Would we have had social enterprise without Margaret Thatcher?

Thatcherism taught us that a mixed market in the public sector is the future, and that a 'state or market' debate is outdated

Margaret Thatcher – a key figure in the history of the social enterprise movement? Photograph: Sportsphoto Ltd./Graham Whitby-Boot/Allstar

There probably aren't many Margaret Thatcher fans among social entrepreneurs, with most attributing the growth of market economics in social arenas to the measures introduced by Tony Blair. But would we have had the Right to Request without de-nationalisation or the Right to Buy?

As Ed Miliband said during parliament's tribute sitting, Thatcher was right to recognise that our economy needed to change. In 1982, she said:"How absurd it will seem in a few years' time that the state ran Pickfords removals and the Gleneagles Hotel."

Thatcher introduced the idea that government should stop being the default employer and that the public sector needed mixed models of delivery – thinking that has been shared by successive governments ever since.

Looking at public sector reform through the point of view of theTransition Institute, set up to promote increased social value in public service created through non-public sector providers, we can see two major spikes in change; the first when Thatcher allowed the private sector to enter the domain of public services such as in municipal maintenance and waste collection; and the second when Blair introduced the concept of social enterprise into education, health and the then Department of Trade and Industry.

At my organisation, the Transition Institution, we know that the market economy drives down costs but can also fail if equal priority is not given to the needs of service users and the wider community, termed social value. Our work shows what can be achieved when the priority of cost effective services are shared with the needs of those that rely on services. We promote the work of co-operative schools, staff-led community interest youth services, and mutual delivery of community care.

The Transition Institution calls for plurality, a drive for an increase in social and economic value, demonstrating the coexistence of free market forces and social responsibility. The introduction of the Public Services (Social Value) Act 2012 and the support of the cabinet office, led by Francis Maude, for the promotion of mutuals within the public sector have encouraged those seeking change in this field, but progress is slow.

Thatcher was perhaps the great advocate of the free market, even though employment in the public sector was 3% higher when she left office than it is now. She undoubtedly questioned the monopoly of the state and did not limit her introduction of market forces to the nationalisation of British Airways, British Gas and British Telecom, but went on to assert that the state can not commission, deliver and appraise every service without the emergence of a conflict of interest that does not serve the wider public, an idea continued under Blair.

In 2011, David Cameron said: "The Blair government took some good steps, like foundation hospitals and academy schools, but they were too tentative … The public already benefits from services delivered by private and third sector providers, from running walk-in clinics to providing school caretakers, and the government is right to recognise that there is scope to do more."

Yet even with that commitment and other stated aims to grow mutualism, social value and community engagement, we have yet to see a third spike. Many prospective and new public sector spin-outs continue to be confronted by sceptical parent authorities and voracious private sector competitors with the advantage that they can get in quick. As in Thatcher's era, it is money that counts: then inflation hit 21% and drove the government to think the unthinkable. Today, it's the deficit and, with banks limiting borrowing, those with access to capital are moving faster. I do not have the results of the 2013 national Transition Institute surveyyet, but I am willing to guess that access to capital is a big issue for today's independent public service providers.

Margaret Thatcher introduced an idea that continues to grow, that of a mixed market in the public sector. Her scepticism about the public sector led to a deep-seated faith, shared by some in government today, that only unfettered competition can give us quality and affordability. In contrast, some on the left maintain that only the state can care for its citizens.

This is 2013 not 1983 and if the banking crisis and subsequent recession have taught us anything, it is that it may be hard to describe and tricky to measure but what the public sector needs is a mixed approach – only a combination of competition tempered by social value can create affordable and sustainable world-class public services.

Allison Ogden-Newton is chair of the Transition Institute.

2012 Victory Parade: A celebration of faith, commitment and funding`

Today, I was at a meeting at the RSA just as Team GB's Victory Parade went by. I didn't want to miss out on the opportunity and so waited for the floats with Jaume Martorell, Network and Communications Manager at the Transition Institute, which is now based at the RSA and is right on the route of the parade. Jaume is from Spain where parades are a common occurrence, I told him that on the whole, we were not a big parading nation and this spectacle was unusual for us reserved Brits.

