BACKGROUND

These are fast growing trends in England which take further some of the themes developed in Huckfield’s Killing Social Enterprise Softly briefing posted in March. All of these increasingly portray the delivery of public services as an opportunity for private investment, with dividends and returns from that investment.

Taken together, these five main themes described below represent the gradual privatisation of the Third Sector and much of what is sometimes called Civil Society.

To save time most important Huckfield comments are highlighted in this colour. These headings below link to later Sections of this briefing.

1)THE GOVERNMENT’S AGENDA: “GROWING THE SOCIAL INVESTMENT MARKET”

In February 2011 the Cabinet Office published its White Paper “ Growing the Social Investment Market: A Vision and Strategy which set out the Government’s vision of moving significant private philanthropy investment into charities to fund delivery of public services.

2)SOCIAL IMPACT BONDS

held a very well-attended Conference on Social Impact Bonds in Bristol on Wednesday 20 June 2012 which Huckfield attended. This Section summarises some Conference presentations and describes mounting enthusiasm for public service delivery funded by Social Impact Bonds.

In Not So Good for Providers this Section describes the effects of these developments on providers and asks What about Local Communities?

3)CHANGING THE LAW ON CHARITIES

are among organisations submitting evidence to the current review on Charity Law to enable Registered Charities to pay a dividend on investments.

This Section includes the Hodgson Review of Charities Act 2006 and the Charity Commissioner’s Farewell Speech

The Government also has a dilemma over how to enable private providers to secure returns on possible investment in Higher Education.

4)THE MOVE TO MUTUALS

The transfer of services and staff from public employment to become mutuals or social enterprises is increasingly a political decision, which is seen as a means of de risking cheapening public service delivery. This Section covers the Social Enterprise Model and Teach Yourself Lansley

5)THE RISE OF THE INTERMEDIARIES

Social Investment Business is among those promoting a growing number of intermediaries taking their percentage out of “structured investment products” for investment in a growing “social profit” sector.There are also proposals for a Social Stock Exchange. This Section includes Investment and Contract Readiness and Financial Intermediaries

6)CAN SCOTLAND FIND ANOTHER WAY?

This Section looks at emerging alternative concepts for Social Enterprise and the Third Sector in Scotland. These include Public Social Partnerships and A Community/Social Enterprise/Third Sector Bank for Scotland?

7)AN ALTERNATIVE TO ‘SOCIAL TURBO CAPITALISM’

Huckfield’s conclusion is that these alternatives to ‘Social Turbo Capitalism’ which have emerged in Scotland are worthy of further focus, exploration and further development.

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MAIN HUCKFIELD BRIEFING BEGINS HERE:

Links have already been provided above to those sections which now follow.

1)THE GOVERNMENT’S AGENDA:”GROWING THE SOCIAL INVESTMENT MARKET”

A Routemap for Third Sector Privatisation

The Cabinet Office publication in February 2011 of “Growing the Social Investment Market: A Vision and Strategy” effectively offers the Government’s routemap towards the gradual privatisation of the Third Sector. Its Introduction and Executive Summary on page 7 makes plain this intention:

“So our vision is to create nothing less than a longterm ‘third pillar’ of inance for our crucial social ventures, alongside traditional giving and funds from the state. This pillar of finance is social investment, money that blends inancial return with social return. Our vision could eventually see individuals and families choose some social investments as part of their ISAs or pension fund. And it could help unlock a slice of the £95bn of UK charitable income and endowment assets for social investment”.

Section 2.3 on page 17 is equally candid:

“2.3 We do not underestimate the degree of challenge, or the timescale required to realise our vision. But the opportunity is large. UK charitable investment and endowment assets alone account for nearly £95bn. If just 5% of these assets, 0.5% of institutionally managed assets and 5% of retail investments in UK ISAs were attracted to social investment, that would unlock around £10bn of new finance capacity”.

Third Sector Organisations in England, including ACEVO, Social Enterprise UK (which so calls itself, when there is already a Social Enterprise Scotland) and NCVO all seem to have bought into this.

