Down but not out: Reporting from the Guardian social enterprise conference 2011

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.

If Virgin is the answer, it's the wrong question

Prime Minister David Cameron and Cabinet Office Minister Francis Maude welcome Big Society Award winners Central Surrey Health to No. 10. 22 November 2010; Crown copyright

The flagship social enterprise, Central Surrey Health (CSH) has been in the news this week. Having pitched for a £500 million contract, it lost out to Assura Healthcare Ltd, a private company that is 75% owned by Virgin. CSH is considered an exemplary social enterprise for very many good reasons and not just because Cabinet Office Minister Francis Maude has called it his 'pin-up' mutual. It is incredibly well run, innovative, forward looking and inspirational. From the very start, the company was all about being No. 1 at giving the very best nurse-led, caring healthcare to the community. In its journey, CSH has developed numerous innovations in community healthcare and the Government has even gone out of its way to support its progress, including bestowing a Big Society Award in November last year. And so we are all gobsmacked that it has lost out to a big, new, private sector provider.

My friend Patrick Butler, the Guardian's Society Editor, has written an excellent blog http://www.guardian.co.uk/society/patrick-butler-cuts-blog/2011/sep/19/social-enterprise-big-society-gets-reality-check?INTCMP=SRCH  that outlines the issues and I urge you to read it. So I shall not repeat the debate, but I do have something to add.

Today, via Twitter and the Transition Institute (the body we set up with Nesta to promote public sector spin-outs that maximise social value, and which I chair), the debate seems to be swinging between the why bother? camp and the what's all the fuss about? lot. I agree that some social enterprise failure was bound to happen and that not all social businesses were going to win contracts. Fair enough, but this was a top notch social enterprise up for doing what it does best. So what was the question posed by Surrey Health Authority that Virgin could answer better than CSH? Without having all the facts, I am inclined to speculate that if Virgin had the right answer, it was the wrong question.

I hope these issues are debated at the Labour and Conservative party conferences, but I also hope people avoid drawing the conclusion that this means social enterprises or social spin-outs can't cut it. The truth is they can do the job, they can deliver value, but the system of commissioning has not caught up with the new choices and innovations. Until commissioners start asking the right questions, we will get these sort of howlers that are no good for anyone's health, much less vulnerable patients.

I give you ....... the Transition Institute

This week we launched  the Transition Institute (TI) with our partners Nesta. We had a pre-launch dinner at the Hoxton Grill, in partnership with our friend Craig Dearden-Phillips, the night before and then the official launch at the wonderfully snazzy Nesta building 1 Plough Place on Thursday.

The dinner was exceptional. It was one of those where almost everyone who had been asked accepted probably because as Patrick Butler, Editor of Society, Health and Education Policy at the Guardian said, it read like a who's who of social commentators in this field, which is persumably why he agreed to chair. I kicked off by welcoming everyone and explaining a little about the TI, its vision and our journey up to the launch.


The TI is a platform to debate, reflect and produce research, guidelines and best practice in the field of public sector outsourcing. It will not deliver support but act as a commentator among those that do. It will be the place where decision makers such as local and health authorities go to find out how to outsource effectively in a way that will maximise social value. Those that are involved in the TI and subsequently get involved hold one thing to be true: we agree that public services can be delivered more effectively through independent provision but only when providers want to maximise social value above profit.

Snogging Ed Miliband

Today was a fun one.

Happy New Year! 2011 is going to be a wee bugger

New Year finds me clear headed in Cornwall. Last night we were invited by my friend Emily Scott to her fabulous restaurant, The Harbour, in Port Isaac. Emily is a stunning chef and last night she really treated us. We had red onion jam and goats cheese tartlets, locally caught crab in a light salad, monkfish in pancetta with lemon mash and pannacotta and raspberries followd by chocolate truffles, yum! The village gathered outside the restaurant which is at the head of the slipway for some super fireworks and a male (nude) swimmming race across the harbour which the health and safety police have not been able to put a stop to, yet. This morning I have awoken to views of the surrounding countryside, including an unbelievably large cow.

Scanning Twitter I see many are posting their predictions for 2011, whilst I'm tempted to join in, I think it will be a bugger of a year with much rear guard action and can only advise we keep our spirits and left hook up, and not pull our punches as my dear old Dad used to say.

I was over the moon yesterday when the announcement came that my friend Stephen Bubb, ceo of acevo, was to be made Sir Stephen. As Vice Chair of acevo I have had the chance to work closely with Stephen who is a very rare bird indeed. Whilst he cultivates a persona based on hedonism he is, in fact, like a swan, frantically paddling under the water to promote and these days, preserve all that is best in the third sector. I have always admired his approach which, if you are a fan or irony, which I am, is self deprecating. In any event, Stephen is bloody effective and a good laugh, so well done to you dear and the team at acevo who, like my SEL lovelies, work like stink for the sector!

