“Neither a borrower nor a lender be.” Not so, says SIB

Phil Knibb overseas a church convertion to a skills training
 centre for Alt Valley Community Trust

“Neither a borrower nor a lender be,” Shakespeare tells us, but the Social Investment Business (SIB) say otherwise. At this week’s 10-year celebration of lending to social enterprises and other civil society organisations, SIB was toasting its brave and brilliant borrowers, many gathered in the room to testify to the largess of lending.

Proceedings were opened by my ebullient friend Sir Stephen Bubb, who lamented the absence of Pol Roger, but nonetheless asked us to raise our glasses of austerity wine to SIB and all it had achieved.

Stephen talked about the history of lending in the Third Sector and its growing importance and how risk-taking had not only saved some great community-based organisations, but importantly helped them to grow and compete. He introduced Phil Knibb, Director of Alt Valley Community Trust in Liverpool, where his inspiring community organisation had, through borrowing a staggering 13 times from SIB, grown to provide an astonishing range of services that included skills training and commercial farming.   

Phil gave us a growingly improbable list of community services that Alt Valley had been able to provide by borrowing, buying and building. It was a real success story and we heard about so many others all worth checking out here, in Above and beyond, a SIB publication about those investees that have successfully taken over the delivery of public services and thrived through social investment lending.

Jonathan Jenkins, CEO of SIB, followed Stephen, not an easy thing to do as he pointed out, and made reference to the recent UK Trade Mission to the US on social lending. This was picked up later by the Rt Hon Nick Hurd, Minister for Civil Society, who shared his enthusiasm and pride for the UK’s world-beating lead on social lending and its potential role to do much more. He congratulated SIB on behalf of the government and even “gave credit where credit was due” to “the other lot” for providing the funding that set it up.

I don’t think there is much doubt that investment through lending is quickly becoming the most inspired finance available to community services. For those of us promoting independent public service provision delivered by community-based organisations, at the Transition Institute, the presence in the market place of players like SIB is one of the most important conditions for success, and one I celebrate. I was delighted to bump into Heather Sim, CEO of The National Migraine Centre at the event, which was a recipient of a SIB loan that has been vital to its objective to increase medical services and achieve financial sustainability. These things are a must if we are to help those with acute suffering such as migrainers.

Congratulations to SIB and all who sail in her.

Why capital funding overshadows the debate on NHS reform

Community providers are being pushed aside as commissioners recognise only those with money, not their track record

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• Allison Ogden Newton
• Guardian Professional, Thursday 23 February 2012 15.25 GMT
• Article history

Stephen Bubb of Aveco says the NHS needs community providers with new ideas about delivering services. Photograph: Graham Turner for the Guardian

In any economy, let alone one in recession, capital is king, so it is a primary consideration when contemplating reform of public services.

As both the chief executive of Social Enterprise London and chair of theTransition Institute, which supports public services, I am an advocate of those independent providers who offer affordable, quality services with social impact and real accountability.

Today we are being asked how we stand on NHS reforms. Through the work we have done in public services and, in particular, health, we have seen some wonderful organisations offer innovative, patient-centred services on reduced budgets. To achieve this does mean acknowledging competition in the NHS.

But here is where I have a problem: almost without exception, the procurement processes that have come from government in the last 18 months have been large – and are getting larger. They have increasingly favoured those applicants with capital, lots of it. In some bidding rounds, applicants have been required to prove the existence of large capital sums or capital bonds as an essential part of the process, which excludes most if not all community-driven providers.

The innovators I refer to offer extraordinary opportunity to link motivated staff with happy patients, such as those treated by City Health Care Partnership CIC in Hull. City Health is an employee-owned service, like Central Surrey Health, that provides award-winning, community-based healthcare. I have to say both these organisations do not have the look or feel of a privatised company, but a new generation of public service, with the strongest possible public service ethic.

I read with interest Sir Stephen Bubb, chief executive of Acevo, the Association of Chief Executives of Voluntary Organisations, and a board member of the Transition Institute, whose article in the Times on Wednesday considered the NHS reforms. Bubb was a member of the Future Forum that reviewed the reforms over the summer and he attended the No 10 NHS summit on Monday.

As someone at the heart of the debate, Bubb tells us: "Almost everyone agrees we have a problem when over 70% of NHS funding is spent on treating long-term conditions, usually in the most inefficient way there is: in hospital.

"And almost everyone agrees that if the NHS is to cope with these pressures, it must shift resources towards preventative, patient-led, community-based services which treat chronic conditions far more effectively and which act to pre-empt acute crises of ill health."

