Category Archives: social value

Profiteering from the sick and dying

Lucy’s latest blog explores profiteering from delivery of NHS contracts. This blog was first published on the 2degrees network, see https://www.2degreesnetwork.com/groups/2degrees-community/resources/profiteering-sick-and-dying/

At the beginning of the summer there was an announcement that Staffordshire Clinical Commissioning Group plan to contract out their cancer and end of life care to the tune of £1.2bn. By my estimation, given the profit margins of at least 10%, this is at least £120m profit taken out of care services, for shareholders (and could be as much as £240m). I suspect there will be a lot of interest from the private sector as an opportunity to get into this potentially lucrative market.

Almost in tandem with this announcement there was a Daily Mail article which reported survey results showing most people do not care who delivers NHS services as long as it’s free. On the face of this, it is discouraging news for social enterprises. However, if you were to turn this around, given the latest health and care scandals, I’m sure that trust would be the number one priority. Social enterprises with their local knowledge, approachability and transparency are very well placed to engender this. They are not some faceless corporate just after a fast buck, because their number one reason for being set up is to deliver that service to fit their social mission.

I am really encouraged that the Labour Party is now talking about ring-fencing a number of public sector contracts for social enterprise delivery, although this does miss the point that there is an inherent difference in the way that a social enterprise delivers – because of its primary social motivation. I am due to meet with Chi Onwurah and I will be making this point. At least there is recognition that social enterprises do offer a good alternative.

My prediction is that in years to come, we will all be questioning the values (or lack of them) that were used to make public spending decisions.

There must be wider recognition that social enterprises not only often take a lower profit margin, but they are also reinvesting and devising a service that is aimed at the people they serve – a win-win! Just looking at the price and not what’s going on behind the scenes is not good enough. We need commissioners and politicians to understand this fundamental point.

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Smoke, mirrors and social value

I’ve lost track of when the term social value was coined as a phrase, but maybe it’s the first time that you’ve heard it? I suspect it metamorphosed from a number of other terms such as social impact and best value, but what does it really mean? For me it’s about considering not only at the price of a product or service but the other added social and environmental benefits that might come from purchasing that service or product. For instance in buying the Big Issue you know that you are not only getting a good read but that you are mainly performing a business transaction with someone who is homeless, giving them ‘a hand up not a hand out’, so not only financially, but giving self-esteem, structure and focus to an otherwise chaotic life in the process. The Social Enterprise Mark is designed to be the short-cut for buyers to help them make these sorts of decisions which are often hard to put a figure on.

The term Social Value has become more widespread recently, because of the Public Services (Social Value) Act 2013 that was passed a year ago. It requires all public agencies to consider social value at the pre-commissioning stage of commissioning public services. However we need to look at its origins to understand why we are where we are. It was originally known as the Social Enterprise Act and was designed to require more public sector commissioners to consider buying from social enterprises because of the added social value that it could give, pound for pound.

However, as predicted in my blog Social Value Lite, 2 years ago, corporates and private businesses are now lining up to demonstrate their social value. It’s the ‘new sustainability’ or ‘new CSR’ and is a term that seems interchangeable. Whilst I do not think that social enterprise has a USP around social value, it is its central purpose.

For this reason, we as certified social enterprises, do object to being preached at regarding how to achieve social value by an increasing number of banks and businesses, which are themselves famous for anti-social business behaviour! You can’t see social value in isolation, it needs to be the sum of the parts. Social value and impact was supposed to be a way that social enterprises and others in the social sector could differentiate their business approach and now we seem to have come full circle. Professor Adrian Henriques, expert in CSR, talks about this conundrum in his blog Social Value Just a Placebo.

Social enterprises need to get much cleverer at voicing why they are socially different. If we are not careful the substantial resources of the corporates will completely marginalise us in this debate. We are already seeing a pipeline of slick ‘social value’ reports and other promotional tools which leave social enterprises standing. We need to wise up about motivations, to be less coy and sycophantic toward ‘real business’ and be proud of our place within the private sector, not begging for crumbs. I know that life is hard at the moment, but we lose this one at our peril.