Other honours included OBE's for SEL board member Gordon D'Silva, founder and leading light behind the ground breaking Training for Life, and Steve Wyler, Director at our old friends the Development Trust Association. It will be organisations like Training for Life, the DTA and Community Links, featured in a shattering article by Patrick Butler in last weeks Guardian, that will be picking up the pieces of the cuts. I could not believe my eyes when I read the piece, much of it in the words of David Robinson, one of the most respected leaders of community work anywhere in the world. He told us that this beacon of good practice, much needed in such trying times, was itself facing closure. That can only mean one thing, no institution, group or icon is above the waterline.

So, when the going gets tough the tough get going? Well yes, but many of us don't work for the tough, we represent society's least heard, least valued and most vulnerable, so that isn't terribly helpful. We shall all need this break, like boxers we have gone to our corners for some refreshment, and when the bell sounds we will have to come out fighting!

Making friends in Merton

Today I chaired a social enterprise event in Merton. I really enjoyed it as the group the council had brought together were really on the ball. We had old hands like Nick Temple from the School for Social Entrepreneurs and some fresh faces from Merton based social enterprises like the inspiring Annys Darkwa from Vision Housing which works with newly released ex-offenders to find suitable, sustainable housing. The purpose of the meeting was to give the council a steer on taking their plan for social enterprise development on to the next level. James McGinlay, Head of Sustainable Communities at Merton Council opened the session and laid out his commitment to making Merton a place where social enterprise is making real impact. I was listening intently as SEL are about to publish a route map for local authorities to engage with social enterprise and achieve maximum return on investment.

As I keep saying, if you mean to do something then you are more likely to do just that. By the same vein, if Councils set about to grow social enterprise, they'll do it.

Much of what was said this aternoon underlined the 4 key pillars in the route map. These pillars are firstly to extend the right to request to all public services. This would encourage and enable public employees and community activists to spin off a given service, out of direct public management, whilst improving it. Secondly we are arguing for local and central government  to invest in developing a culture of entrepreneurship within communities through existing networks. My plea to all government is not to establish new support bodies but work through existing ones with a proven track record. Thirdly social enterprise creates jobs, it should therefore be a priority within every economic development strategy. Lastly procurement and commissioning guidelines should include social clauses, these will ensure the public sector gets the most from social enterprise and they in turn will have ample opportunity to demonstrate their social impact. With social clauses local authorities can get more bang for the buck.

All of these themes came up spontaneously  in the discussion today, which makes me think we are on the right track.

Finally I came home to two children that needed seperate costumes for their respective school plays tomorrow. Once again I seemed to have missed the memos. Sam needs to be a sort of Ali Baba character and Katie a punk rocker. After a lot of running around the house I think we have pulled something together. They both seem pleased.

Katie does counter culture

I am now going to sit down quietly avec a gin and read today's Guardian in which I alongside some of my friends in social enterprise are featured. Its all good stuff, a four page special on social enterprise put together by the lovely Patrick Butler. The timing is perfect, because now is exactly when we need to be asking ourselves the tough questions Patrick poses, namely where do we want to go and how do we plan to get there?

Former Canadian PM pleads for UK social enterprise leadership

I am at this year’s Guardian newspaper public service summit. Obviously the talk is of cuts, up to 23% in the public sector according to our Chair, David Brindle, Public Services Editor of the Guardian, and people are wondering about the changes to come. I am here to talk about where social enterprise fits in.

I settled in to hear our key note speaker the Rt Hon Paul Martin, former Prime Minister of Canada who told us how, when he was Finance Minister, he and Treasury colleagues began the process of sorting out Canada’s rising deficit literally on the back of an envelope. He told us it was arbitrary and cold, but the fact was after 30 years of rising spending and accumulated deficit he felt it was absolutely necessary. He gave each member of the Government target cuts, allowing individual Ministers to appeal but refusing to budge on the overall bottom line.

I liked his line that when you are a finance minister it is better for everyone to hate you, rather than a few people. I wonder if that’s true for all those who have unpopular jobs to do?

I was really interested in this very bold approach but imagine my delight when he said that, in considering what the UK has done 'right', the answer is social enterprise. I was all ears.

He described it as a marriage of left and right, compassion and social entrepreneurship. He, not I, told the conference that business entrepreneurs can tap markets but social entrepreneurs cannot because they will always be hampered by their social aims when it comes to borrowing. He told delegates that the UK is leading the way with innovations including Community Interest Companies, which he wished they had in Canada.

