|Rt Hon Nick Hurd speaking to Patrick Butler of the Guardian|
Yesterday I spoke at the very well organised Guardian social enterprise conference, where some good debates were held and I got to meet up with lots of my social enterprise colleagues. Since the cuts began in earnest, events have become rare so you would expect a heightened buzz, but unless it was just me, I wasn't getting that. I think it's fair to say folk were subdued, was it battle fatigue?
Keynote speaker Nick Hurd, our Minister, was interviewed by Patrick Butler editor of Guardian Society, where he spoke of the need to create a level playing field for social enterprise, his regret that Central Surrey Health lost out to the private sector, his understanding of the frustrations many have had with the Work Programme and unhelpful public sector commissioners who still don't get it. All pretty hot topics and yet when he had finished, no hands went up for questions. Patrick had to press people for a response - that's not like us is it? Speaking to delegates I realised how measured most people have become and although there was still the usual social enterprise optimism with people pitching their ideas to one another, there was something else in the air. Was it caution?
I think it is fair to say that while public sector outsourcing is a big part of our agenda, especially in the way in which we can support those public sector workers who are looking to spin out their services as mutuals, for those social enterprises looking to tender their services into the public sector, business can be bonsai slow.
There was much talk about money being made available, with Nick O'Donohoe from Big Society Capital (formerly Big Society Bank) outlining the opportunities for borrowing there, but again this did not get the audience response he was perhaps expecting.
I spoke over lunch with another one of the big investors attending the conference who told me of the pressure he was under from his lords and masters to lend but was struggling to do so. He explained this by making a point I made in my last blog: getting the money out was a problem because potential borrowers did not have the right level of business support.
Our market is still young and, not only that, it is complex. Manufacturers have ideas that are often so innovative they look too risky to back. Contracts in the commercial sector, as elsewhere, are scaling up to take advantage of economies of scale and as such are proving too big for fledgling SMEs who can do part but not all of a potential order, and public sector spin-outs cannot borrow without an established, fully constituted asset-holding governance structure in place. And without investment they struggle to get that far.
Even for those who have spun out, public sector contracts that carry no recognition of social value and just look at price fail to recognise the added social value of social enterprise that is so integral in Chris White MP's bill which I discussed with him at the House on Monday. Without an increased understanding of the economic and societal advantage of social value - getting the disabled people employed, the unemployed young people returned to work, the environmental damage reduced, the vulnerable families supported - these will all get put to one side as government discounts are driven upward and the lowest unit price wins.
If we are not going to miss out as a society we must decide what we want our future private and public sectors to look like and then we have to invest not just capital but also expertise to create that vision. Social enterprise offers a unique blend of self-help, innovation and inspiration but as it has an uncomfortable relationship with both the traditional public and private sectors, someone has to nurture it and given the government has most to gain from its growth, that would be a logical place to start. The Japanese turned a rural economy into a leading global industrial nation in 50 years through smart thinking; we bounced back from the Second World War in 20 years because our successive governments shared a vision of a prosperous nation. The challenges we face are no less monumental and only a big vision for economic growth that leaves no-one behind will snatch glorious victory from the jaws of incremental decline.