It is significant that Polly Toynbee’s Monday 16 April 2012 Guardian piece “On Charity, George Osborne must stand up to the self-interested super-rich” represented almost a lone voice in supporting George Osborne’s Charity Tax Donation capping.

All of these Third Sector Organisations said the Chancellor was wrong. Now that the Government has changed its mind, it will be interesting to see whether charitable philanthropists maintain or increase their giving.

2)SOCIAL IMPACT BONDS

Various semi public agencies, including Big Society Capital, Social Investment and Department of Work and Pensions, are prominent in encouraging the concept of a return on investment for the delivery of public services. There are now companies offering their services for measuring the impact of Social Enterprise services.
One Site, the ““The “Online Finance Degree” site makes Social Impact Bonds sound like the solution to the world’s problems:

“Essentially, SIBs are an economic arrangement between government and a private entity with the intent to resolve a specific social need and where the private entity is compensated only if a mutually agreed upon outcome is achieved. SIBs are uniquely different from other “pay for success” financial strategies. Unlike more traditional bond measures, taxpayers are not expected to pay anything unless the private entity meets its obligation”.

Bristol’s Council House was the venue for a packed Social Impact Bond Conference on Wednesday 20 June 2012, promoted by Social Finance, which Huckfield attended and which included some very persuasive presentations.

Delivering a Social Impact Bond

The presentation by Lisa Barclay on “ Delivering a Social Impact Bond ” showed “A cycle of underinvestment”:

  • Only 4% of UK health spending is on long-term preventative services
  • Budget cuts restricting services to core ‘crisis intervention’
  • Political pressure not to divert funding from core services
  • Public sector often lacks success in rolling-out promising interventions
  • Little evidence about what actually works
  • Innovative programmes seen as just too risky

Lisa Barclay continued:

  • Because complex and preventative programmes have shown particularly variable performance, there is a strong case for transferring the implementation risk to funders who have a strong interest in achieving particular social outcomes
  • By transferring implementation risk to investors, SIBs are either cash neutral in the downside case or cash positive for commissioners in the upside case

All this represents a very seductive message. If it doesn’t work out, it costs the commissioner nothing. If it does work, there is the possibility of longer term savings. The commissioner only pays for successful outcomes.

Social Impact Bonds in Worcestershire

The presentation “ Worcestershire:Exploring the Feasibility of a Social Impact Bond ” by Trish Haines, Worcestershire’s Chief Executive, was equally persuasive:

  • 107,000 people >65 years – projected to rise by 30,000 by 2020
  • 41,000 people with diabetes; 25,000 with heart disease; 15,000 with chronic lung disease; 9,000 living with cancer – projected to rise as the population ages
  • 45-50,000 emergency hospital admissions annually – cost £85mn
  • Almost 1/5 of the NHS budget is spent on last year of life
  • Council purchased social care services for >65 years covered 4,700 people in 2011 – cost £63mn”

In her “Synergy with Local NHS Acute Hospital Review”, Trish Haines continued:

  • “Aim to shift balance from acute care to community health and social care
  • SIB provides potential model to plan and fund radical change with sufficient critical mass to make an impact”

Both of these presentations – and others at the Conference – highlighted the Unique Selling Point of Social Impact Bonds – that they represent an almost cost-free and risk-free strategy for local authorities and others facing public spending cuts.

This is all persuasive stuff. While no one doubts the genuine motives or sincerity of these presentations or their enthusiasm for doing this, is this the only way forward?

As shown below in 6)CAN SCOTLAND FIND ANOTHER WAY? there are other ways of moving towards longer term preventative spending.

The following Section shows that these moves towards commissioning funded by private investment and using Payment by Results are not good for providers.

Not So Good for Providers

Throughout the Social Enterprise and wider Third Sector, alarm bells are ringing about the fragility of their structures and stability. In January 2012, the NCVO UK Civil Society Almanac reported on the generally deteriorating state of Third Sector finances:

“The UK voluntary sector is therefore estimated to lose around £1.2 billion in public funding a year by 2015/16, a fall of 9.4%. Cumulatively, the sector stands to lose £3.3 billion over the spending review period (2010/11-2015/16). All these figures depend on voluntary sector income from government falling at the same rate as total government spending”.

