Alarm as public sector forms new-style social enterprises

Concern is growing among service delivering charities that primary care trusts and other large public sector organisations are setting up social enterprises to bid for contracts that currently go to traditional third sector organisations.

The Government wants the third sector to deliver more public services, but charity leaders are alarmed that public bodies are setting up social enterprises to bid for contracts against smaller, local voluntary organisations.

Chief executives body Acevo is canvassing views. "This is a significant concern for a number of members," said Seb Elsworth, head of policy at Acevo.

"Simply to be able to access the market or resources is the wrong reason to become a third sector organisation and risks taking opportunities away from third sector organisations rooted in communities."

The Department of Health awarded £1.4m to 26 'trailblazing' social enterprises in April to help them "lead the way in delivering innovative community services in health and social care".

PCTs in Hull, Surrey, Milton Keynes and the Forest of Dean were among the beneficiaries, and charities are angry that ministers awarded money to schemes that could soon be competing against them for contracts.

"No one said anything about moving the statutory sector into the voluntary sector," said Margaret Allen, chief executive of Hull and East Yorkshire Mind.

Her charity could soon have to compete for contracts against City Health Care Partnership, a community interest company comprising 1,200 staff to be transferred from Hull Teaching PCT. Allen is anxious that the PCT, with which her charity shares service level agreements, holds commercially sensitive information about her organisation.

Trade unions have opposed the new organisations because PCT staff transferring into new third sector bodies could lose their NHS pensions. "The real issue for us is the need for social enterprises to emerge organically, rather than be forced in order to create a diversity of provision," said Guy Collis, policy officer at Unison.

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