Public services find it hard to become social enterprises, says report

Third Sector Research Centre found main problems were lack of support from senior managers and resistance from staff

Report co-author Robin Miller
Report co-author Robin Miller

Public sector workers face significant barriers when attempting to spin out services into social enterprises, according to a report by the Third Sector Research Centre.

The report is based on the experiences of NHS staff in the west midlands in setting up social enterprises through the ‘right to request’ scheme, a Labour initiative that allows all staff to request the right to change the services they provide into social enterprises.

The report was written by Robin Miller and Ross Millar, health service experts at the University of Birmingham who supported 12 groups attempting to use the right to request process. Most of these did not complete it successfully.

The pair found that many entrepreneurs reported a lack of support from senior managers and commissioners, and all reported resistance from staff worried about job security and lack of benefits.

Their report says many social enterprises either did not have the time to develop an effective business model within the government’s timescales, or lacked funding to carry out necessary work.

It also says the development of health social enterprises suffered in particular because the £100m Social Enterprise Investment Fund established by the Labour government to support the concept was closed for six months after the election.

"The experience of the west midlands region shows that there is a long way to go before there is widespread unleashing of entrepreneurial clinicians who set up their own social enterprises," said Miller.

"Perhaps the greatest challenge is enabling clinicians to see themselves as entrepreneurs and take the risks and opportunities that business will present them."

He said the level of support from senior figures was also crucial.

"Of the 10 strategic health authorities, half had a pipeline of nine to 12 prospective social enterprises, while the other half had four or less," Miller said. "This suggests there is either a strong level of support in some areas or a strong bias against in others."

The report says the same issues will be faced by potential social entrepreneurs in other areas of government.

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