In February 2012, New Philanthropy Capital published its detailed survey “When the Going Gets Tough – Charities’ Experiences of Public Service Commissioning“. Though these were mainly medium to larger charities, this showed that charities are losing income and the general atmosphere of uncertainty being created:

  • Cuts to local authority funding appear to be hitting charities particularly hard, compared to other commissioners. 59% of charities say they are experiencing cuts in funding from local authorities, and 23% say that these cuts are over 20%. Smaller organisations appear to be slightly worse affected: 61% report cuts to local authority income compared to 55% of larger organisations (page 23)
  • Some charities are keeping afloat by dipping into their reserves: 62% of respondents have already used their reserves or plan to use them in the next 12 months to cover shortfalls in income (page 27)
  • Over 65% of respondents have closed or expect to close front-line services as a result of cuts. Redundancies and pay freezes are also affecting more than half of respondents (page 29)
  • Over 90% of survey respondents believe that their charity now faces greater risk. More than half (56%) believe that the current commissioning environment is much more risky for charities (page 30)
  • Charities feel they cannot compete on this basis and are often undercut by other bidders, particularly private sector organisations. ‘With the opening up of the sector to the private sector, we will continue to lose work where bigger organisations (A4E/Deloittes etc) are able to undercut and provide reduced rate services’ (page 31)

At the beginning of 2012, Dina Gojkovic, of the Third Sector Research Centre, University of Southampton, made a presentation “Results from a Survey of National Survey of Offenders – Why is Awareness and use of the Third Sector Services so low?”. This showed:

  • Almost 60% of organisations that identify offenders and their families as their main beneficiaries depend on public sources of income, which is higher than for other groups of VCS service users.
  • Additionally, almost 27% of VCS organisations working in this area reported having very little or no income at all, almost twice the figure for the VCS as a whole

This shows the fragile state of Voluntary and Third Sector Organisations working in Criminal Justice and how ill-equipped these are for future funding through Payment by Results.

These findings were reinforced at the beginning of 2012 in a further survey by CLINKS, which represents the Voluntary and Community Sector working in Criminal Justice, and published “When the Dust Settles” as an update on “The impact of the economic downturn and changing policy and commissioning environment on the Voluntary and Community Sector working in Criminal Justice”. The survey reported:

  • Over 80% of organisations surveyed have experienced a reduction in income combined with increased competition for shrinking funding sources. Respondents reported an average reduction in income from grant funding of 42%, from public fundraising of 30% and earned income of 21%. The income loss particularly affects smaller organisations, employing 1-10 staff (page 3).
  • “Widespread redundancies have continued over the last 6 months – and will continue into 2012. By the fourth quarter of 2011, 55% of respondents had made redundancies that year. 40% had staff on redundancy notice, or expected to imminently (page 6)
  • To deliver the PbR (Payment by Results) programmes, 59% of the organisations are using their financial reserves and some (14%) have taken out loans. The remaining 27% are using a mixture of finance – private funds, the Transition Fund and being paid up-front. One organisation is receiving half the contract up-front and a local authority is paying another organisation the majority of the fee with a PbR top-up. The fact that organisations are only able to deliver PbR programmes using reserves or taking out loans is limiting the number of programmes they can take on.(page 14)
  • Organisations with 1-10 staff were more affected than larger ones in percentage terms – they lost an average of 44% of their staff whereas organisations with 11-50 employees lost 24% and those with over 50 staff lost 16% of their employees.

The New Philanthropy Capital Survey May 2012 mainly covered medium and larger charities. The CLINKS “When the Dust Settles” Survey from January 2012 covered many smaller charities.

These and other surveys show that all sizes of charitable organisations have at best a precarious base on which to develop and build Payment by Results systems.

What about Local Communities?

