Policy Update – What’s happening in Westminster and what it means for social enterprise

Based in Oxford, Tap Social Movement are on a mission to reduce reoffending through employment in brewing, baking and running hospitality venues. To date across its five sites, they have created more than 100,000 hours of paid meaningful employment for prison-leavers, with 30% of their hospitality and production teams having lived experience of the UK criminal justice system. To achieve more of this great impact, last week Tap Social launched a Crowdcube investment campaign. This is the first time they've opened the company up to investment from the public; as well as shares, there are rewards offered for investments. They are in the midst of an exciting growth stage that includes wider distribution of their beers across the UK through national retail, the launch of an ambitious, purpose-built new venue (with plans for more in the coming years), extensive expansion of their bakery Proof Social Bakehouse, and much more. The campaign runs until 30 July. Please visit the campaign page if you think you can find a space to share this, or might be interested in investing. VISIT THE CAMPAIGN PAGE

To reduce the severe pressure facing children’s services, the government must find alternatives to private equity profiteering, reform procurement for public benefit, and support partnerships between local authorities and social enterprises and cooperatives, MPs were told last week. Speaking at the first roundtable of the Social, Cooperative and Community Economy All-Party Parliamentary Group (APPG) on public service provision, parliamentarians, local authority commissioners, and social enterprise providers explored the systemic barriers hampering effective care for society’s most vulnerable children and heard how mission-led providers could be better supported to deliver it. Challenges facing children’s residential services Provision for children needing an alternative to remaining within their immediate family is stretched across local authorities due to rising demand, funding cuts, procurement and commissioning limitations. Not enough children stay with extended family, foster care supply is limited – in part due to issues around access to appropriate properties. And residential care provision is too often in the hands of expensive, out-of-area, profiteering providers who don’t provide holistic and joined-up care.   Local authorities are struggling. The roundtable heard that 46% of councils are overspending their budgets by 20% or more, with many citing children’s services as the primary cause. The dominance of private equity was repeatedly identified as a structural issue. In Greater Manchester alone, 50% of children’s care providers are controlled by private equity firms, many of which are offshoring profits. “Private equity extracting profit and offshoring needs to stop” said one attendee. Barriers to positive children’s social care provision Social enterprise, co-op and charity provision offers cost-effective solutions – cost-effective not only because they aren’t off-shoring high profits, but because provision is child-centred, trauma-informed, locally-based and – increasingly – co-designed with local authorities around need and capacity. What is stopping this being the norm everywhere? Funding and finance Accessing suitable finance remains one of the greatest barriers to expanding mission-driven businesses’ children’s residential care provision. The upfront cost of setting up residential care - from property to compliance - was highlighted by attendees as prohibitive. One provider described “£100,000 runway costs” before a home can begin accepting children. Sourcing the right type of finance takes time, finance can be expensive, and grant funding is often too short-term or restrictive. A social investor told the roundtable: “We need more patient, impact-aligned capital and government funding can act as a catalyst for social investment.” Commissioning and regulatory constraints The procurement framework within local authorities, designed originally for large-scale goods provision, isn’t fit for the purpose of securing quality services at a local level – and as such often biases towards provision by profiteering firms.   Variations in planning regulations between local authorities mean mission-led providers face very different commissioning and regulatory issues depending on geography. Differences in commissioning culture, for example, mean that some councils are seen as risk-averse and less likely to facilitate mission-led provision. Similarly, in some areas, residential homes can be set up with minimal bureaucracy but elsewhere regulatory loopholes around approval of buildings and scale of provision can be prohibitive. Workforce challenges and high churn The absence of a professionalised workforce, including a lack of recognised qualifications or progression pathways, was cited as a major issue for provision. Low pay, lack of professional development, and poor status in the sector all contribute to workforce churn. One attendee described this as “entirely inappropriate,” given the responsibility care workers hold. Turnover of managers is particularly disruptive, as care homes must be reinspected by Ofsted even if managers move between sites within the same organisation. The lack of a “passport” system for staff was flagged as a fixable bottleneck. Social enterprise solutions: building local, trauma-informed care Despite these barriers, social enterprises, cooperatives, and other diverse mission-led businesses identified how they can provide more