needed
  • greater co-operation with other service providers
  • better, more responsive services for users

This is the latest in a series of articles, sponsored by Capsticks, looking at the increased role of social enterprises in local government and the issues arising.

For more and to watch a video of this event, including interviews with key contributors, go to:

Enterprising steps for council mutuals

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