Social enterprises are increasingly joining forces with other public and private organisations to deliver all types of services to their communities. Sarah Irving talks to Nigel Spencer of N’Gage about the advantages and possible pitfalls of forming partnerships.

The social enterprise sector is full of small organisations performing specialist functions and filling important niches in service provision in sectors ranging from mental health to waste recycling. But with increased government and public interest in social enterprise models, some organisations are being called upon to take on much larger and more challenging projects. According to one expanding enterprise in Manchester, forming partnerships with organisations from the public or private sectors could be the way to meet such challenges.

The Manchester Assertive Outreach programme, which offers support and care to people with mental health needs in Manchester, is one such organisation. It is run by HARP, a pioneering advocacy and support project founded in Hulme in 1989, in conjunction with the NHS’s Manchester Mental Health and Social Care Trust.

According to Nigel Spencer, team manager at the N’Gage Assertive Outreach service, a well-run partnership can offer the best of both worlds. “Different organisations can offer different skills and experiences,” as he describes in relation to his own work. “The voluntary sector is seen by many mental health service users as less threatening and more approachable. The statutory sector – the NHS and social services – can, for them, be associated with getting sectioned and with feelings of fear and mistrust, so it starts off in a position of weakness when talking to hard-to engage, marginalised mental health service users. The voluntary sector is already at one step removed from the ‘official’ psychiatric ‘industry.’ So we can offer skills in social inclusion and engagement, and the NHS can offer clinical expertise, and both can be kept within the same team.”

In response to charges that programmes such as N’Gage represent ‘creeping privatisation’ of the NHS, he emphasises that he sees no natural place for profitmaking companies in community mental health provision, but defends the role of community not-for-profit organisations like HARP, which built up its reputation in mental health care provision over many years.

Spencer admits that some still see the voluntary sector as the NHS’ “poor relation,” and object to non-statutory organisations “muscling in” on NHS responsibilities. But, he points out, “there are some very good voluntary services which have grown up to address gaps in statutory provision. The statutory sector has taken a long time to catch up with voluntary sector in areas such as assertive outreach, which was brought to the UK from the US by voluntary organisations. The voluntary sector has in some ways still got the edge on the statutory sector because collaborative, inclusive ways of working come from them in the first place.”

As well as offering benefits for service users, Spencer also identifies advantages for staff and organisations in developing partnership arrangements. Keeping clinical provision within the Trust means that experienced NHS nurses can remain within the public sector pension scheme and retain other workplace benefits which, he admits, the voluntary and social enterprise sector is unable to offer them. And on an organisation level, he says, “the statutory sector has a stronger record in areas such as governance and risk management.” On the other hand, voluntary sector organisations have something to teach the NHS about staff-management relationships and breaking down rigid hierarchies between managers and frontline workers. The Board which runs N’Gage has been carefully crafted to make sure that staff and those in managerial roles are both represented, and that views from the different levels are fed into decision-making processes. It includes the managers of the three assertive outreach teams, service managers from both the NHS Trust and HARP, representatives of funding organisations and a range of experts in areas such as finance or human resources, co-opted on an ad hoc basis, according to need. Decision-making is by consensus, or if necessary by majority vote, and remains as democratic as possible, and there are also plans to train and support service users to join the Board.

Nigel Spencer emphasises the importance of balance for such a relationship. “The principle of equal partnership is key,” he stresses. “The service is not managed from the head office of one organisation or the other, but from a joint body with staff and managers from both groups. In this kind of relationship there is always the danger of the larger statutory body swallowing up the smaller voluntary sector one, but having a mixed board like this creates some distance, which is really important for maintaining independence.” The partnership model, with its innovative management style, is one which Spencer and his colleagues have developed over their years of delivering services. When the Department of Health decided in 2001 that assertive outreach teams should be a feature of mental health provision throughout the country, HARP was one of a small number of providers already working in the field of mental health provision which took on public contracts. But 6 years’ experience suggested to both HARP and the NHS Trust that some parts of their provision would be improved by bringing in NHS staff and skills to complement those of the voluntary sector, and HARP approached the Trust with the idea of setting up a more formal partnership.