stable, child-focused, and community-rooted models of care. Finance and investment The UK’s social investment market now stands at £10 billion, creating new opportunities for blended finance. Social AdVentures, a Salford-based social enterprise, was held up as an example of how social investment and combined authority support can enable new models though convening multiple actors remains a complex task. Mission-led alternatives to private equity Social enterprises reinvest surpluses into services, enabling them to focus on long-term, trauma-informed care. They are well placed to support children with complex needs and prioritise relationships and wellbeing over short-term profit. Mandating open-book accounting and capping profits - currently up to 40% for some private equity firms - were floated as policy options to level the playing field. Localised, values-led commissioning Reserving contracts for public benefit organisations is already happening in parts of the UK, and speakers suggested this approach could inform wider policy. Ministers were urged to embed social value more directly into commissioning decisions. Roundtable attendees highlighted examples of small-scale provisions to address the acute needs of children with complex care requirements, as well as the value of long-term partnerships between providers and local authorities to ensure sustainable care solutions. Regional Care Cooperatives (RCCs), being developed through the Department for Education with the intention they will allow local authorities to partner with providers in a more integrated way, were discussed as a promising structure, potentially offering a single point of contact and shared vision for care. Professionalising and empowering the workforce Several solutions focused on improving staff conditions and morale. Social enterprises were praised for involving staff in business planning, providing training, and minimising reliance on agency staff – which can be a runaway cost in children’s services provision. Attendees called for structured training programmes and better career pathways, noting that 22% of children’s homes currently have no registered manager. Professionalising care roles and offering qualifications would improve retention, stability, and ultimately, outcomes for children. Asks and ambitions for reform As the government launches consultations into procurement reform, parliamentarians present, including Georgia Gould MP (the Cabinet Office Minister responsible for public sector reform) and Josh MacAlister MP, heard clear evidence that social enterprises are already delivering, but need the right support to sustain and scale. The current system is not built with social enterprises in mind; new legislation and guidance must explicitly create space for mission-led providers to flourish, providing cost-effective solutions with quality service outcomes. Attendees stressed that this will require bravery among commissioners, and for local authorities to be supported in taking creative, child-centred risks. Speakers also called for a fundamental shake-up of the care model, moving away from crisis-driven residential placements toward more flexible and therapeutic alternatives. Attendees called for the NHS to take a more direct role, one noting that “health sits on a lot of money and they are responsible for these children.” Greater alignment between social care and Children and Adolescent Mental Health Services (CAHMS) was seen as essential to building joined-up, trauma-informed support. Ultimately, the ambition of roundtable participants was clear: to build a children’s care system that starts with the child, not the contract. That will require longer-term funding, shared purpose, and a willingness to put public value above private gain.

The 10 Year Plan feels like it's taken a lot of lessons from social enterprise models. But the Plan still seems blind to the significant contribution social enterprises make in delivering services, writes Social Enterprise UK Associate Director, Dan Gregory. Today (3 July) saw the much-heralded launch of the Government’s 10 Year Health Plan for England. It tells us three important things about the thinking in Wes Streeting’s department. First, this is a 10-year plan. Yet this Government has been elected for a 5-year term. So, this is ambitious, it’s aspirational. And perhaps a little detached from reality. Second, they see the launch of a document as significant. From all the recent invitations Social Enterprise UK has received from the Department of Health and Social Care (DHSC), they are very keen that we read the output of what they’ve been doing for nearly a year. Even if they remain less keen to listen to what we have to say. Third, this is the Plan that will lead to delivery. To change. To the future of the NHS. What's in the Plan? But how? What is in the Plan? What does it say? The plan is long (166 pages) as we might expect. But is remarkably short on how. It helps to have ambitions before you set off, of course. But this isn’t really a complete plan. More of a direction. Perhaps this is wise, and Streeting understands that dictating everything from the top down or centre out is not the answer. The department is directing whilst not directing – the Plan is “tight on what, loose on how”. It’s less of a plan and more a series of bets, trials, pilots and avenues to explore. Change will be slow. New Foundation Trusts (FTs) and Neighbourhood Health Centres will be gradually rolled out through programmes. Various other whizzes – a Choice Charter and Patient Power Payments - will be trialled and “rolled out progressively". On the