We are coming to the end of this year’s General Election and the finishing post is in sight. Although the Conservatives have a consistent lead in the opinion polls, this doesn’t mean that the race is over. We all know the challenges of opinion polls and with our first winter election in nearly a century, there are plenty of variables. The important thing is for all social enterprises to treat this election with an open mind and prepare for a range of eventualities.
With that in mind, this is the second in a series of blog posts on the election and what it might mean for social enterprises. Last time, we covered the manifestos. Now we are looking at the key policy battlegrounds. What separates the main parties from each other?
Public service reform is back on the agenda
The Labour Party has put the delivery of public services back at the centre of the political debate with a radical set of proposals to insource and nationalise many services which are delivered by social enterprises and other providers. The most significant area for social enterprises will be in the health, social care and transport sectors.
On health, it appears that the plan is to have no independent providers working within the NHS, with all services brought back inhouse including subsidiary services. We have written to Jon Ashworth asking for clarification but so far during this debate, every time Labour figures have been asked whether they mean all services are going to be brought in house, including those from the not-for-profit sector, they have said yes. The Conservatives have not said anything like this nor have the Liberal Democrats although both have promised to end compulsory competitive tendering in the NHS. Given that there are thousands of social enterprises providing services to the NHS and employing over 100,000 staff, this is a big area of concern for many social enterprises.
Regardless of what happens in the election, it looks like we are going to see legislative change in the NHS to remove competitive tendering to be replaced by a system that is, as of yet, unknown.
On social care, the Labour Party has again made the running by outlining plans to expand the capacity of local authorities to deliver care directly. It is important to note here that unlike in the health space, they say that they will allow “ethical” providers to remain. As social enterprises are ethical, we presume that includes our sector! The Conservatives have said that they will form a cross-party consensus on social care. The Liberal Democrats are going to put extra money into the system and have a social care convention as well as doing more to pool budgets on a place-based basis.
On transport, Labour wants to enable local authorities to take bus routes back into public ownership. This doesn’t seem like an automatic demand but more a heavily suggested offer by central government. The Liberal Democrats also want to enable councils to run their own bus companies and create franchises. The Lib Dems also specifically reference their desire to allow not-for-profits, mutuals and public sector companies to participate in rail franchises in the future. The Conservatives are quiet on the bus issue although they oppose Labour’s rail nationalisation plans.
On top of all this, Labour has proposed a new Public Services Act which would create a new presumption of insourcing of public services. The Conservatives are quiet on this, but do mention that they want to help “charities” to continue to transform public services. We assume that charities are a shorthand for not-for-profit organisations.
What does this all mean? It means that for the first time since the early coalition years, we are looking at a really big debate about the future of the public services. Labour on the one hand, advocating the mass insourcing of services. The Liberal Democrats a bit more open to other providers, and the Conservatives we assume are in favour of the status quo. For social enterprises in the public service space, this election could mark a period of turbulence at a national level after a few quiet years. Threats and opportunities are likely.
The Future of Business
We know that social enterprises are the Future of Business, but politicians are also thinking about the future of our economy as well. There is a consensus emerging that change is necessary, even bastions of conventional capitalism such as the FT have spoken about the need for a “reset”.
As with public services, Labour has offered the biggest break with the status quo through their commitments to doubling the size of the cooperative economy, rewriting the Companies Act, putting workers on boards of large companies and giving them shares through Inclusive Ownership Funds and threatening to delist companies with poor environmental records from the stock exchange. Labour are also going to raise corporation tax and clamp down on tax reliefs which will have an impact on businesses.
The Conservatives are offering a more traditional approach with a bit more public investment in infrastructure and championing innovation. On a local level, the Conservatives want to promote community businesses through a “Community Ownership Fund” of £150m.
The Liberal Democrats as mentioned in our previous blog have said that they want to create a more diversified economy with mutuals, social enterprises and other forms of businesses. The Lib Dems also want to create more transparency in business reporting and to rewrite the Companies Act as well as encouraging more workers on boards.
As with public services, there appears to be a fraying of the previous policy consensus around business. This is the biggest move we have seen in this space since the Coalition Government briefly talked about creating the “John Lewis” economy – although the latter has not had its best years recently.
For social enterprises, any debate about the Future of Business is welcome and there looks like there will be plenty of changes to wade into debates about the future of business.
Brexit. What are the parties policies? What are the timelines? What should social enterprises do to prepare?