Spencer is cautiously optimistic about the new relationship. Although N’Gage has been offering assertive outreach services in Manchester for 6 years, and successfully bid for an expanded contract in 2006, the partnership approach it is now pioneering is a work in progress. The Trust “appears nervous about aspects of partnership working,” he admits, and stresses the need for “a lot of self-analysis and reflection” by both organisations in coming years. But, he says, the model is “very exciting,” and includes plans to develop an evidence base for the use of such partnerships in delivering mental health services.

Nigel Spencer sees the example of the N’Gage partnership between HARP and the NHS Trust as having useful lessons for other social enterprises in similar circumstances. “The most important thing is that it’s the right organisations working together,” he says. “There is nothing to be gained from putting random organisations together, just because they want to work in the same area. You need to have the right skills, ethos and history.” He cites N’Gage and HARP as a good example of this principle. “HARP has grown, but it has never tried to empirebuild. It’s always stayed within its original remit of working with hard-to-engage people. That’s what it’s good at, whether it’s working with young refugees and asylum seekers with mental health needs, or running a community cafe which benefits both people in the surrounding areas and the mental health service users getting skills and experience by working there. So we have a good reputation and expertise in this area, but we wouldn’t start trying to expand into non-mental health services, just because there was an opportunity to partner up with a statutory body.”

But, he emphasises, working with larger organisations from other sectors could apply to many other social enterprises. This applies particularly to areas such as environmental services or transport where close relationships with local government are common. “Working in partnerships,” he says, “offers small voluntary organisations and social enterprises the opportunity to take on bigger projects than they could do alone, and to introduce new mixes of skills and experiences in to their work. We’ve made it core to our approach, and it could be the way forward for many social enterprises.”

For more comment by Nigel Spencer on opposition to the role of social enterprises in mental health provision, see his comments in relation to article "in sickness and in health"

For more information on N’Gage, contact:

Nigel Spencer, Team Leader, N’Gage Assertive Outreach Team, 136 St Werburghs Rd. Chorlton. Manchester. M21 8UQ. Tel: 0845 0068999

For a range of resources and links on partnership working in social enterprises, see http://www.train2000.org.uk/about/working-in-partnership.html

Useful information on how forming Limited Liability Partnerships can be a useful tool for social enterprises can be found at:

www.opencapital.net/papers/ 2amase%20LLP%20Article%20311006.doc

With funding, staffing and morale in the NHS regularly in the headlines, the government is promoting social enterprise as one answer to current challenges.

In this special feature, Enterprising looks at the situation for social enterprises, hears from enthusiastic new organisations providing health and social care services in Greater Manchester, and talks to a sceptic who sees social enterprises as bringing ‘soft privatisation’ of the NHS.

During 2006 the Department of Health announced the establishment of its Social Enterprise Unit to, according to health minister Patricia Hewitt, “act as a catalyst for change, providing a ‘hub’ of ideas, energy and support for existing and emerging social enterprises.”

The Unit is part of a wider strategy by the government to encourage development of social enterprises providing health and social care services. Hewitt stated in spring 2006 that: “There is no doubt at all that the potential of co-operatives and social enterprise is very firmly on the Prime Minister’s radar screen. And the potential, in particular, of social enterprise to contribute both to our public service reform agenda and to neighbourhood renewal and regeneration is very well understood at the top of Government.”
She went on to claim that: “even though social enterprises might not be organised as worker or customer controlled businesses, social enterprises are close to those they serve, and respect those with whom they work. And in many cases, those whom they serve are also those whom they employ. In spirit, they are close to the principle of democratic member control.”

For some, such as the social enterprises who describe their new roles on the next page, this is good news. Support for social enterprises – from business advice to a new credibility in NHS commissioning – has inspired the foundation of new social enterprise organisations, and increasing numbers of practitioners, from frontline dentists and nurses to support roles such as patient opinion researchers, are exploring models such as co-operative working and Community Interest Companies.

