Social Enterprise

Lord Mawson Excerpts

Thursday 6th October 2011 Lords Chamber

[Lord Mawson]

My Lords, I join other noble Lords in thanking the noble Baroness, Lady Andrews, for securing this important debate. We are all conscious that we live in a world that is quickly changing around us. If you stand still, you can feel as though you are moving backwards. People are no longer willing to accept the same predictable services from the public sector but are demanding higher quality services, more choice and the personalisation of services. In reality, can governments deliver this choice?

The situation in Europe at present is just one example of political drama that makes people wary of trusting Governments. People are sceptical—often with good reason—of politicians who hide behind grand phrases, processes and hubris but take little care of the detail and fail to deliver positive, practical and sustainable action. In the social enterprise sector in Britain at present, I, along with many of my colleagues, welcomed the coalition Government’s pledges about social enterprise because they are exactly in the right direction of travel. Yet, worryingly, there is a growing sentiment in the sector that these promises are just not being delivered on and once again Governments cannot be trusted to turn rhetoric into reality.

The coalition Government agreement had two main pledges to support social enterprises in public service delivery. First, it said that they will support the creation and expansion of mutuals, co-operatives, charities and social enterprises, and enable these groups to have much greater involvement in the running of public services. Secondly, they will give public sector workers a new right to form employee-owned co-operatives and bid to take over the services they deliver. This will empower millions of public sector workers to become their own boss and help them deliver better services. Yet, as has been said, the Social Enterprise Coalition, which represents many in the sector, while standing in a slightly different place from me, cannot see at present much support for social enterprises delivering public services. What we all see, they say, is a lot of stagnation: the waters, instead of being clear, are increasingly muddy. The Mutual Support Programme which was announced by Francis Maude in November 2010 has yet to materialise. The national programme for third sector commissioning, a programme designed to support the commissioning of social enterprises and charities, has not emerged.

Without some intervention, there is a real danger that public service markets will be opened up and dominated by a small number of large private sector providers. The Social Enterprise Coalition says that it has seen this happen in a number of public service markets: welfare to work, waste and others where a small number of private companies dominate and the barriers to entry are too high for social enterprises and other small businesses to operate. There is some truth in this and I know from past experience how government departments love to talk to large bureaucracies because they are adept at using that language. Bureaucracies love to talk to bureaucracies. Talking to small and medium-sized social enterprises is quite a different matter because they speak a different language. We will need more than websites to address this issue.

Some of us have seen all this before and it requires focused leadership in government to break the impasse. I am a great believer in the power of the market but sometimes the Government have to intervene to make the market happen. The noble Baroness, Lady Thatcher, knew that.

There are three ways of governing: the centralised state solution, the market, or the present favoured choice referred to by our major parties as going local. While those of us who have operated at a local level for more than 30 years are tempted to welcome this attention, we worry that politicians on all sides do not actually comprehend a lot of the practical detail. The systems of government and the Civil Service can present themselves as something new but when you actually examine the details, old out-of-date processes and systems still prevail and are in danger of replicating themselves a thousandfold in local communities across the country. On my travels, I keep meeting old men in new clothes. There are real and very practical opportunities to grow the social enterprise sector in the process of going local, but it needs nurturing and it will not happen without the devil in the detail being understood within government.

If this does not happen, I fear that we will see yet another phase of a very expensive cycle. Vast sums of money are wasted every year by those politicians who do not take personal responsibility, get hold of the practical detail, and drive forward viable change. The public are tired of seeing very little change and know that the processes of government carry on very much as before, regardless of which party is in power.

There is a challenge here that has not been grasped because there are no particular easy brownie points to be gained by any Government if they grasp this particular nettle. Yet the long-term rewards will be worth the short-term difficulties.

I welcome both the localism and health Bills, but I ask the Minister what evidence is there that the Government are making life easier for those of us who are attempting to deliver these welcome changes on the ground? What evidence is there that there is a level playing field on which social enterprises can compete with large companies? What practical evidence is there that red tape is actually being removed? I can hear many fine words but outside your Lordships’ House, the jury seems to be out on these issues.

The world may be changing but the systems of government and the Civil Service seem to chug on regardless. Without very clear and focused leadership within government none of this will happen and, as with all recipes, the end result depends upon proper preparation, mixing and baking. No one likes an undercooked chicken.

This pretence at change will not do for the modern enterprise culture that our children are now growing up in—a culture where at the press of a button you can receive information from anywhere in the world about virtually anything; a culture where young people, through technology, are learning by doing. The public sector still thinks that the world is about process, system and strategy, but our children are growing up in an integrated world created by entrepreneurs like Steve Jobs, co-founder of Apple, who died today, based around people, relationships, practice and networks. These two worlds are fundamentally at odds and I see little attempt to address the issue from any of our political parties.

The big breakthrough will start to come where social enterprises and business work ever more closely together. My colleagues and I have created a regeneration business, which we have set up as a social enterprise, called One Church, 100 Uses—and I must declare an interest. We have recently moved our head office into the London offices of HLM architects, a business and a well respected firm of architects that operates nationally and internationally. This decision was taken because, as we grow the business, we recognise the potential synergies between us. The development of public buildings over the next decade may necessarily be more small scale with less money about. The churches in Britain own nearly 50,000 buildings across the country, many ripe for redevelopment in favour of the local community. Maybe there is synergy between this business and a small emerging social enterprise. We think there is, and are ready to discover opportunities together. We need to see more partnerships like this in the social enterprise sector.