While most of the presentations at the Social Finance Social Impact Bond Conference at Bristol on Wednesday 20 June 2012 concerned proposals at the Feasibility Study stage, a range of Social Impact Bonds is already in operation. These include:

Huckfield hopes that in some of these there will be appropriate consultation and involvement of local communities. It was notable that there was little mention during the whole Social Finance Bristol Conference on Wednesday 20 June 2012 of any need for the involvement local communities.

When one questioner asked about local community involvement, no one really answered. The only answer seemed to be was that “we consult the beneficiaries”.

While the packed attendance at the Social Finance Conference in Bristol on Wednesday 20 June 2012 shows a rapidly growing interest in Social Impact Bonds, this doesn’t show that they they represent the only way forward.

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3)CHANGING THE LAW ON CHARITIES

Hodgson Review of Charities Act 2006

With the Conservative Peer, Lord Hodgson, as its Chair, the Government is conducting a Review of the Charities Act 2006, which should report by the Summer. Lord Hodgson has a background in specialist merchant banking. His Terms of Reference include:

“Therefore, the review should take a broad approach and should seek to address these three issues: what is a charity and what are the roles of charities?; what do charities need to have/be able to do in order to be able to deliver those roles?; what should the legal framework for charities look like in order to meet those needs (as far as possible)? Note, however, that formal recommendations should relate only to the third of these”.

“In addition, within the context of the three main questions set out above, the review should consider the following specific matters, which have all been brought to the attention of the Government by the sector and others as issues requiring consideration”. These include:

h) Measures to facilitate social investment or “mixed purpose” investment by, and into, charities”

Mixed Motive (or Mixed Purpose) Investment

Lord Hodgson issued a Call for Evidence on Mixed Motive (or Mixed Purpose) Investment , which included:

“Until relatively recently, investments were generally justified as either:

  • Offering the best financial return for a given acceptable level of risk, that return being spent on furthering the charity’s aims (financial investment)
  • Offering the best way of directly furthering the charity’s aims (programme-related investment)

“However, a third category is now developing whereby the trustees consider that the investment is in the charity’s best interests even though it cannot be entirely justified on either one of these grounds alone. These investments may, however, be justified in terms of a combined or mixed financial and charitable return (provided there is no other reason for making the investment, such as private benefit). In other words, these investments will enable charities to further their charitable purposes whilst also providing a financial return (albeit likely to be a lower or less predictable financial return than a purely financial investment). Investments that can be justified on these grounds are known as mixed purpose or mixed motive investments; they will be referred to as mixed motive investments throughout this document”

The solicitors Bates, Wells and Braithwaite in April 2012 made a Supplementary Submission on Social Investment to Lord Hodgson , which included on its page 7:

“6.3 We do not believe that it is appropriate in an investment context to require private benefit to be “necessary, reasonable and in the interests of the charity” or “legitimately incidental” in the ordinary senses in which these phrases are used, for example, in grant-making contexts. In a social investment context, a charity investor is expecting to receive a return on its investment and so it would be more appropriate for private benefit to be “reasonable and proportionate” in all the circumstances

Higher Education and Reform of Charity Law

The Queen’s Speech on Thursday 10 May 2012 did not include the Higher Education Bill which the Government needs to implement some of its proposed changes following the Higher Education White Paper “Students at the Heart of the System” of Tuesday 28 June 2011 . There has been speculation on how David Willetts, the Higher Education Minister would open the door wider to private providers.

This speculation has heightened since the purchase of London College of Law by Montagu Private Equity – effectively the purchase of a Charity with Royal Charter and its transformation into a Profit Distributing Entity. Except for Oxford, Cambridge and the newer Universities formed after the 1992 Further and Higher Education Act, most Universities are also Charitable Chartered Corporations. Post 1992 Universities do not have Royal Charters and are Higher Education Corporations. They cannot issue bonds.

An expert on all of this, Andrew McGettigan, in his postings on Critical Education, has written much more on this in “Government Response – Part 3 Changing Corporate Form“.