Despite political enthusiasm, there has also been scepticism from some quarters. NHS campaigner and psychiatric nurse Karen Reissman explains overleaf why she sees social enterprises as just another part of covert government attempts to privatise the health service.

An experienced worker, who did not want to be named, also expressed reservations. “My experiences and ongoing battles at various North-West social enterprises to get our work funded make me very sceptical about even the possibility of social enterprise. I am just not sure it can be done. Mostly social enterprises are forced to think big because they are still living in the mainstream capitalist arena.”
Organisations representing healthcare workers have given varying reactions. The UNISON union, one of the country’s largest, which represents large numbers of health workers and auxiliary staff, is running a major national campaign against any move of NHS services to the private sector.

The Royal College of Nurses, meanwhile, has given a more nuanced approach, welcoming some opportunities for flexibility and autonomy for health professionals, but questioning the Department of Health’s more gung-ho assertions:
“Whilst the government appear to consider community interest companies as a convenient, sustainable and alternative means to provide public services and overcome deficits, there is no evidence to suggest that CICs in themselves can achieve that outcome,” commented a RCN document, going on to say more broadly of social enterprises that: “no evaluation has been undertaken to substantiate the Department of Health’s view, neither has an analysis been undertaken regarding how best to use the new employment and service options recently created in the NHS and Local Authorities. Nonetheless, the White Paper recommends utilising partnership arrangements and contractual flexibilities already available as a means of establishing new “community care” integrated services.”

Priority, the RCN argues, has to be given to continued development and maintenance of employment standards for nurses and other health professionals, and it questions whether social enterprises can always be depended on to guarantee that staff are well-trained and in stable employment. Karen Reissman argues that they can’t, while supporters of the developments feel that employee ownership or membership offers new opportunities for both staff and patients. If current trends continue, many more social enterprises in the North-West will be joining CHAP, the Big Life Company and BlueSci in finding out.

Since its launch, the new legal model for social enterprise, the Community Interest Company (CIC), has attracted much attention and support. This is perhaps due in so small part to its asset lock – although not unique to the CIC structure, it is the most publicly visible; and on that basis, many have come to acknowledge the CIC as a valuable model for social enterprises to badge and identify themselves as such in their marketplaces.

Many variants within the CIC have now emerged, as social enterprises have sought to ‘tweak’ the model to best fit and reflect their particular structures and focuses.
However, certain aspects of a CIC remain mandatory and must be adopted and enforced in order for an enterprise to be awarded CIC status.
It is with regard to some of these mandatory requirements, and the regulatory powers that CICs subject themselves to, that I have become increasingly concerned as I see many groups seeking to become CICs without appreciating or realising their implications.

In the absence of an overarching legal definition, co-ops and social enterprises are identified by their values and how they enact those values. It therefore seems vital that their chosen legal structure enable them to protect these, but within the CIC ‘rule book’, I feel that there lurk some hidden dangers…in particular:

1)The requirement that the chair have a second vote in the case of hung decisions
This not only brings into question how well a co-operatively structured social enterprise would be able to enact their value of equality, but also that of solidarity - surely better that decisions be carried with a consensus majority vote? If a decision is contentious enough to evenly split opinion, then forcing it through on the say of one member risks a future spilt in the governance of that enterprise.

2)The requirement that 'a director who is an alternative director shall be entitled in the absence of his appointer to a separate vote on behalf of his appointer in additional to his own vote'
This further allows for an unequal balance of voting rights, but additionally allows for some directors to vote on behalf of others in their absence - in allowing the potential for such an environment, directors who are not present at meetings may be supporting or opposing motions that they have no knowledge of.
This is not only an even greater risk to the good governance of that enterprise, but also allows for a removal and contradiction of self-responsibility; if another director may vote on your behalf, why should you bother taking the interest or responsibility of being involved in the management of that enterprise?

These clauses (chairs vote, alternate directors)are listed in the model CIC memorandum and articles of association, and from experience, attempts to change or remove them from an applying enterprise leads to the application being deferred with a request that they be re-inserted.

