No, nationalisation is not social enterprise scaled up

****

Some people really don't understand the 'enterprise' thing at all do they. Here's a chap called Robert Ashton (who describes himself as a "social entrepreneur"):

I happened to be meeting a local MP who had read the blog that morning. He said that whilst he largely agreed, and knowing Jeremy Corbyn felt he was a decent chap, he said that on one thing I was wrong: Corbyn he said doesn’t champion social enterprise, he champions nationalisation.

I’ve been reflecting on that comment ever since and conclude that the only difference, in an ideal world, between nationalisation and social enterprise is scale.

This is, of course, manifestly untrue. The point about social enterprise is that it is a business that, in providing a valued service or product, also makes a wider social contribution. Indeed Robert describes such a thing:

Yet now that school campus is managed by community cooperative organisation. Led by local people, the site now hosts a wide range of community groups; the canteen is now a thriving cafe and new organisations are moving in to the town, renting space, creating jobs and making a lasting difference to the lives of those who live there.

Nationalisation isn't anything like this. It is the forced creation of a state-owned monopoly designed primarilty to promote and protect the interests of that monopoly. The reason why socialists are so keen on nationalisation isn't because it leads to better business or makes a lasting difference to people's lives - it's because nationalisation allows the government to organise business and industry in the interests of the workers (i.e. those who are employed in the nationalised business).

Robert's question as to whether government is a social enterprise is more interesting. But nationalisation is a different matter - its main impact is to destroy social value rather than create it.

...

Defining 'social enterprise' - the next pointless challenge for our lawmakers!

****

Our masters, having set about trying to define "sustainable development" and now being urged - by Hazel Blears no less - to set out a legal definition of that tricksy term, "social enterprise":

Former Communities Secretary Hazel Blears MP has called for a legal definition for social enterprises, while minister for civil society Nick Hurd has conceded that such a definition may be required. 

Hazel Blears went on to refer to the "social enterprise sector" - showing just how much momentum there is behind this need for definition.

It seems that Hazel is concerned that wicked and evil capitalists will sneak in by calling themselves "social enterprises" thereby tarnishing the principle that the tern enshrines (or something like that).

I stick firmly to the view that all businesses - indeed every enterprise whether constituted or not - has to be 'social'. What should concern us isn't to try and separate the enterprise sheep from the enterprise goats through some form of legal definition but to focus instead on ethics - on whether the enterprise behaves ethically.

And the core elements of ethical business have nothing to do with the chunterings of "fair trade" - these are essentially political considerations - but concern the way in which the business operates. Does it comply with the law? How well does it treat those who work for it? Does it 'exploit' - through deception or dissembling - its customers, shareholders or investors (and this group would include donors)?

Such matters relate to the moral standing of the business - its managers, its directors and its owners - rather than to the precise legal structure adopted. It is nonsense to suggest that defining an operation as a "social enterprise" suddenly waves a magical wand over its affairs thereby making it a paragon of ethical virtues.

There are some enterprises where the operation of the business delivers a wider social purpose - Remploy, Jamie Oliver's, Fifteen restaurants and Bradford Councils-owned, ISG are examples - but whether these are established as for-profit businesses owned by shareholders, charities or some other legal structure is of no consequence.

The point and purpose of Hazel Blears call is to allow government to create a set of favoured organisations - "social enterprises" - that can be granted preference in bidding for contracts within, for example, the NHS.

....

Charity isn't independent so long as it takes the government's cash...

****

It may be the effect of opposition but Labour folk are keen to see the "third sector" distance itself from government. Here's the fresh new MP for Wigan:

"The Labour government treated the third sector like a third arm of the state and I was troubled by that," she said. "I thought it was problematic. Delivering government services means you have to agree with the government about how those services should be run."

As they say, Lisa, 'he who pays the piper calls the tune'!

Despite this the sector seems ever more conflicted over its relationship with government - sure, charities, social enterprises and such want to be 'independent' but they also seem to be firmly attached to the teat of public money. You cannot have it both ways - you can't take the government's money and then campaign against that government's policies.