He goes on to say: "Might I also suggest that the majority of observers agree that to carry out this change effectively, the NHS must allow new providers with new ideas to break the bureaucratic stranglehold on service delivery … What frustrates many of my members, the leaders of the country's charities and social enterprises, is that, despite the consensus on both problems and solutions, the debate over reform focuses on the phantom of 'privatisation'."

All of us on the front lines of community service share Bubb's belief that, with a fair crack at the whip, we could make a real contribution, but to do that a number of things have to change.

I don't think this is a debate about whether to privatise or not: the NHS has always been a mixed model and will continue to be so. No, this is about big versus small or, more specifically and sadly, this is about financial versus social capital.

Most of the members Bubb is referring to have a great track record but limited access to capital. Like Social Enterprise London members and those approaching the Transition Institute, they are finding it harder and harder to succeed in a commissioning process that pits them against companies which don't have the track record but do have the cash.

The principle of this debate is clear: everyone wants universal, quality healthcare, free at the point of use, but the means to achieving that are bound to be complex, even if money wasn't so tight. The Transition Institute thinks it has part of the answer in that we can supply willing providers of quality, community-driven service solutions. All government has to do is procure those services and look for capital elsewhere.

Allison Ogden Newton is chief executive of Social Enterprise London

• ITSNEVERDULLINULL

  23 February 2012 7:48PM
  Thank you Allison for this insighttful and appropriate article, the point about the difference between organisations for profit and those for 'better profit' is not at this point in time distinguished in procurement processes across the public sector neither does the process of supporting such staff lead organisation bear the fruits of their committement - it is true that this government sits on the most exciting opportunity to release with proper support the potential drive and enthusiasm of it public sector workers.

  However in health and other sectors it needs to get the credibility and buy in from staff, they need action and many very interesting developments could be on the way that may support this move but they need supporting and that means finance.

  They may need to understand that unions still may not understand that by creating co ownership in its wider sense is not that appealing whilst understanding that such things as large capital bonds to even bid for work are just not feasible nor are they needed with the stringent processes already wrapped around floatation.

  To allow large corpoarte accountancy firms to set the bar based on such developments as the Foundation Trust accreditation proces at this stage of social business development are and is restrictive. The failure regimen is simple not some big test nor given choice of form does it seem that complex - the next concern a bond to enter the market - for sure it's on it's way more money out of front line delivery to support failed for profit organisation like those who have made money out of cosmetic surgery , great !!!!
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• IanGreener

  24 February 2012 12:56PM
  Thank you Allison, this is a thoughtful piece. I think you reach the right diagnosis, but I'm not sure I entirely agree with your solution.

  I think it is clear that there is a consensus that we need more community-based services to prevent un-necessary hospital admissions, to treat patients more appropriately.

  I will also agree that in order to foster innovation, we need new community-based organisations to work with the NHS as it requires fresh perspectives and new ways of doing things to find new answers.

  However, I disagree that competition is necessary to achieve this. I also have concerns about the NHS relying on non-public provision for the long-term delivery of services.

  It isn't necessary for new organisations providing care for the NHS to be competing with other providers of care. We can do this just as we co-operatively. The NHS can buy care from social enterprises and other non-public bodies without the need for them to be competing with one another. I have no problems with the idea of such services being commissioned, and their impact and effects evaluated through careful research. I'm not sure what the gains from getting social enterprises to compete would be, and think a research-driven approach, for a change, would be a positive way forward.

  Equally it seems to me to be unwise, either for social enterprises or the NHS, for non-public providers to become dependent on public funding. It's a bad idea for the NHS in case those providers run into financial difficulties, and which will result either in them having to be bailed out by the government, or patients face the disruption of having to be reallocated to other providers, possibly in systems which don't have the spare capacity to support them.

  It also seems like a bad idea for social enterprises to become dependent on public funding - their vibrancy is surely based on being able to be sustainable without becoming dependent on the state. If social enterprises are dependent on the state for financing, they might as well be public bodies. The private health sector is, I read, already getting 25% of its revenues from the public purse, so effectively sustained by it. That doesn't strike me as being healthy for either public funders or private companies, and repeating the error with social enterprises would be short-sighted.

  My suggestion then would be a more research-driven approach - asking social enterprises to provide services to the NHS which would be evaluated, and if successful, rolled out across the system, but funded publicly. There is no intrinsic reason why public funding should prevent innovation - that's about good management, and there's no intrinsic reason why good management only exits outside the public sector.
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• janeiwheeler

  24 February 2012 1:53PM
  Alison this is a really interesting article - and our observations would echo yours, namely that current procurement processes pose significant challenges for smaller organisations wishing to retain their services, or expand into new areas.