But the regulators' powers raise further concerns:

3) additional key co-op values of independence & autonomy - not only can the regulator remove and appoint the directors of their own choosing to a CIC, this power extends to management (so you could end up with people running the co-op at all levels who aren't members of it, and the members not being able to do anything about this) and includes a power to impose restrictions on trading activities and the bringing of civil proceedings in the name of the CIC

4) democratic member control - the regular can do all these things (and more) without the need to consult with the existing members or wider community...

For some social enterprises, they’re aware of this ‘small print’ and its implications, but are clear that the CIC is the right model for them, and to those I wish all the luck in the world. But many advisers and enterprises aren’t aware of these clauses or the implications that they may be compromising their values that they hold so dear in defining themselves.

What I've not been able to acheive yet is finding a co-op CIC (or other co-op support body) who can help me to understand how they've reconciled these apparent conflicts between legislation and the values that define them - in effect, as I see it at the moment, a co-op that adopts CIC status has to accept that it cannot protect its identity as a co-op, nor enshire that values that define it...In particular, the values of:
- equality
- democracy
- solidarity
- self responsibility
- independence and autonomy

answers on a postcard..?

The question we set out to address within our research project: Ethnographies of the Social Economy: Practices in Place is a simple one. What can be learnt by examining the relationships between, on one hand, personal experiences of the social economy – the stories, views, feelings and expectations of those involved within ‘socially enterprising activities’ – and wider perceptions of the form and role of social enterprises, promoted by: social enterprises themselves, their promoters and supporters, and representatives of the local and national state?

Dr Chris Hewson

How do these personal and interpersonal experiences speak of success and failure, both within individual enterprises, as well as around the myriad prescriptive policies targeted at the social economy? Or more simply still… why might it be important to research and evaluate the ‘social’ within the social economy?

There have been many debates around definitions of ‘the social economy’ in general, and ‘social enterprise’ specifically. These debates are important, because the elements that are either included or excluded, both politically and in actuality, each have a bearing on the continued viability and visibility of a large number of organisations.

However, these discussions too frequently look at how the social economy should be shaped, and what social enterprise is for. Whilst the latter should not be dismissed – as successful enterprises generally require clear objectives, potential users and customers, and some form of strategic planning – there tends to be a tendency to overlook the emergence of important, and socially valuable, forms of relationship and practice within the wider social economy.

The theme which highlights this issue most is the common suggestion that ‘business practice’ and ‘social mission’ will at certain points be locked into a relationship of incommensurability. This means that at certain times one must inevitably trump or compromise the other.

This is true to the extent that business practices, as currently constituted and normalised, might well clash with the hybrid ‘business-like’ models promoted by specific social enterprises.
We might also consider the increasing malleability of the term ‘entrepreneurial’, now viewed as including the reinvestment of more than simply financial or physical capital. What this actually suggests is a growing realisation that the realities of relationships, practices and life-courses within the social economy are invariably much more disorganised than those within the formal economy, as an economic calculus gives way to a range of cross-cutting ‘social needs’ and motivations, often at variance even within the individual unit of the social economy organisation (or social enterprise).

In Greater Manchester, it’s possible to see a range of moves designed to render the social economy as large as possible, and preliminary evidence suggests that this encompasses organisations who accept the designation wholesale, as well as others who are less keen to be labelled as ‘social enterprises’.

These factors appear to come into play regardless of an organisation’s ‘fit’ with either the Department of Trade and Industry definition of social enterprise, or any other. Our suggestion is that by examining what we call the ‘micro-relations of the social economy,’ via systematic studies of how people (from all walks of life) enter into, operate or work within, and potentially leave the social economy, we might be able to more fully critique these moves towards overgenerous use of the ‘social enterprise’ brand. To do this we are seeking to re-assess what many – including those within the co-operative movement – have suspected for some time; that issues of process have been elided within this ascription.
Examining the arena of the social economy from the level of the actor also enables us to re-evaluate many of the big questions, such as employment, social inclusion/exclusion, and sustainable living, at the level of material practice, rather than stated purpose. At a basic level this could mean assessing activities literally ‘in process’, and comparing these to prior accounts of what an organisation is seeking to achieve.

