Illustrations of British Social Enterprises in Three Fields

The British approach to social enterprise recognises the potential for forming social enterprises in a wide variety of areas. In this section, there are illustrations of social enterprises from three fields: work integration for disadvantaged people, community businesses and public services. Other fields—including the production or sale of fair-trade or ecological products or services—are also important in the British context but are not discussed here.

Work-Integration Social Enterprises (WISEs)

Work-integration social enterprises (WISEs) constitute a prominent field in many countries. These are organisations that aim to assist people on the margins of society to reintegrate into employment, and prevent their permanent exclusion from the labour market and civil society (Spear and Bidet 2005).

There are significant differences between the British field and its counterparts elsewhere in Europe. The goals and structures of WISEs in the UK have been significantly shaped by the unemployment rate, centralised labour-market policy and historical development of the field. WISEs have roots in worker cooperatives dating from the 19th century (Somers 2005; Aiken 2007). In the British policy environment, work integration has been highly centralised and subject to fluctuations arising from high unemployment (1980s); then low unemployment (mid-1990s to 2008); and, since the global recession, back to high unemployment or under-employment (Aiken 2007). At times, policy and funding focused on small numbers of severely disadvantaged people (low volume), while at other times, there was a concentration on large numbers, with strict outcome targets (high volume). WISEs tended to flourish in the first scenario and flounder in the second. The government’s focus has tended to be on hard outputs (i.e., exact numbers of individuals placed into employment) (Spear 2001), while softer outcomes, such as increased self-efficacy and confidence, have nor been valued (Hazenberg et al. 2013).

256 Aiken, Spear, Lyon, Teasdale, Hazenberg et al.

Overall, the rapid changes in policy priorities and funding arrangements have hampered the stability of British WISEs.

Community Businesses

Community businesses are a highly successful model for local community development. They can be effective in motivating and supporting local communities by, typically, providing transport, shops or pubs. The approach involves members of the community taking a share in the organisation and playing a role in its governance. The community business typically develops various projects that address social-exclusion problems in disadvantaged inner-city and rural areas. This is a self-help approach to regeneration by strengthening community structures and services in a community/member-led, democratically controlled organisation. The model has also been used in parallel initiatives such as City Farms. Locality, one of the national umbrella bodies, sees these businesses as organisations run by and for their communities. They may receive support or start-up help by organisations such as Power to Change or Plunket Foundation.

Social Enterprises Providing Public Services

The UK has a very high level of public services delivered by independent private or third-sector organisations. Julius (2008) estimated that private-sector delivery (including delivery by the third sector) represented over 30% of total British public-sector expenditure. Only a small proportion of these services are delivered by social enterprises but this small share makes up a large proportion of SE activity. Social enterprises in this field have emerged from policy initiatives that sought to privatise or reform public services. Four types can be distinguished: first, housing associations, which are regulated charities that took over localauthority (municipal) housing; secondly, leisure trusts, which are staff-controlled multi-stakeholder cooperatives that manage municipal leisure services; thirdly, academies and cooperative schools, which are multistakeholder charitable trusts with some parental and staff involvement in governance; and fourthly, public-service mutuals, which represent a recent spin-off from the public sector but are typically management-led, albeit with substantial staff ownership and participation.

Housing associations have Victorian philanthropic roots, including the Peabody Trust and Guinness Trust. The Thatcher government’s privatisation of public-housing provision implicated these formerly independent non-profit organisations as providers of social housing, albeit within highly regulated markets. The government considered them to be part of the third sector (Mullins 2010), as did other third-sector researchers (Kendall and Knapp 1993, 1996). Yet Mullins (2010) argued

United Kingdom 257 that increases in scale, a decline of voluntarism and tight government regulation had distanced housing associations from the third sector.

Leisure trusts are staff-controlled, multi-stakeholder organisations for community benefit. Most emerged after 1993, when municipal leisure services were privatised. For example, Greenwich Leisure Ltd, a charitable social enterprise, has established 115 sport and leisure facilities. Their usual legal identity is an I&PS or a CLG (Simmons 2008).

Academies and cooperative schools form the major part of the growing independent school sector. Since 1988, schools have been given the option to opt out of local government control and gain funding directly from central government. New Labour legislated for foundation (trust) schools in 1997; this was followed by legislation for academies, which are usually constituted as non-profit charitable trusts. The governance requirements of academies are based on business terminology and despite the possible presence of employee and parental representatives in governance, democratic control is limited. In contrast, at the time of writing, there were around 800 cooperative trust schools operating as multi-stakeholder charitable trusts, with more democratic and accountable structures, and a large proportion of the preschools and nurseries were also being run as social enterprises.

Public-service mutuals have emerged as spin-offs from the public sector amid new public management trends. They are active in health and social care alongside spin-offs from social work, probation, children and youth services, and libraries. Their precise legal form and manage-ment/stakeholder structures vary. Further, there are increasing numbers of public-service/third-sector hybrids (Spear 2015) with “mixed” characteristics. These include most hospitals, which have converted into foundation trusts, amid promises of greater financial and governance autonomy. Membership structures exist within highly marketised contexts. These mutuals claim “significant” employee control (Mutuals Task Force 2012: 8) but fewer user involvement features (Ellins and Ham 2009). The spin-out process, supported by £100 million (approximately €116 million) from the government’s Social Enterprise Investment Fund, was often supported by senior staff (Hazenberg and Hall 2016). The scale of public spin-outs is large in terms of staff numbers and turnover. A survey of 27 health and social-care spin-outs found that their annual turnover averaged £18 million (about €21 million); most were registered as CICs (Social Enterprise UK/Dan Gregory 2013).

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