He said 'if you can build on this growth in social enterprise, you will be ahead of everyone'. Upping the anti he told us that social enterprise improves quality of life, when ill health is often the collateral damage of the free markets. He repeated the point that in social enterprise you will be ahead of everyone, Canada, the US... in fact everyone.

I was dancing in my seat, it was all I could do to stop myself cheering. It was wonderful. He set a tone which meant that every subsequent speaker had to comment on social enterprise, building a debate that grew exponentially.

He posed the following question: “I would ask, why would the state not provide incentives for social enterprises?” He told us that the great recession of 2008/9 has done its work, it was and remains the perfect storm that has rendered getting Globalisation to 'work' the great challenge for our time. It's important to deal with it now, he told us; 'cut the deficit, regulate capital, and create Global solutions to this Global crisis'.

Leaping to my feet in questions I asked Prime Minister Martin, if he had social enterprise in Canada when he was PM, what would have been his vision for it?

He responded that his vision for social entrepreneurs now is that they really 'have a go' at capital markets. He said that in his view there are people who are social activists that are every bit as entrepreneurial as capitalists. Finally he said, “my remarks to you are almost a plea. A lot of us are looking to you for leadership in this area, we in Canada have not gone far enough, the US has gone further, none of us have gone as far as you have, we are all looking at the UK to show us the way.”

In response to ACEVO CEO Stephen Bubb's question around the need for increased social investment he said, "I think a social investment bank would be good, but to be honest access to the capital market is what you want. If the Twitter people had to go to a grant agency they would never have got money. We have a third world in Canada, Aboriginal Canadians who have a strong entrepreneurial leaning but no one will lend them money. Mezzanine financing is perhaps the answer, maybe Government should be taking a role in supporting initial investment? But what social entrepreneurs really need is access to the market.”

Finally he told us to get the public on your side, much as Philip Blond of ResPublica had told us to do at Voice on Tuesday. It was a wonderful speech.

Next up we had Rob Whiteman, CEO of Barking and Dagenham Council, who told us, that in the last decade we in the UK have improved things by investing in them and in the next decade we will have to improve things by spending less.

He told us that professionals should be on tap and not on top, that you need advice but don’t let it hamper your innovation. He mentioned working with social entrepreneurs running services such as libraries. Incidentally I have always thought public libraries are a natural home for social enterprise.

Simon Godfrey director of public sector strategy, business development and government relations at SAP, the IT and infrastructure giant was concerned that the private sector will outstrip the public sector very soon, as the population ages we need to understand that technology is key in delivering a quality life style to the aging population.

I was up next with Sir Andrew Foster, Chair of the 2020 Public Services Trust, Dame Julie Mellor, Partner at PwC in a session chaired by David Brindle.

Sir Andrew painted a picture of moving us from 'public services to powerful public' Dame Julie mentioned the work SEL are doing with PwC on dealing with the fiscal gap through social enterprise.

I had to abandon my planned speech as everyone had already mentioned social enterprise and my job was to pick up their points. I told them I was not an advocate of cuts but that I was an advocate for change. That the current crisis, described by Sir Michael Bishard, director of the Institute for Government as a burning platform, would offer change and that I felt that had to be an opportunity for my members.

I told them Government had to be a better shopper, that thinking it can both procure services and supply them efficiently was odd, that we were not services on the cheap, we were just better and therefore less costly in the long run, that social clauses in contracts are not in contravention of European law, that social enterprise blurs the line between public and private and that like the internet we are spontaneous, compelling unstoppable and of the moment. I concluded that opting for social enterprise was not a difficult choice, it was the only choice.

I was delighted when most of the subsequent questions were on social enterprise. I fielded concerns that community initiatives might lead to a post code lottery, that social enterprise might not be real engagement, or that it might be seen to be middle class (ask John Bird about that.)

I have since been asked to talk to so many delegates that I shall be busy for months getting round them all. That would be the job then.

I have snuck off to give you the heads up, both Stephen and I are blogging this one up a storm. Patrick Butler, Head of Society, Health and Education at the Guardian came up to me at lunch and said, you must be pleased. I congratulated him on organising such a good conference on social enterprise. Well done Guardian.

I will head home at the close of play today and not stay for the Gala Dinner as this is my second residental conference this week and I haven't seen the family much. This weekend I'm going to be doing some more burning and mulching at the allotment, perhaps putting in some broad bean seeds if the warmer weather holds.

I need to start thinking about our lawn. My husband is chuffed that the chickens have started laying again but I fear it is at the expence of my lawn which they have scratched to buggery over the winter. Bad chickens.

