What is a social enterprise and why do you need to know about them?
In the 2010 White Paper ‘Equity and Excellence: Liberating the NHS’, the Government announced its ambition to create the largest and most vibrant social enterprise sector in the world. This is part of the Government’s ‘Big Society’ agenda to devolve power from central to local control and encourage people and organisations to play a more active part in their local communities.
By 2009 there were already an estimated 6,000 social enterprises delivering health and social care within the NHS, many of which were set up by small groups of individuals. The number of healthcare workers transferring to, or setting up, social enterprises is set to increase as the providers of health care position themselves within the changing organisational structure of the NHS.
The phrase ‘Social Enterprise’ was invented in 1998 and is widely used but people often don’t know what it actually means. Key factors about social enterprises include:
- They are businesses directly involved in producing goods or providing services for social and environmental purposes
- They generate the majority, if not all, of their income through trading goods or services
- They have explicit social aims and are accountable to the wider community for their social, environmental and economic impact
- Surpluses and profits are principally reinvested in the business or in the community rather than going to shareholders
- They can arise from the public, private or voluntary sector
Social enterprises have arisen from a wide range of organisational backgrounds, including:
- Trading charities
- Community groups
- Individuals or groups of individuals
- Public sector
- New start-up organisations
- Housing associations
There are many social enterprises in the UK including well known examples such as Turning Point, the Eden Project, the Big Issue, and Jamie Oliver’s Fifteen restaurant. They can range in size from small community-owned village shops to large organisations delivering public services.
A jargon buster explaining many of the terms associated with social enterprises can be found on the Social Enterprise website.
To find out more:
The Social Enterprise Coalition
A national organisation promoting social enterprise in the UK.
A monthly magazine and online service for people involved with social enterprises.
The Department of Health
Pages on Social Enterprise.
The State of Social Enterprise Survey
Published by the Social Enterprise Coalition.
Case studies of different social enterprises on the Social Enterprise - Yorkshire and the Humber website.
Different models of social enterprise
In social enterprises, the staff and service users are involved in the design of the services that they provide and use and can tailor them to meet the needs of their local population. There is no single legal model for a social enterprise. The model adopted by different social enterprises tends to reflect their origin, purpose and function.
A new type of company designed for social enterprises was introduced by the UK Government in 2005. These community interest companies are limited companies with additional features that ensure that they are acting for the community benefit.
To find out more:
Community interest companies
Community interest companies (CIC) are a new type of limited company designed specifically for those wishing to operate for the benefit of the community rather than for the benefit of the owners of the company. This means that a CIC cannot be formed or used solely for the personal gain of a particular person, or group of people.
Thinking about starting a social enterprise?
Business Links’ social enterprise pages.
Examples of social enterprises delivering health services:
- Your Healthcare
NHS Kingston’s provider services arm which became a social enterprise in 2010.
- Social Adventures
A social enterprise delivering public health outcomes in some of Salford’s most deprived communities.
- Sunlight Development Trust
Uses community development to tackle long standing health and social inequalities.
Set up in 2006 to design and provide health services for the community of Rushcliffe.
- Maternal Link
A midwifery-led social enterprise.
- Central Surrey Health
Provides community nursing and therapy services to the people of Central Surrey.
- Social enterprise in action
Case studies of social enterprise projects set up under the ‘right to request’ scheme
Working for a social enterprise
The first ‘State of Social Enterprise’ survey, released in November 2009 found that social enterprises were generally performing better in the economic downturn than other small to medium enterprises. This survey also had a number of findings that give some insight into the nature of social enterprises:
- Social enterprises have developed from diverse backgrounds including entrepreneurial individuals and public sector organisations but about half were from the voluntary and community sector
- One third of social enterprises had sought finance in the previous 12 months, mainly for growth
- 26% were women-led, compared to 14% of other small businesses
- The most common reasons people gave for working for or starting up a social enterprise were putting something back into the community, a better way to achieve social or environmental goals and to make a lasting difference
To find out more:
It may be possible for NHS staff transferring to a social enterprise to maintain their existing terms and conditions of employment, which are legally protected at the point of transfer under TUPE regulations (Department of Health).
Social enterprises may be able to continue to access the NHS Pension Scheme for existing members through a direction order, through an application to the Department of Health (NHS Employers).
Some examples of questions that you need to ask:
- Who are the existing or likely clients and customers for the social enterprise’s service?
- How will the terms and conditions of my employment be affected? E.g. working hours, pay, annual leave entitlement, flexi-working arrangements
- How will my pension arrangements be affected?
- What will the opportunities for training and development be?
To find out more: