Wednesday, 6 July 2011

The Transition Institute asks: Where does social enterprise fit into the pensions debate?

Now is as good a time as any to ponder the question: where does social enterprise fit into the pensions debate? With parts of the public sector striking and the gap between what Government and many in the public sector believe to be a fair position widening, we ask, what does social enterprise bring to the party?

On the face of it, the answer would seem simple as social enterprises are businesses that value and are often owned by staff but can only offer terms and conditions that the market for their service or product will support. But of course this general assertion becomes much more complex when you look at public sector spin-outs. How can independent providers undertake to maintain current terms and conditions of public-sector staff and still find a margin to ensure sustainability? And if they can't do that, what will attract people to entrepreneurialism when they have so much to lose by transferring to new models? What's in it for them?

It goes without saying that people in the middle of this transformative exercise deserve a straight answer and, there too, things can be overly complex. In the first instance most social enterprises do what they can for staff as staff buy-in and motivation are what makes the whole endeavour work; without that it isn't social enterprise and it doesn't work. In the case of public-sector spin-outs, to date the approach to pensions have ranged from all the staff of one new entity having to renegotiate their pension into a company scheme through to one large very public spin-out that not only won the right for existing staff to retain their pension rights but the ability to offer new staff the same public-sector pension benefits. What is unusual about this latter case is not only the generosity of the offer, but also the fact that they were able to get a decision from central Government one way or the other.

On this important subject I have two headlines: one, which may surprise you, is that most of the staff who want to move to the social enterprise model are so enthusiastic about taking control of their service that they are doing so despite the knowledge that there is potential to lose their full pension rights; and two, getting a decision out of Government on this issue is as hard today as it was 6, 12, 18 months ago.

Clearly something has to be done, and that is why the Transition Institute, which I am interim chair of, is looking at this as a top priority. Everywhere we go we are being told spin-outs (public-sector workers who want to establish themselves as independent service providers) and spin-ins (social enterprises who want to tender for public-sector contracts) are unable to get guidance on the pension issue. This has not stopped some going ahead, but if we are to get the wheels turning faster to see the current trickle grow into a good steady flow, we need clarity and a consistent policy on this.

To help us I urge you to look at the Transition Institute blog where we are welcoming comments from people about their experience. We intend to build a picture to clarify what is happening on the ground and what the consensus is on the most helpful position Government can take. We are asking, what are the doers doing?

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