So if you want an independent voice of advocacy on behalf of your beneficiaries then stop taking the government's cash, stop being sub-contractors to the state and raise your money privately from people who actually support your aims. Simple really!

....

What's the point of social enterprise then?

****

The "third sector" often tells us how much more caring and socially aware it is. How the ethos of "not-for-profit" is so much superior to the dog-eat-dog world of for profit business. And, of course, how they're not in it for the cash. It seems they lied - or that's what is implied by these words from top Scottish social enterprise bod, Laurence Demarco:

“When you are paid if you get results, you will be inclined to select people who will give you a result, which will lead to whole groups of people which no-one will work with - it's inevitable,” he warned.  "I'm surprised at the lack of outrage from voluntary sector leaders."

So the voluntary sector - all those well-paid "leaders" to the fore - isn't interested in doing things voluntarily or being incentivised by delivering outcomes that benefit people? And, so long as the payment exceeds the cost, the market (for that's what it is) will continue to find people to help - only when either there's no-one left requiring assistance or the marginal cost exceeds marginal income will things stop.

But if you're a social enterprise - not-for-profit and all that jazz - this boundary doesn't matter. After all you have huge margins on helping the easy-to-help clients that, because you're not paying evil shareholders, you can invest in subsidising support to the really hard-to-help people.

That's the whole point of social enterprise, surely?


....

Let me introduce you to real social enterprises

The world seems full of folk claiming that “social enterprise” is the way of the future. And, in doing so implying that good old-fashioned businesses – you know, the ones where I make something and sell it to you or do something because you pay me – are somehow “anti-social”.

Now I have no problem with how people organise their businesses – as a consumer I care only about the nature and quality of the service or goods I receive. Well that’s not entirely true – I’d also like them to behave ethically. But that doesn’t mean not taking a profit, not paying themselves well in recompense for the risks taken or not having shareholders. And it doesn’t mean having a “social mission”, it doesn’t mean “fair trade”, it doesn’t mean not owning shares in oil companies or aerospace manufacturers. These are just elements of a marketing strategy based on political positioning.

An ethical company is one that doesn’t mislead people about its products or services, that operates within the laws and mores of the country, and that seeks to exceed the service expectations of customers. Nothing more.

And, you know, all but a tiny handful of for profit businesses behave that way. These businesses are as ethical – perhaps more ethical – as all the Co-ops, so-called “social enterprises” strutting around out there saying “look at me, aren’t I the good boy”, and “third sector organisations” trying to pretend they aren’t really just government subcontractors.

There is nothing – absolutely nothing – more social than the market. The market requires people to engage, to interest, to participate. The market encourages people to compete, to create, to exceed expectations and to take risks. And the market also promotes co-operation, innovation and partnership. Businesses operating in a free market are social organisations – however they choose to govern themselves. These businesses have to interest themselves in their customers – what they want or need, what there problems may be, what help they might require. They are real social enterprises.

...

Regeneration: just give us the money and go away...it'll be good!

.
David Barrie runs a company that does this:

...designs, directs and consults on initiatives that enable transformational change and capital growth in cities and communities

Anyway David Barrie knows a lot about regeneration and has said in his blog that: Urban regeneration needs a new narrative

I’m not so sure what we need is a “new narrative” (whatever that means) in regeneration but rather a considered review of the economic geography underlying the continuing challenges that face us as a society. And to ask whether the acronym soup managing regeneration – RDAs, HCA, BURA, CLG, LOCOG, LGA and so forth – are helping or hindering the process. And to ask at what level we deliver regeneration and for whom.

The truth of economic geography
If you map the poorest places in England in 1968 – when as we all know “poverty was rediscovered” and urban regeneration began – and compare that map to the poorest place in England 40 years later there is an enormous overlap. All those carefully targeted regeneration millions have served to change very little. The Joseph Rowntree Foundation produced such as study, “Poverty, Wealth & Place in Britain: 1968-2005” – and on page 38 of the main report are a set of maps that should make every regeneration guru and poverty campaigner hang their heads in shame. They demonstrate that our chosen preference in regeneration – targeting extra cash resource (controlled by us regeneration experts) towards carefully defined “deprived” places has failed.