All this means that the Government may have Higher Education reasons for the reform of Charity Law, which might enable payment of dividends or returns from private investment in Universities.

Charity Commissioner’s Farewell Speech

Dame Suzi Leather, the retiring Chair of Charity Commission, made a carefully crafted and final public Speech to the Almshouse Association Annual Conference on Tuesday 12 June 2012:

“But what really concerns me is a less tangible, less visible and longer-term challenge to charities’ future.

“Namely whether charities will continue to be able to demonstrate that they are fundamentally different from other types of organisations.

“Will charity continue to mean something special? Sufficiently unique to earn the trust the public places in charities and the privileges they enjoy?

“The past few years have seen the emergence of a plethora of new organisations from social enterprises to community interest companies, and a new emphasis on older forms, such as mutuals and co-operatives.

“The definition of these organisational forms is sometimes rather hazy, and they can, superficially, appear quite similar to charities.

“Indeed many do have a lot in common with charities – some have a social mission, some are not-for-profit, some work with and for vulnerable people and worthy causes.

“And at the same time, charities themselves are becoming ever more similar to other types of organisations.

“Charities are encouraged to become business-like, including by collaborating with corporations, and many charities have trading arms that operate much like businesses.

“Charities are also entering into new areas of public service provision, including by joining consortia with other charities and organisations to provide services say in the criminal justice system.

“None of these developments are necessarily problematic per se.

“But, collectively, they contribute to a perceived blurring of boundaries.

“….So there’s evidence that charity as a concept is not well understood by the public”.

While not in any way prejudging any conclusions which might arise from Lord Hodgson’s Review, Huckfield notes that Lord Hodgson’s Call for Evidence, the Supplementary Submission from Bates, Wells and Braithwaite, the Government’s Higher Education dilemma and Dame Suzi’s Farewell Speech all seem to point in the same direction – so that the law may be changed to permit some charities to pay dividends.

The ‘Social Profit’ Sector

A posting in the Alberta Calgary Herald about the “social profit” sector from Gena Rotstein of Dexterity Consulting on Tuesday 12 June 2012 on “The Industrialisation of Philanthropy will change the Meaning of Charity” perhaps offers a foretaste of what Dame Suzi had in mind?

“How will this affect our current social system? I think we will see a new type of charitable sector (social-profit sector), one that is not built upon paperwork filings to government, but on focusing in on the complex social issues affecting our communities (locally and internationally) and the opportunities for creating solutions that drive societies forward. This industrialization will encourage donors to move away from the question about operating budget and tax filings, to “what is my role in building vibrant communities and social systems?”

The concept “Social Profit” was derived from a piece in The Chronicle of Philanthropy on July 26 2007 “Let’s Put the Word ‘NonProfit’ Out of Business” by Claire Gudiani, which read:

“Nonprofit should be nonexistent — the term, not the type of organisation. The time is right to insist on a term that focuses on the investment, risk taking, and entrepreneurial imagination that have always been so essential to organizations that serve the social good. “Social-profit organizations” is a term that can better capture the contribution made by entities that have too long been known as charities or nonprofit groups”.

Huckfield is not at all suggesting that any of this is advocated by those pressing for Social Investment or Social Impact Bonds. These pieces are only shown here as examples of far out thinking to which some of this can lead.

What all this does demonstrate is that:

    Enthusiasm for Social Investment and Social Impact Bonds is growing rapidly

  • These will do little to ease the growing uncertainties faced by growing numbers of charities trying to deliver public services
  • An alternative or “better way” forward needs to be found – especially in Scotland, where the pressure for Commissioning, Social Investment and Social Impact Bonds is not yet strong.

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4)THE MOVE TO MUTUALS

Social Enterprise Model
The transfer from public employment to become mutuals or social enterprises – very often by a political decision since this is seen as a means of de risking and cheapening public service delivery.