The atmosphere was very jolly with people smiling, cheering and waving flags. I fell into conversation with an delightful older lady jammed next to me by the crowd. After apologising for getting me in the eye with her flag, she told me how much she had enjoyed every moment of the Olympics and Paralympics, that she had gone to see both and thought they were 'wonderful'. It seems that few have missed out on the spirit of 2012 and, for those of us lucky enough to go to the Games, it has been magical.

My role right from the very beginning of winning the bid had been to work with the Third Sector in the Cabinet Office, then headed up by Ed Miliband, to ensure as many social enterprises as possible were able to contribute to the building, running and legacy of the Games. For social enterprise advocates, our starting point back in 2009 was the vision of the Social Enterprise Square Mile and for us this has turned out to have been a successful Games, with social enterprises like HCT providing transport on the site, Catering to Order supplying food to the construction workers and Clarity the soaps and detergents, both of which provide employment to the visually impaired. At the time, Ed had been really fired up by the Olympics and was extraordinarily supportive, using his influence to persuade key folk like the then mayor, Ken Livingstone, to give me the time to explain why social enterprise was so on message for 2012.

My gold medalist, John Charles, a great social entrepreneur

I thought today, as I watched the Paralympians, about inspiring social entrepreneurs like John Charles the extraordinary CEO of Catering to Order who set up the company after losing his sight at 18. For him, their success would perhaps be less surprising as he knows only too well what those challenged by disability – with the right support, guts and determination – can achieve. Not content with being a profoundly visually impaired, most of John's employees have similar difficulties and yet Catering to Order is commercial all the way. Now that deserves a gold medal.

Truly the greatest show on earth

Our family trip to the Olympic Village was in August when we went to see the men's hockey, something the kids will never forget. Joe, our 16-year-old, was particular thrilled as he is captain of his hockey team and was voted player of the year at the end of last season. It was an extraordinary atmosphere, hard to quite pick up on the TV and the Olympic Park was every bit as impressive and inspiring as you dared hope it might be. During a break in one of the matches, we even bumped into one of Joe's schoolmates, a fellow hockey team player and his family, so incredibly the Games left us feeling connected to our community even though they were evidently global.

As we left the Olympic Village we walked past the Aquatic Centre, which is now being managed by GLL, a great social enterprise that beat all other bidders in a highly competitive process to win this most prestigious 2012 legacy management contract. SEL, in our role as social enterprise ambassadors to the Games, supported its bid and I personally made representation to the legacy committee on its behalf, explaining the advantage of social enterprise in terms of its sustained commitment to local employment, community engagement rather than shareholders. So many victories made possible by vision and commitment.

Today, as the athletes went by, those of us on the pavement shouted our salutations and in turn many of them mouthed thank you to the crowd, including Victoria Pendlelton, Mighty Mo and Lee Pearson, which I thought was touching. They too seemed a little caught off guard by events. It's not in our nature, we Brits, to go over the top about things, but their achievement has given us all something to shout about. It is heartening to witness what can be done when faith and hard work are met with investment, something for us all to take away with and ponder.

Can you tax bad business? And is social enterprise good business?

Ed Miliband proposed rewards for grafters in business and not 'predators'. Photograph: Jonathan Hordle / Rex Features

Whether you think the Labour Party leader Ed Miliband, did a good job in delivering his speech yesterday to conference or not, his comments about good and bad business have sparked serious debate.

In the past, I have been worried when I hear spokespeople in our movement talk about the revolution that social enterprise represents in business practices and how casino capitalism has heard its death knell because I think that is wishful thinking and shows a detachment from the real climate of British business.