  We identified this trend not solely in the realm of community services - although over the last year these are the largest contracts that have been procured and so the issue is perhaps more pronounced in this realm.

  Working with Social Entreprises, private companies and the NHS we also believe that this trend isn't just apparent in the independent sector but also within the NHS. Smaller Trusts and Mental Health Trusts are struggling to show the organisational capacity and capability that commissioners require

  It is also worth mentioning, as I'm sure you would recognise, that smaller organisations (which may have local advantages and be strong on innovation) face other barriers than their financial strength or backing. Whilst an organisation may have a great track record of service delivery, frequently the scoring within a procurement will place at least as much weight on track record of managing a transition from an existing provider or implementation of a new service. For a smaller organisation a large scale procurement/mobilisation for either their own core business, or for another local service may well be one of their first experiences of a procurement of this magnitude. Their ability to demonstrate to commissioners the organisational capacity to undertake a complex transfer of staff, due diligence process, IT systems change etc, all whilst achieving tough financial savings can place doubts in assessors mind. Bear in mind that most large organisations undertake this process regularly and can easily draw on recent relevant experience .

  It will be interesting to see how current trends to centralise and procure larger and larger services (for example at cluster level rather than PCT - eg with Out of Hours and 111) will help or hinder the ability of smaller organisations, across all sectors, to be assessed as credible providers alongside their larger competitors.

  We wrote about our observations here:

  http://damsonhealth.com/archives/255
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  richardblogger

  24 February 2012 10:49PM

  ...on reduced budgets. To achieve this does mean acknowledging competition in the NHS.

  That is economically innumerate. You cannot say that reduced budgets mean that you have to have competition, in fact, reduced budgets mean that you should *collaborate* more. Competition by default means there has to be excess capacity, and that can only be achieved in times of plenty.

  which excludes most if not all community-driven providers.

  Well, that may be because the existing providers are *competing* perhaps if you learned to *collaborate* then you may share some of the funds. For example, my local hospital collaborates with Macmillan. The hospital have recently built a new ambulatory cancer unit and there are facilities for Macmillan in this new building - it is the base for their nurses locally. This makes sense because patients who receive treatment in the unit will be cared at home by the Macmillan nurses. This is joined up, collaborative services. It is a great shame that this nasty, pig-headed government cannot see that collaboration works and is far more powerful than competition at delivering high quality integrated services.

  Bubb tells us: "Almost everyone agrees we have a problem when over 70% of NHS funding is spent on treating long-term conditions, usually in the most inefficient way there is: in hospital.

  In fact this is an evidence-free statement. Many health economists say that care in the community will NOT save money. The proper question to ask is what is the best for patients (amazing, isn't it, that Sir Steve Bubb thinks of money first, and patients second? It kinda sums him up). There is evidence that care in people's homes is better for patients and that they recover quicker. It may cost more, but does that matter if it is better for the patient? However, bear this in mind. If a patient is discharged too early from hospital and into "community care" they may be more likely to be re-admitted and so cost more. So Care in the community should not be seen as a replacement for much of the care in hospitals, it should be regarded as an integrated part of the whole pathway. But integration requires collaboration, and we get back to where I started...
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Why Social Value Ethos and its doers matter

Introducing Sir Stephen Bubb and Nick Hurd. Photos Max Miansarow

Published by the Transition Institute

This week the Transition Institute (TI), which I have the privilege to chair, launched its first research document, Social value ethos. This piece comes firmly from the TI philosophy that it is possible to increase social value in the implementation of new forms of public service.

Working in partnership with Nesta, the champion of innovation, and many other leading organisations active in the space of public service outsourcing or spin-outs, the TI is providing the framework to debate and produce evidence such as we see in Social value ethos. Key players in the TI are those that share the view that social value can be optimised in public service through such means as employee ownership, social entrepreneurialism and mutualism. They are Co-ops UK, the Employee Ownership Association, Local Partnerships, Social Enterprise UK, 2020 Public Service Hub the Office for Public Management, our old friends, ACEVO, and many, many more.

This well-organised event (thanks to the wonderful TI team member Jillian Oxenham), was held in the successful spin-out GLL, in fact, ironically in one of their spinning rooms, where we had some stunning contributions from our expert panel, ably orchestrated by TI interim Director, Dominic Potter. Our panel all featured in the case studies in Social value ethos; they are Siobhan Clarke  of Your Healthcare, Andrew Burnell, City Health Care Partnership CIC and Brendan O'Keefe from the Royal Borough of Kensington and Chelsea Youth Services, supported by Sabina Khan, Director of Policy and Research at SEL and the lead author of the research. The panel described the way in which they tackled the challenge of change, the importance of staff engagement, the added social value they had achieved and why that was important, and the need they all had for more support and information at the time of transformation. The report has been well received with some great comments from, among other social commentators, Cause4, read here.