money side, "in the next 3 years we will make a start on the journey to establishing a new financial foundation." New tariff models will be slowly phased in. New "year of care" payments will be trialled in pioneering areas. Later this year they will "publish a 10-Year Workforce Plan". Of course, this may be quite sensible. But it’s clear that much of the plan is still to be designed and delivered. The new operating model will be "devolved and diverse". This means more messiness in the medium term for sure. But what’s the direction then? Well, the ambition is great. And it’s very much aligned with the ethos and experience of our social enterprise members working in health and care. The ambitions are around prevention and community. Empowered staff, with agile and autonomous models embedded in the local community. Financial incentives to break even and reinvest. Some of this is even quite explicit: "more money towards areas with disproportionate economic and health challenges". Great. No more bailing out FTs in deficit. Good. Hospitals will be expected to “do more as anchor institutions to support wider societal and economic goals. Through their procurement, supply chains and role as an employer, they have significant influence over social and economic development in their communities.” Also good. FTs will have more freedoms to retain surpluses, reinvest them and borrow for capital investment”. Indeed, they will be more like social enterprises. Then of course, there is a lot on the NHS app, on AI and other innovations which I won’t attempt to summarise here, even if I understood them. But some of the detail is rather more troubling. The big new idea is the Neighbourhood Health Centres which will “co-locate NHS, local authority and voluntary sector services, to help create an offer that meets population need holistically” a good idea, for sure. But who is going to tell local charities and social enterprises they are going to have to relocate - is that what this means!? Meanwhile, the financing of new Neighbourhood Health Centres looks a lot like a new wave of Private Finance Initiatives. Then the Plan also seems to effectively nationalise Healthwatch, which was a social enterprise experiment that will now be forgotten and airbrushed away. What about social enterprises? What does it say about social enterprise? There are (phew!) a few mentions. So, we have the recognition we wanted as a baseline – the flag in the sand. Indeed, there are also two case studies - Primary Care Sheffield and Live Well Manchester, which are built around social enterprise. But unhelpfully, the Plan refers to social enterprise at one point as "outside the NHS", which is infuriating. Perhaps, this is partly our fault for reinforcing this idea? I am often annoying our members by asking them to say, “We span out of the public sector” rather than “out of the NHS”. We are part of the NHS! This is indicative of the wider problem here. Large parts of the Plan don’t recognise at all that significant chunks of NHS services are not delivered by the public sector. Where it says - "every NHS provider should be an FT" - it clearly means every public sector provider, not every social enterprise, hospice or GP practice. This blind spot is maddening and doesn't seem to want to go away. Social enterprises deliver several billion of pounds’ worth of NHS services but still we are forgotten and fall between the cracks when it comes to the backlog bonus, access to digital and capital investment, CPD resources, international nurse recruitment, and the list goes on. At Social Enterprise UK, we keep fighting to be included and not forgotten and pull all the advocacy levers we can lean on. Sometimes we win! Some parts of DHSC and NHSE listen. But others don’t. We are currently working with some very engaged NHSE officials on equal access to digital investment, which will be even more critical as these pots of money grow. We are talking to NHSE about how their new structures within DHSC might replicate the old Social Enterprise Unit. But the next day we meet a senior strategist who doesn’t even know that in West Yorks, Plymouth, Bristol, Nottingham. Grimsby, Medway and beyond, we are the NHS outside of hospital. We provide urgent out of hours care to 2/3 of the population. Yet we are nearly invisible to some system leaders. Maybe they don’t like us. Maybe we are too awkward. Maybe we don’t fit and they know it, and hope we go away. Or maybe they know we aren’t where the problems are, and they are mainly focused on the problems. Maybe NHSE and DHSC are just a mess and half the staff are facing redundancy. Or maybe the NHS is simply a massive, complex system equivalent in size to the Hungarian or Moroccan economies. Influencing a system of that scale is a Sisyphean task. We keep on regardless! The Plan ends with a Wes Streeting afterword entitled "Be the Change", which many will know is the well-established motto of the social entrepreneur. While the system largely ignores us, and even puts barriers in our path, it also seems to be moving our way, and trying to build an NHS more like us. While we aren't winning (though also maybe not losing) the battle of ideas and policy, across the country we are winning in practice, through the daily work of our members and their staff, leading the way. Health and care social enterprises will carry on delivering the future, whatever the plan. To see a few examples of how social enterprises are already transforming the delivery of health and social care across the country, read our series of case studies produced in partnership with King's Fund and Baxendale.