We do not have all the answers but social enterprises do have inspirational models that challenge the idea that profit is greed. And while I don't think the bulk of business leaders in the UK are looking to change their ownership models to enter the slipstream of ethical business, I do think they feel the pressure to be more accountable for how they make money as well as how they spend company profits. Good businesses are those who are careful producers who don't pollute the environment or over-extend their borrowing, but who do employ as many people as they can and invest even a fraction of their profits in acts of charity. While those that borrow against inflated assets, cut staff in favour of quick profit and make no attempt to minimise their environmental impact are the bad ones. Trying to tease out how you could tax these differing approaches is a waste of time, because no-one is ever going to do it, but if you take a step back from some of today's noise around taxing unethical behaviour and look at these ideas, you start to see, I think, what Ed was getting at.

The eminent economist, Will Hutton has been saying some critical things lately and we ignore them at our peril. He has been defending the Euro and its role in what he believes is the front line protecting sterling. Hutton says that without the Euro, each European currency would have come under attack, like a fox in the hen coup, from the uncontrolled financial markets that would have picked off currencies one by one, and if the Euro falls, they may do so yet. Even though there would be little sense to this annihilation, just as foxes will kill every chicken in the coup, we must understand it is just what they do if we let them. Hutton says governments have to recognise this behaviour and act to prevent it. This is bad business and we need to protect ourselves against it before all growth drains from society.

Ed is saying the same thing: that trusting the markets has led us to a very dangerous place and if we are to return to safer ground, we must try a new path. There have to be regulated financial markets, separated banks and significant investment to get people working, producing, saving and spending. If banks are lending, business can afford to hire more people and those who do that will contribute to the public coffers in a way that bank bonuses never will. Hutton, in his Guardian article "Our financial system has become a madhouse we need radical change" quotes and agrees with George Magnus, a senior policy adviser to investment bank UBS, when he says "No major advanced economy is doing anything to promote growth and jobs." My members are dying for lack of cash and their closure means not only increased unemployment but importantly job losses in already deprived communities.

Social enterprises try to scale the north face of business, which makes them heroic. They do the impossible and with trail blazers like Divine chocolate causing a stir in the chocolate world, they can change behaviour in even the most established markets because ethical sells. Since Divine entered the chocolate market with its story of farmer co-operatives and fair trade, suddenly all the big companies are offering fair trade products, more producers in the developing world are getting a living wage than ever before, and I can start eating Maltesers again (Mars estimates that by going Fairtrade they will boost sales by 10%).

This is how social enterprise activity changes the way markets operate and frankly we could all do with more of that. We just need those lovely banks to start lending us the money to do it with, which they will if Government makes them carry more capital, lend more to SMEs and works with the rest of the world to sort out the Euro crisis so we can all start to sleep at night. Then and only then can good businesses get on with making work and wealth creation Britain's big story.

Knowing when to bail: This isn't politics, it's bigger than that – just ask Hugh Grant

Hugh Grant: Not just a pretty face

Like everyone in the country, I am agog at what's going on. The tabloid press seem to have sunk to new lows below even those assumed of them. The police seem to be guilty of taking a discretionary approach to what is or is not illegal, based on self-interest. And it would seem that politicians have entered a Faustian pact with the Murdoch empire that has prevented anyone from getting to the bottom of how information is bought, sold and publicised in some parts of the British media. Just ask Hugh Grant, he knows all about it.

It now seems clear that Murdoch may not be allowed to buy the rest of the BSkyB but that his current holdings need to be reviewed and reduced. Even without further revelations only a nitwit would try to defend the assertion that News International will do a thorough job cleaning up its act through self-regulation or, for that matter, the Metropolitan Police should be left to its own devices. It is political suicide to trivialise the implications of this, because the public have got beyond the 'smoke without fire' stage to organising its own evacuation. The public isn't waiting for politicians to tell them what to do: Mumsnet and the Church of England are looking at a Murdoch boycott and are sufficiently well informed not to be distracted by the closure of the News of the World. The good old Guardian has become our very own Washington Post, now looked to across the world for the only unbiased coverage of this whole business.