Socially speaking it should be a quite weekend with only my mate Julie popping over to debrief me on a speech she is giving to the law lords tonight on privacy law and the recent case involving a certain footballer. Julie is International Editor of a well known celebrity magazine so I should imagine they are looking forward to hearing what she has to say. She on the other hand is dreading it. She told me yesterday that's she'd rather interview Madonna. If making speeches isn't your job its hard to take in your stride. Still, to be honest, at most conferences I'd rather be in the garden. But not today, I wouldn't have missed it for the world. A great conference, and I'm looking forward to my little chat with Prime Minister Martin, we both seem to have it bad for social enterprise.

Straight talking

I thought I’d take the time spent in the hairdresser’s chair having my hair straightened (first time ever – hope it doesn’t fall out!) to update you on Social Enterprise Day.

No 10 was fun, bumped into lots of old friends including SEL pin ups Micheal Pyner of the Shoreditch Trust and Campbell Robb, who is leaving the Office of The Third Sector in December to take over as CEO of Shelter. Good for Shelter, but our loss. Campbell has been a great champion of social enterprise and has been particularly effective in developing support for the movement to play a key role in England’s economic development strategy. Sounds boring but makes all the difference to our members, who are crying out for the information, guidance and support provided through things like CapacityBuilders and the Social Enterprise Knowledge Exchange, both of which Campbell has put in place. He will be missed.

At the reception the Prime Minister spoke warmly to the gathered social entrepreneurs, telling us how much he admires what we do. He said he applauded the fact that we are working to make people's lives better. It sounds cheesy but was really nice actually and I think he meant it. I managed to hook up Reed Paget of Belu Water and the amazing Lynn Berry of the massive volunteering organisation WRVS, who is on a mission to make her organisation more environmentally sustainable. WRVS makes and distributes more sandwiches than anyone else in the UK and they also sell a great deal of bottled water, so let’s hope Belu hits the mark. Wholfing a few delicious canapés courtesy of CafeSunlight, Peter Holbrook’s outstanding social enterprise, I headed off...



...to The Guardian conference in Birmingham where I joined the round table delegate discussions. The questions centred on how we can deliver more public services and whether social enterprises can work with the private sector. I did an Anthea to Patrick Butler's (Head of Health, Society & Education at The Guardian), Brucie and we each read out individual table findings. One of the things that struck me was how positive people are on the proposition of working with the private sector, the general consensus being that as long as we negotiate effectively it is absolutely possible. I have been saying this for years and as a result SEL has had several highly successful commercial relationships with the private sector. I had always thought it was controversial and so was fascinated to see that in that auditorium at least, the attitude was very positive.

We then had speeches from Vince Cable of the Lib Dems and Barbara Follett, Under-Secretary of State for the Department of Communities and Local Government. Vince was really interesting, he had clearly thought the issues through for himself and confessed to us all that until he recently met Margaret Elliott from Sunderland Home Care he didn’t really understand was social enterprise was. Having got to grips with it he feels it has a strong future, particularly in delivering local services. In print recently he un-packed the 'big government vs local government' debate, arguing we need local services delivered to national standards - I think he’s spot on. Barbara said ‘social enterprises express what people really feel’, I liked that.

In the q & a Vince threw my question straight back at me, asking what I think government needs to do to better support social enterprise. I said:

1. Government needs to be a better shopper - buying from organisations which deliver real positive social change

2. Existing capacity building support (which Vince had slightly upbraided in his speech) is vital and needs to be continued and developed.

Caught the train with Patrick and Mark Gould from The Guardian, Gemma Hampson of Social Enterprise Magazine and our Matt Jarratt, where we had a good debate over whether social enterprises really will end up running public services on a large scale. We agreed that they could do rather well if the planets align in our favour. Earlier I had chatted to Sophi Trachell, MD of Divine Chocolate and SEL’s co-Chair, who had been frustrated that The Guardian had chosen Social Enterprise Day to report on the collapse of Total Healthcare. I put this to Patrick who maintained that he had done it to put the debate about the future of public services into context: social enterprise can be a winner but it can lose too. Fair enough I think, when Woollies went down no one said that it marked the end of high street retailing.

We sat around some poor chap who looked like he was trying to work. When we got out at Euston I apologised for disturbing him and he said he had really enjoyed the conversation, gave me his card and said he would welcome a further chat about the social impact I mentioned…. everyone is interested in social enterprise, they just don’t know it yet!

As I finish typing I’m presented with the result of the hairdresser’s endeavours. They say it won’t look like this forever... I feel a gin coming on.