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.

Can social impact really be measured? Really?

Can social impact really be measured?

I've been thinking about Rob Edwards' comment on my last blog and have decided it deserves a blog of its own. In his response Rob, reflecting on Magic Breakfast's call for investment of £13 million in a social impact bond that offers £28 million in savings from the additional Government expenditure needed to address the social problems of children too hungry to learn, Rob said, "This is the whole problem with social enterprise. The returns can be somewhat ephemeral, and an awful lot of time and money goes into setting up organisations rather than actually delivering services that people want."


Is this the case? Is measuring social impact ephemeral and therefore too academic to bring into a discussion about investment? Can social enterprises miss the point and make an offer that is not really what people want?


Clearly some people think so and if we are to make any real progress, we have to address these criticisms, and not just by refuting them from the vantage point of the moral high ground, but by generating the data that proves our services are needed and our social return has been critically assessed and properly measured.  


Just after the election I had a meeting with the man put in charge of regeneration in a major Government department, he asked me, "How do we create regeneration and cut spending?"

I advised introducing social impact assessment across the whole department and insisting that the impact of cuts were assessed for their wider social impact and concomitant cost before decisions are made about what stays and what goes. Needless to say he didn't, or couldn't, follow my advice, but I am sticking to my guns, because despite a slow start, members of the Government namely, Nick, Hurd, Francis Maude, Ken Clarke, George Osborne and the Prime Minister himself have shown growing enthusiasm for social impact bonds making this an ideal time to take out the tape measure.


I do appreciate this is not easy. When I started looking into impact measurement I too was baffled and because I found it tough, I made sure SEL had the brains to work it out with people on the team like Ali Somers who devised the first social value balance score card and went on to head up the social impact unit at Goldsmiths. Also, Sabina Khan came to us from the impact assessment team in Lehman Brothers in New York and has since founded the world's leading Social Enterprise Journal, developed  SEL's SIMPLE programme – our how-to guide to assessing which tool is right for you – and launched our fantastically popular Introduction to social impact assessment training. Because SEL has been developing tools with real social enterprises working on the ground, often in the most difficult circumstances, we have come up with solutions that work for busy social entrepreneurs not just academic exercises. The goal has been to move social enterprise from being characterised as warm, fuzzy charity to one where hard evidence shows how it really works.


As times get tougher, the clamour for evidence will get louder. Occupying the moral high ground with its stunning views no longer guarantees any of us a future. Being able to produce data about the exact cost of your product or service and measure its impact will give you future contracts, boost your bottom line and ensure you offer services that, as Rob recommends, "people want". I know because we have done it at SEL and it really, really works, honest Rob.

Big society is here to stay and it's time to get used to it: Guardian Public 09.03.11

Photo: Murdo Macleod

Despite opposition from both the left and right on the political spectrum, and a wealth of criticism from civil society leaders, there are reasons why the "big society" is here to stay.

Big Society - no money, no comment

Oh its all about the Big Society this week. This morning I have thoroughly enjoyed watching my friend Sir Stephen Bubb hurtling around the news TV studios this morning, keeping his end up ...

Public service reform: Silk purse or sow's ear?

At last week’s launch of the Mutuals Information Service, a sign poster for staff in the public sector interested in setting up staff-owned mutuals, or co-ops, Secretary of State for the Cabinet Office, Francis Maude said some interesting and alarming things.

I wasn’t there, but at the launch of this great service, put together in partnership between the Cabinet Office, Local Partnerships, Employee Ownership Association and Co-operatives UK, some participants came away with a growing sense of disquiet. Listening to the SEL Board, made up of 17 of some of the country’s leading social entrepreneurs, as they recalled the speech and debated its contents, I was struck by how seminal his words were. Out of my board’s animated discussion 3 key concerns have emerged, these deal breakers are pensions, OJEU requirements (Official Journal of the European Union) and contract length.

I understand the general theme of the address was to call for more independent providers in the delivery of public services that embrace the values of the mutual and social enterprise movement, so anyone listening would have been forgiven for thinking our fortunes would go up in the world and we have the support of Government in creating a growing social enterprise sector across public services. However in the content eyebrows were raised as obstacles were thrown into the paths of those that we hope choose to follow the footsteps of GLL and recent No 10 Big Society award winner, Central Surrey Health.

In the matter of pensions the Secretary of State said that this was an ongoing issue so he felt that little could be resolved around it just yet. Pensions and the legalities and financial implications of their transference are a mine field. Public sector pensions vary from local to central government, and the models used by the services that have already spun out of the public sector vary in terms as well. The one thing all successful spin outs share is their ability to continue to offer a state pension to all existing employees, and in some instances even new recruits. Without this reassurance staff will quite rightly question the extent of their vulnerability in any proposed new management model. We need clarity on this and something more attractive to offer staff putting their future on the line and we need it fast.

Secondly the Secretary of State talked about OJEU extension for a limited time mentioning the three year term in vogue for health contracts at the moment. There are 2 issues here, firstly the OJEU exemption. For those of you not immersed in procurement, OJEU is the Official Journal of the European Union where all contracts that are deemed eligible for Europe-wide procurement are advertised. This means that after the initial contract length any and all comers, Europe-wide, will be pitched against you. Not a prospect most public sector workers developing their business model and experimenting with the idea of entrepreneurialism will relish. You cannot sidestep OJEU but you can extend the initial contract length to give newbie’s time to get their act together. Otherwise its social enterprise for three years and the private sector thereafter.