I have a close friend who is the international editor of a well-known celebrity magazine and she has often told me of the fear the famous have of the British tabloid press, some choose never to come to the UK or leave hastily because of it. No great loss, you may think, but an interesting indicator of how the British tabloid press is in a class of its own when it comes to being out of control. Further it has always fascinated me that the worst practices of some of the media in this country are managed and exploited by non-residents who would not welcome or tolerate such intrusion in the countries they choose to live in. Having said that, my friend has often argued for the continuance of an unregulated press. So what's to do?

Ed Miliband has been accused of playing politics with this issue, I don't think that is possible. Like Watergate and the Profumo Affair, it's got beyond that now. We do need to stop the Murdoch takeover sharpish. We do need someone to stop the deleting as it is now, shredding as it was in Ollie North's day. And as David Cameron agreed, old Rebekah Brooks needs to go whether she is a 'lightning rod' or not, if only to say that if it all goes tits up on your watch, it's your responsibility.

I am amazed and, I have to say, delighted at the role Hugh Grant has played in all this. It seems following his relentless experience of being 'papped', he fought back by taking ex-News of the World journalist Paul McMullan out for a drink with a microphone pen in his pocket to record and expose the hacking, police bribery allegations and the culpability of politicians and newspaper editors and bosses as McMullan bragged that 'he [Grant] was powerless to do anything about it.' Given his extraordinary tenacity I think he should definitely play himself in the inevitable film.

It may yet turn out that Andy Coulson becomes #newsgate's Oliver North, but even going for his scalp won't keep the information, outrage and disgust coming wave upon wave now. Talking of waves, if you want to avoid a painful wipeout, the knowledgeable surfer knows when it's best to bail – a surfing term meaning jumping in the water before you lose your balance. Let's hope the PM remembers in time, that to ride the next wave, bailing is better than heading for a wipeout.

Snogging Ed Miliband

Today was a fun one.

All about Ed

This week is all about Ed Miliband and his success in the Labour leadership campaign. Although somewhat overshadowed by David’s resignation, Ed is the man everyone is talking about.

This is what I know about Ed, he is a decent bloke with whom I once joked that he was too nice to get to the top in politics, which shows what I know. He was our very first Minister for the Third Sector and set a standard no subsequent Labour Minister matched in terms of innovation, reach and growth. He is extraordinarily frank for a politician and will tell you not only what he thinks but also what he feels. When my beloved Dad died suddenly, nearly three years ago, Ed’s message of condolence said something that no one else did at the time, and it was a sentiment I actually found very helpful indeed. It was extraordinarily kind. Ed is a fan of social enterprise and it is something that he gets. He has a greater understanding of its varied implication than most, and as a politician whose ambition knows no bounds, he is likely to make use of it.

I for one am pleased with his bold approach. Given the times in which we live, the economic constraints and the boldness of Government, a gutsy opposition seems right.

I am a fan of truisms. One of my favourites is that happiness comes from small achievable tasks, the other, and one more relevant to this post, is that under pressure people revert to type. We are all under pressure now and, here’s another one, when the going gets tough the tough get going. Social enterprise like every other social and economic solution is in the market place, and it needs to be fit for purpose. Most of my members operate in the private sector and they need top notch advice to exploit their business model, a growing market and banks to lend them money to meet demand. For the majority of them the current confusion over governance is often an irrelevance and not a priority. For those public sector workers interested in social enterprise, or mutuals or coops or employee ownership its a minefield and one we need to sort out pdq.

I have said this in the Cabinet Office, at IDeA and to three local authority CEO’s this week. Public sector workers need to start with how can they build a sustainable business. Even with a fixed term public sector contract they need to be able to attract investment and maximise whatever social impact they want to achieve. That is where you start, whether that leads you to a mutual or joint venture or indeed to something that could qualify for the Social Enterprise Mark is not the defining issue, nor, in my view, should it be. This is about finding the most efficient way of delivering public services that look, smell and are experienced as the embodiment of public service ethics, but that can share management and ownership with staff and reduce current costs. In short it's bold, like the times in which we live.