This was exactly summarised in a piece by Rosie Jolly of Social Enterprise Network in Liverpool Daily Post of Thursday 07 June 2012

  • All too often social enterprise tends to be encouraged not because it makes enterprise more socially responsible, but because it puts the enterprise into social
  • This raises important questions around the current public service reform agenda
  • It is envisaged that 1m public sector staff will transfer to mutuals or social enterprises by 2015
  • Is social enterprise really the most appropriate model for public sector reform or are we likely to see social enterprises muscled out of the way by the private sector in a few years time?

No wonder Rosie Jolly’s piece concluded:

“We want to clear the mist that shrouds the term social enterprise and bring some clear eyed objectivity to the debate. Debate will naturally remain about what constitutes a true social enterprise, but perhaps JM Keynes got it right when he said: “It is better to be vaguely right than precisely wrong.”

Rosie Jolly’s piece in the Liverpool Daily post appeared on the same day on which there was a Cabinet Office Announcement about £19bn additional Department of Health funding for Social Enterprises:

“Alongside this work, the Department of Health is also announcing a further investment of £19m over the next year for Social Enterprises, on top of the £100m already invested by them over the last 5 years. The money will be used to support frontline staff to run services that provide what their local population really need”.

The Cabinet Office Announcement of Thursday 07 June 2012 continued:

“On the extra funding, Andrew Lansley, Secretary of State for Health, said:

“We have already seen 600 Social Enterprises within the NHS offering staff more freedom and giving patients more tailored health care. The extra funding announced today will help roll out more of these services across the health service and shift power and control to frontline workers.”

Francis Maude, Minister for Cabinet Office, said:

“The team from the Department of Health know how Rights to Provide work and will bring valuable expertise to the Cabinet Office as we roll out these rights across government. Now is the time for entrepreneurial public servants to take the initiative and push for ownership.”

This Section concludes with a gentle reminder to Huckfield’s first Killing Social Enterprise Softly, from which this is an extract:

Teach Yourself Lansley

What the Department of Health might have in mind was in the Guardian’s signposting on Thursday 02 March 2012 to John Lister’s “Teach Yourself Lansley“. This defined Social Enterprise as follows:

“Social enterprise: (oxymoronic noun) interim nonprofit private provider paving the way for proper private takeover”

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5)THE RISE OF THE INTERMEDIARIES

Investment and Contract Readiness
There are a growing number of intermediaries taking their percentage out of “structured investment products” for investment in the sector.

Under the Investment and Contract Readiness Fund, The Social Investment Business now offers grants between £50,000 to £150,000:

  • “to purchase specialised investment and contract readiness support and to cover some of the costs of putting the investment or contract readiness plan into action in the social venture itself
  • “Specialist support from an approved investment and contract readiness provider with a track record in supporting social ventures to secure social investment will be a significant proportion of what the fund offers”

Approved providers include:

  • ClearlySo “- which provides corporate finance and financial advisory services to social businesses and enterprises
  • Locality – the network for community-led organisations
  • Resonance – a boutique corporate finance intermediary specialising in social enterprise and impact investing, and
  • Social Finance – providing a range of financial advisory services to help build the social investment market.

The Measurers

As Matilda Macduff said in her New Philanthropy Capital blog “The Power of Thinking Positive” on Tuesday 12 June 2012:

“Small charities can, and do, measure their impact very successfully, making use of the wealth of free data and resources that are already out there”.

“When we analysed Elmore Community Services in Oxfordshire way back in 2008, for example, we were very impressed with its impact measurement, highlighting it as an example of good practice on our website. The charity had a turnover of less than £500,000, and ten staff members. Despite the challenges—its work is complicated, supporting vulnerable people with multiple problems who often fall through gaps in provision—the charity had an excellent track record of measurement. It uses the Outcomes Star to track changes in clients’ lives, demonstrating improvements across various areas such as housing and mental health. And more importantly, it uses this data when thinking about how to improve services and make its work more effective”.

Elmore Community Services is an excellent example of a quality organisation delivering excellent services. But in continuing with this posting, New Philanthropy Capital gave the game away in “The Power of Thinking Positive”, by Matilda MacDuff on Tuesday 12 June 2012:

“Measuring impact is important because it allows charities to think about how they can make their work better, help more people, and have a bigger positive impact on society. And it helps funders to channel their money to the most effective charities, so they ensure it makes the biggest possible difference and doesn’t go to waste”.