Which brings me to the final killer issue, that of short contracts. As Mark Sesnan, Managing Director of one of the UK’s largest social enterprises and SEL co Chair said “The private sector wouldn’t cross the road for a 3 year contract”. In order to capitalise your business and give the new entity time to innovate, consolidate, and grow, Mark and other leaders like him are calling for minimum contracts of 5 to 7 years. These are the lengths of contract that should be encouraged. Not such a big ask if you consider that 15 to 25 year contracts are still common for the private sector delivering public services. Who can forget the school meals debacle when social entrepreneur Jamie Oliver exposed unhealthy school meal providers only to find out that with their 25 year contracts, nothing could be done about them for a very, very long time.

We were encouraged to hear the Minister talking of the “Right to provide,” as he did at the recent Guardian Social Enterprise Conference. This seems to resemble the right to request which was exclusive to health, and extend the offer throughout the rest of Government.

The broadening of the principle that encourages staff who want to set up as standalone providers under the mutual and social enterprise principles, and support for initiatives like the Mutuals Information Service and SEL’s Transitions document that gives prospective entrepreneurs advice and guidance, is all very welcome. But you can’t make a silk purse out of a sow’s ear, and you can’t expect public sector workers to invest their personal capital into new service models without even a cash-strapped Government meeting them half way.

Family, friends and other animals

My Mother rang this morning with sad news. A very close member of the family, my Father's life long friend, John Hughes, died last night. John and his family were always a part of our lives and both he and his friendship with Dad were legendary. They were both characters that lived life to the full. John was the local vet, my dad the GP and their kindly ministries just about covered the needs of the village. When I was about Katie’s age, I remember them staying up all night to attend to my guinea pigs that had been attacked by the neighbour’s dog. This was, of course, the perfect excuse for them to drink all night, but when I awoke in the morning to news of Posy’s death (Rosie made it), having them both there made all the difference. Funnily enough I was thinking about John last night whilst listening to my friend Stephen Bubb, of acevo and Martin Brookes of New Pilanthropy Capital, slugging it out on Radio 4. Martin reckoned people should make moral judgements about how they give their money with children taking precedence, over say, ballet. Stephen talked of his 98 year old Auntie, fond of giving to animal charities, who would take a very dim view of being lectured to do otherwise. I thought of Val, John’s lovely wife who died 4 years ago and who requested that instead of flowers we all gave to her favourite donkey sanctuary. John and Val really loved animals, living in a veritable Noah’s Ark for most of their lives. Each to their own ehh?

The dreary thing about age is the accumulation of goodbye’s in contrast to the diminishing hello's. This process is supposed to make us wiser and kinder but it doesn’t alway work. Listening to people talk of the Big Society or the Good Society, I think of my upbringing. My father, Dr Bill Ogden dedicated his whole life to public service. As a GP he was not brilliantly well paid and worked extraordinarily long hours, doing night duty for the majority of his 50 year career. He was still doing visits on the day he died, aged 76. The services he provided included over 1000 homebirths, helping those less able to keep up with their paper work so that they could maintain independent lives, performing minor operations at the local cottage hospital and always, always taking responsibility. In retirement he moved to an urban London practice to teach, which he loved, but he did not agree with the increasingly risk averse culture that saw GP’s referring minor ops, like ingrown toenails, and felt that the move away from GP home visits increased the distance between doctor and patient.

I wonder what Dad would make of social enterprise in health care? I think he would like it as he preferred models that prioritised responsibility and enabled medical practitioners to make real connections to patients. Today we have a really good piece in Social Enterprise with Francis Maude Minister to the Cabinet Office visiting Central Surrey Health. They are a great social enterprise who have innovated health care and offer a cost effective service. Francis is quoted as saying he wants to see the majority of health services delivered in that way in 10 to 15 years time and if the Government can support the transition so that neither patients nor staff lose out, (pensions, commissioning etc) I think he may get his wish.

Our latest contribution to this debate is Transitions, which as Third Sector reports this week is flying out the door with over 4000 going out and agencies like the National Audit Office loading it up to their data base. I am off now to meet yet another local authority CEO, my 3rd this week, to look at Transitions and see where they can use it within the council strategy to meet the demands of austerity and outsourcing. Some think we are advocating privatisation and I am quite clear that we are not. At present local authorities have two stark choices, cut and kill or privatise. The social enterprise lobby are offering a third possibility, that of outsourcing to a staff led/owned entity that maximises social value, looks and feels like a public service but offers value for money and a significant degree of mutual independence. I think of Dad, pouring John a scotch just about now, and I think he’d approve.

Francis Maude up next

So Francis, who in a Tory Government would be our Secretary of State has reiterated his Chancellor's comments. The things that struck me are first he is sceptical about Total Place, secondly that as a sector we have suffered from Government sponsored 'innovation-itis' and lastly (and from my point of view extremely interestingly) that if social entrepreneurs can do it better and cheaper than Government then they should get the opportunity to do so.