To illustrate this let me tell you the story of Robert Brown. Robert’s from inner city Leeds - born in Harehills and brought up mostly in Chapeltown. When I knew him as a young ideological researcher he always swore he would not desert his “roots” and would stay in Chapeltown. Some while later I ran into Robert again – and where was this older, more successful researcher living? Harrogate. And why? Because he had a family and didn’t want the risks of bringing them up in a place with violence, drugs and crap schools.

The hindrance of the agency
Regeneration agencies are too often arrogant, directed by central policy not local need and subject to the problems that come with manipulation for local political gain. No matter how we try to be inclusive, to allow “participation”, we end up with a load of initials competing and coalescing in a mad world of bids, paperwork, reporting and review. A mad world that keeps many of us in well paid jobs trying to translate that gobbledegook so ordinary people can understand it better (or maybe at all) - and maybe get just a little benefit from all the spending.

OK I hear your mutterings: “Simon’s an elected member and would say all that. He just wants to be in charge, that’s all.” (As an aside when did this horrible term “elected member” come into vogue? The word you want is Councillor – simple, eh!). Well no – I would like ordinary folk to be allowed to get on with stuff, to be supported and to make their own choices about the places where they live. Not to have choices foisted on them by well-meaning apparatchiks who have no real or long-term interest in that local place. And bear in mind that – unlike all the regeneration gurus – I have to put myself up for election.

In his blog David Barrie tips us “new mutualism” and public service partnerships. These all sound very grand – the John Lewis approach (a good piece by Janet Daley in today’s Sunday Telegraph on this). But the flaw in this line is the continuing denial of a role for competition. John Lewis succeeds not because it is a worker-owned business but because it is good at what is does in a very competitive market (and please can we stop calling it a social enterprise – it’s no more one of those than Tesco - it makes profits and pays dividends to its owners; it's what businesses do). Government – and the regeneration moths fluttering round its every word – obsess about structures, business models and processes. Just give communities the money and trust them to do good work with that cash - and work for those communities not big agencies, consultancies or on the development of important national strategies.

Consumer-led regeneration avoids producer capture
We do not need assorted RDAs, we do not need the HCA or the TSA or any of the regeneration quangos. And we don’t need national strategies, regional economic strategies (all of which are the same any way) and all the paraphernalia of modern regeneration. We also need to stop listening to Eversheds, CBRE, DTZ and all the other private consultancies. They’re very clever but just want to get nice big consultancy contracts when all is said and done. These are producers not consumers of regeneration.

This producer capture of regeneration delivery (and indeed all services operating outside a competitive environment) is the problem. Changing the organisational model changes nothing unless it increases the power of consumers (that’s you and me folks) – it may create a different set of winners and losers among those producing regeneration services but it does not produce a “new narrative” let alone better outcomes for poor people and poor communities.

A real new narrative would be to see regeneration delivered by community groups, entrepreneurs, parish councils, sports clubs and groups of people who just want to see something done. Do you think all the important acronym-loving folk in the regeneration industry would let us do that? Please - we'd be good!
.

What the hell is a social enterprise anyway?

David Floyd (beanbags and bullsh!t) presents a witty little contribution to the debate about the “social enterprise” badge being promoted by Rise asking what all the fuss is about and why such a badge – the “social enterprise mark” – is needed.

As it happened I had been talking with a colleague about how much I hate the term “social enterprise” oozing as it is with superiority and smugness (although my distaste for this term is dwarfed by my loathing of the term “third sector”). Are all the world’s other enterprises anti-social just because they have the gall and cheek to make a profit?

Now it seems, some organisations that fit a preordained set of requirements can stick a shiny new badge on their headed paper declaring to the world that they have achieve the elevated “social enterprise” status! Well forgive me for not sounding my horn or waving flags to celebrate this new initiative.

We need to drop the wholly artificial distinction between a “social” entrepreneur and the ordinary run-of-the-mill sort of entrepreneur. It always was a nonsense, it belittles the creation of value (or rather places greater emphasis on one type or measure of value) and shoves aside the vital importance of private enterprise in making places work.