In other words, measuring impact helps to show investors the returns they might make.

Financial Intermediaries

is a good example of the financial intermediaries which are springing up.

“Our vision is to become recognised as the key driver of young philanthropy in the UK, to represent multitude of Syndicates across the UK and to become renowned for the quality of our Young Philanthropy Networking events. By the end of 2012, we aim to have over 15 Young Philanthropy Syndicates up and running, with an investment portfolio of over £100,000”.

The Social Stock Exchange (SSE) seeks to become a Financial Services Authority (FSA) authorised and regulated investment exchange for the trading in securities of social enterprises and other social purpose businesses. It will become the premier trading venue for social businesses wishing to raise risk capital and for social impact investors who wish to find global businesses that reflect their values”.

If the growth of Financial Intermediaries continues and the proposed Social Stock Exchange develops, Huckfield wonders how long it will be before we see the social version of Investors’ Chronicle or “Money Week“.

The only difference between other financial institutions in the City of London and what is described above is that somewhere in the title “social” usually features.

6)CAN SCOTLAND FIND ANOTHER WAY?

Public Social Partnerships

The Scottish Government funded the Public Social Partnership Project as part of the commitments it made in the Enterprising Third Sector Action Plan 2008-11. The Project, involving 10 pilots was delivered by PricewaterhouseCoopers LLP, in conjunction with Forth Sector Development. All this followed some pioneering work by the EQUAL Social Economy Scotland Partnership in 2007, which featured the Renfrewshire Alternative Procurement Project, the Public Social Partnership Recycling Initiative and the Edinburgh ILM Project as PSP initiatives.

In July 2011, the Scottish Government published a detailed “Practical Guide to Forming and Operating Public Social Partnerships

The Executive Summary of the Guide on page 4 says:

“A PSP differs from other commissioning approaches in that it starts with the need to be addressed, not the services available, which can often be the driver for other partnerships. A PSP typically comprises three stages:

  • Third sector organisations work with public sector purchasers to design a service
  • A consortium of public sector and third sector organisations may conduct a short-term pilot, helping to refine service delivery parameters
  • The service is further developed to maximise community benefit before being competitively tendered

“PSPs can enable the delivery of public services more efficiently and with more person-centred outcomes for users of services, by putting co-production at the heart of service design. As well as the centrality of co-production, PSPs have the added benefit of giving all partners the opportunity to test out new service designs through piloting. This allows operational issues to be addressed and user feedback to be incorporated into the final design of the service.”

While none of this means that a Third Sector Organisation may get the delivery contract, it does enable the exploration of a wider range of issues than in Social Impact Bonds. This also means that local community interests are also considered.

Results shown in the Practical Guide to Forming and Operating Public Social Partnerships include:

  • Changes in the scope and purpose of an Edinburgh City Council Care at Home Services tendering
  • Greenlink SROI, which showed a social return of £7.63 for every £1 invested
  • St Mary’s Place Guest House, which showed a social return of £6 for every £1 invested

These are early results and there are Public Social Partnership Projects still being evaluated. These will feature in further Huckfield briefings.

A Community/Social Enterprise/Third Sector Bank for Scotland?

Huckfield is an enthusiastic supporter of proposals for a separate Community/Social Enterprise/Third Sector Bank in Scotland, which would operate in a different way from Big Society Capital. The Bank would be owned by the sector and supported by organisations and individuals with similar values. Huckfield would also like to see Housing Associations and other similar organisations involved.

7)AN ALTERNATIVE TO ‘SOCIAL TURBO CAPITALISM’

Huckfield apologises for the length of and the details in this posting. Examples in Scotland are at an early stage and have a long distance to travel.

The conclusion is surely that just because a kind of “Social Turbo Capitalism” is emerging in England, in this Age of Austerity we should be examining the alternative ways forward in Scotland.

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