Another successful public sector spin-out, NAViGO led by Kevin Bond, was also featured as a case study in the research and I am delighted to say subsequently won the Guardian Public Service overall award later on in the week at the Gala dinner held at the InterContinental and which I attended.

Andrew and Brendan tell it like it is

At the launch we heard from Sir Stephen Bubb of ACEVO, and the famous Bubb Blog, who made some really interesting points about the current imperative for new forms of public sector delivery. One thing he remarked on which really struck me was the contrast between the approaches of Blair and Cameron. Blair really liked the idea of independent service delivery, to the point of introducing well funded programmes like the Social Enterprise Investment Fund to support their growth, for him it remained all about improving standards of management. While for Cameron, it is all about community engagement and making a more meaningful connection between service providers and consumers. This really rang true for me and made me wonder what we could achieve if that second vision was underpinned by the kind of investment that systemic change received from the last government.

Then Minister Nick Hurd arrived to swing the proverbial champagne bottle at Social value ethos and in launching it he declared his support for the TI and all who sailed in her. He said some very nice things about me, which modesty dictates I may not repeat, but I liked the bit about being a doer.

When I was a little girl I agreed with my Mum to clear out a corner cabinet in our playroom. Coming home and finding I had done no such thing she wasn't cross, just aghast. She explained her reaction by saying, "But you always do what you say you're going to!" And so it has always been, a doer like our valiant public sector trailblazers, nice of Nick to notice.

Social value ethos delegates including the fantastic Siobhan Clarke (centre)

Tweeting about the riots @NCVO

Riot police charge past burning buildings on a residential street in Croydon: Guardian

Yesterday I went to a summit at SEL member, Rich Mix in Bethnal Green organised by NCVO to analyse the riots. It was the kind of edgy, gritty  debate I hadn't participated in for some time, and you didn't know which way the room was going to go. NCVO had invited over 100 people, which meant that those working at grass roots level were there to talk about what they understood to be happening in communities. Restricted access to the mike usually means the big guns don't turn up, but in the audience and participating at the roundtable discussion panels we had Stephen Bubb, CEO at ACEVO, the Minister for Civil Society, Nick Hurd, and members of the cross-party Riots Panel. I sat next to Stephen, which is always interesting as his views, like those of Stuart Etherington who opened and closed the event, are those commonly heard in Whitehall.

On my table I really enjoyed talking to @AndreHackett a graduate of the School for Social Entrepreneurs who had founded We Make a Change, an interesting organisation that connects communities with people who need to hear from them. I asked Andre the question that was bothering me: were the rioters in fact different groups operating as a mass? When the riots occurred it seemed to me that rioters fell into two groups, those who were angry, with a statement to make, and those who were just there to nick stuff. Given some saw themselves very clearly in one group and not the other and others had begun in one group but shape shifted in the electricity to the other, it was hard to analyse the motivation of the rioters as a single entity. I asked Andre about this as he had been working directly with those who rioted before and after the event, and he agreed. This idea that community is in fact a diverse group of opposing interests even in the manifestation of their rioting was echoed in Stephen's recent blog.

Both men argued, as I did, that young people need the hope of jobs in the communities in which they live. The lack of jobs for young people is a national crisis and one that will end, regardless of punitive action, with people out on the streets again and more worryingly slipping between society's cracks, disappearing without trace. A critical point made by one contributor was that young people are a resource, not a problem, this for me is the point of the exercise. There was a collective call for a young people's employment programme to sit alongside the work programme, which sounded a lot like the Future Jobs Fund. I know I bang on about the Future Jobs Fund, but it did work, the 500 young people we helped to get into work could have been 2,000 if we had been allowed to carry on, and we were just one provider, this is important and worth serious consideration. Yesterday it was announced that a further 77,000 young people had signed on since July. Getting them into jobs is the place to start to avoid future riots and further economic decline. But that takes enterprise - social enterprise if you ask me as the businesses that will be offering jobs to kids with limited qualifications and zero experience, in the places they live, will be social enterprises like Livity in Brixton that worked with over 1,000 kids last year.

This is clearly a hot topic as the twitter stream from the event,  has continued at least in my tweet world. We don't have quick answers but I do think we are getting there in the spirit of community, by working together.