Whatever we do, health spin-outs seem to give social enterprise a bad name

Two different — but depressingly related — stories caught my eye in SEWM’s weekly update today.

The first concerns NHS Surrey’s decision to award a £500m community services contract to Assura Medical, the Virgin-owned private health company, rather than to Central Surrey Health, a nurses-led social enterprise set-up in 2006. A key factor against the social enterprise’s bid was apparently having inadequate working capital in the bank to cash-flow the contract.

Interestingly, City Health Care Partnership (Hull) has encountered the same problem — but thinks it may have found an answer. It has just bought a private sector pharmacy to ensure that it has a bigger source of ready capital coming into the business.

The other story that caught my eye is what is probably the first NHS social enterprise spin-out exercise to be halted by a public campaign.

NHS Gloucestershire had awarded a contract to deliver primary and community care services, including nine hospitals, to Gloucestershire Care Services — a move which would have created the largest CIC in the UK. But this decision was reached without a competitive tendering process taking place. Stroud Against Cuts has backed the legal challenge of one of its members and NHS Gloucestershire has had to put the contract — reportedly worth around £100m a year over three years and due to start on the 1st October — on hold while it takes legal advice on its position.

Some advocates of the social enterprise approach to health provision are beginning to feel that few will ever be big enough or sufficiently capitalised to win contracts — contracts which, it must be  said, the government still insists on aggregating in order to achieve economies of scale, thus driving up contract values while also driving out smaller competitors.

On the other hand, when NHS trusts rush into hand-over exercises to social enterprise spin-outs the sector gets an even worse name. Campaigners in Stroud not surprisingly claimed that handing primary and community care services, 3,000 staff and nine hospitals to a CIC would be less publicly accountable than services that stayed public.

I can’t help but think that social enterprises are being dragged into a reputational quagmire and in danger  — certainly at the exalted level of large-scale spin-outs — of being seen as politically compromised agents of government policy.


  1. Simon Lee Reply

    Point taken, Alun, and perhaps this highlights the need for the social enterprise sector to continue to raise awareness as to why social enterprise is different from privatisation (through the “back door” or otherwise).

    I agree that, whilst the government push for social enterprise has been welcome in the sense that it has brought the phrase “social enterprise” much more into the public arena, the sector cannot assume that government will fight its battles for it.

    We need to try to walk the line between accepting government help and publicity while it is there, and not being government “agents”, as you say.

Leave a Reply