SEUK’s External Affairs Director, Andrew O’Brien looks into the Government’s Civil Society Strategy, what it means for social enterprise and how we can make it work for our sector.

The government has published today its much publicised Civil Society Strategy: “Building a better future for everyone”.

Social enterprises do feature in the Civil Society Strategy thanks to campaigning from Social Enterprise UK and other partners. We would prefer a separate strategy for social enterprise, as the Scottish Government has produced, recognising the difference between civil society and social enterprise. We will keep calling on the government to stop lumping social enterprise and “civil society” together because these are not the same thing.

Overall the document is big on aspirations but light on details. This isn’t a “strategy” so much as a statement of intent. Government has decided that it needs to look “busy” on social enterprise and on social value and this strategy is a way of achieving this.

There are three main key areas where the strategy touches on social enterprise: responsible business, machinery of government and social value.

Of course with any big strategy there are a lot of individual initiatives which may effect social enterprises working in particularly sub-sectors and we will be engaging with Government on all areas where we feel social enterprises are impacted.

Responsible business

The Business Secretary has said in the strategy that he wants to do more to support “responsible business”. What Government means by this is that they want businesses to pay greater attention to their social and environmental responsibilities without changing their structure.

We would argue at Social Enterprise UK that you cannot achieve more responsible business without looking at the way that businesses are structured. We need to look at changes to Company Law so that social and environmental responsibility is on par with a responsibility for shareholders. We need social value to be embedded in the way that businesses spend their money and to account for the impact that they have.

Traditional firms need to become more like social enterprises if we are going to see real responsibility and progress on social and environmental issues.

What does the strategy say?

Well, the government does commit to creating a “Responsible Business Leadership Group” which will consider these issues.

They are also backing Purposely an online tool to help business put a social mission into their corporate governance. It will also be producing more guidance on Section 172 of the Companies Act which makes Directors have “due regard” for the impact of the company’s operations on the community, environment, employees and wider stakeholders.

Does this go far enough? No it doesn’t. Tools such as Purposely are useful, but the Companies Act makes it easy for companies to chop and change their mission, and we need to change the law so that there are greater safeguards and so that companies have to account for their social and environmental impact.

Social Enterprise UK will be engaging with the Government’s Responsible Business Leadership Group to push for concrete measures to achieve a real responsible business agenda so that the warm words lead to tangible changes.

Machinery of government

A big problem for social enterprises is that we cut across so many issues, but DCMS is not in a position to bash heads together to get the best outcome for the sector. All too often we hear about changes that may impact social enterprises too late to do anything about them.

The strategy in itself is an effort to bring all government departments together but we need a permanent mechanism. We would prefer to have a Social Enterprise Unit within the Department for Business, Energy and Industrial Strategy. Social enterprises are businesses like any other, and should be housed within the business department.

But the strategy does talk about the need for greater coordination within government in relation to social enterprise. This will be supported through a new forum for social enterprises to manage relationships. This could be the opening we need towards embedding social enterprise more within key departments such as BEIS, Health and Social Care, Transport and HM Treasury.

There is a real risk that now that the strategy is done that government will take its foot off the peddle. This has to be the start of a process towards putting social enterprise at the heart of the Government’s economic and industrial strategy.

Social value

David Lidington had already announced that central government departments would be beefing up their use of social value in procurement. What the strategy did highlight was the focus on measurement and supporting commissioners to make the right decisions. We believe that there should be measurement, but this has to be based on the needs of service-users and communities, not off the shelf measurements which can be easily gamed. We will be following up with the Cabinet Office on this.

The government has also floated extending social value into planning and community asset transfers. The UK has seen a “fire sale” of assets recently, and Locality’s Save our Spaces highlights the scale of the issue. Social value is a process of ensuring that more than just cost is considered, including social and environmental wellbeing. Social value should be extended to planning and asset transfer decisions so that the right decisions are made for communities. SEUK will be supporting this extension as the government “explores” further options.

There are however some big holes on social value. Local government is not really considered nor are other public bodies such as CCGs. The steps being taken by central government need to be replicated across the board if we are going to increase the amount of procurement shaped by social value from £25bn to £280bn (the total amount spent by the public sector).

We also need the Social Value Act itself to be changed. The Act’s passage showed that legislation is a powerful tool for cultural change. Extensions and explorations are useful, but we won’t see real change until the law itself is changed.

We must make the strategy work for us

There were also scattered announcements around extending mutuals into the youth services sector and including social enterprise in the Cabinet Office Strategy Supplier Group.

There is a lot still up in the air. We must make this strategy work for social enterprise. This means taking the fragments of announcements, the explorations and pilots as well as the new forums and discussion groups and turning these into a coherent strategy for supporting social enterprise.

This will be our goal over the coming months.