At a more complex level, assessments can also be made around the aims and objectives of particular policies, as well as the continued veracity of prevalent but largely untested assumptions. For instance, does the Intermediate Labour Market (ILM) model for social enterprise require re-conceptualisation, in the face of evidence that some people desire to stay within the social economy, and that some organisations are evolving to accommodate this state of affairs?

The fundamental issue is the assessment of the social within the social economy, and how this can be re-thought.
What does it mean to evaluate the capacities of organisations through their members, and only subsequently consider how the organisation might be geared towards particular outcomes within the socio-economic marketplace? Furthermore, what does it mean to investigate means (the raw material of the social economy) over ends; not assuming that the former emerges from a consideration of the latter, or that certain ends inevitably result from specific plans being put into action?

Our research has yet to reach any specific conclusions, yet some preliminary areas of interest have emerged:
Firstly, an examination of the ‘communities of practice’ which form around and through social economy organisations. These are the informal networks via which much of the social economy is shaped. The ‘social clubs’ and ‘local pubs’ are as important as the shop-floor, these are the places where trust, inclusion and a considerable amount of informal learning occurs.

Secondly, participation within the social economy appears to be different in style from social participation per se, and it is unhelpful to view the development of social enterprise as capable of resolving inherent problems within – for example – representative democracy.

Thirdly, the notion of ‘trading for a social purpose’ needs to be more clearly defined, and perhaps totally deconstructed. This is because ‘trading for’ is not the same as ‘trading with’, or even ‘trading because of’ a social purpose.

Finally, attempts by the DTI to put in place a ‘new settlement’ around social enterprise appear to lead towards a desire to develop an evidence base resting upon ‘best practice’ and specific paths to viability, a move reproached within previous work on the social economy undertaken at Durham. The term ‘social economy organisation’ is used within our project as a distancing device – a shift away from this unhelpful ‘bracketing’.

It has been noted that despite a number of encouraging moves by government, there remains a view that ‘mature’ social enterprises should aim for revenue to be generated almost entirely from trading activity, although this is tempered in the case of organisations who are tackling ‘public service’ goals in areas where the private sector is unable to operate on a sound commercial footing.

This leads towards a system where social investment models only look at the output and delivery performance of social economy organisations, assigning an economic calculus around what emerges from the enterprise, rather than providing a critique of novel ‘business-like practices’ within the enterprise; the process by which the organisation has found itself ‘doing what it is doing.’ It is this element which is vitally important in the development of the sector, in Greater Manchester and beyond.

I would conclude by suggesting that the consideration of incommensurability should be at the heart of research into the workings of the social economy. It is at these junctures or ‘points of contestation’ that we can learn the most about what makes social economy organisations distinctive. For instance, the fact that the social economy is presented as both an ‘alternative economy’ and a ‘plural economy’ within policy debates is one such area.

A second area emerges from this – that the plurality of the social enterprise sector stands in contrast to the prescriptive nature of much business advice (often culled from mainstream business), around the need for performance measurement systems. Within these systems, a consideration of ‘social return’ reliant on ‘mission’, alongside hard to enunciate processes of ‘community trust’, are generally elided. The argument can also be made that ‘performance analysis’ might be more useful for those who promote its introduction than for those who utilise it.

Finally, this leads us towards a third area of incommensurability, that of ‘additionality’. This is seen by the government in terms of the non-economic processes that add value to the economy, but seen – I would argue – by most actors within the social economy as both economic and non-economic processes which might add non-economic value, usually but not exclusively to the locality.

What is clear is that the social economy is increasingly cited as a cure for tensions in the mainstream economy. The renewed interest in social enterprise by the Conservative Party (within their ‘Social Justice’ agenda) highlights this. Therefore, the need to assess what is actually happening within the social economy, rather than what we might like to see happening, has never been more critical.

Further information
Dr. Chris Hewson is a Research Associate in the Department of Geography, Durham University.

Personal experiences/reflections of social enterprise in Greater Manchester, are very welcome: social.economy@durham.ac.uk