Version City

04.06.15

What is social enterprise and where does it fit into the not-for-profit sector?

This is still a question I hear regularly. Additionally, the shadow minister for social enterprise recently talked of defining what we mean by social enterprise. She said that a social enterprise needs to not only give something back to the community but also needs to treat its employees well, eg not exploiting in terms or paying below the minimum wage. By this definition I suggest that a growing number of not-for-profit organisations, especially those with government contracts, could not call themselves social enterprises – not because they don’t seek to give something back and employ well trained, supported and paid staff – but simply because many public sector contracts don’t allow them to.

BBC Radio 4’s flagship “Today” programme has covered the stories of some care workers who do not receive payment for their travel time (not even for the cost of the petrol in some cases), nor for the time spent organising care plans but only for “contact time” ie when a carer is in front of a client/service user. This may not be too punitive in London boroughs, which are geographically confined and where transport links are good, but in most places this is not the case.

We take a dangerously simplistic attitude to assume that this is all due to bad employment practices or uncaring, profit-seeking providers. The providers themselves are usually being squeezed by those commissioning the services. Care homes are also voicing strong concerns about the rates that commissioners want to pay.

Providers are sometimes between a rock and a hard place – receiving insufficient funding to deliver a quality service but afraid that there will be no service at all, if they don’t continue to try.

But when do you need to call it a day? When are you doing your beneficiaries a disservice instead of delivering what you know is required? How far is it fair to rely on the good will of staff? Far from social enterprises being organisations that look after their staff, they are increasingly distinguishing themselves as providers that are prepared to subsidize underfunded contracts.