Matt Little Muses: Talking of social enterprise...

With social enterprise, social purpose and public services all big news recently, RIO director Matt Little puts pen to paper to share his thoughts.

As a director of a social enterprise working with children and young people, the last month has given me enough material to write a thesis rather than a blog – or, indeed, an airport novel given some of the twists, turns and characters involved.

It’s also been interesting to watch some of the issues and challenges that we grapple with day-to-day hit the national press and provoke general public reaction, rather than simply intense debate within the sector and the #socent streams on twitter.

Employment

So, where to start? It has to be employment first. The travails of former head of Action 4 Employment (A4E) Emma Harrison and the Work Programme have been well-documented elsewhere and while I don’t want to rake over the same coals as Patrick Butler, I will give them a gentle poke, noting in passing that we’ve had similar (and pretty grim) experiences with some prime contractors around the Work Programme as those set out in Patrick’s article, which is well worth a read.

There is a heady and toxic mix of elements billowing around in this space right now, from radical and rapid reform to not-quite-thought-through and untested payment by results (PBR) models, from the blurring of public and private to and deeply human foibles. Throw in scope for large profit on top of this lot and it’s like petrol on a bonfire.

This is all doubly strange for me because, whilst at primary school in Sheffield, I went on a school trip to Thornbridge Hall – the stately home that has since become Emma Harrison’s house. I swear I saw my first and only ghost during the visit and as a result now apologise to Ms Harrison for the orange squash in a Tupperware beaker and the broken Breakaway she may have found under one of the chairs upon moving in…

Health

Next, to the health sector, where there are very similar battles underway. Someone, somewhere must surely understand exactly what is really being proposed via the NHS reforms – if so perhaps they can explain it in practical terms please? The Guardian Society provides the best guide I have seen so far, but even then it is still a stretch…

While Charlie Brooker’s exploration of competition in the NHS is – unsurprisingly – the sharpest and funniest take I have seen.

The debate playing out in the media seems to be one of rhetoric and ideology (‘public’ or ‘private’) rather than what is ‘better’ for the person in the street, which makes it almost impossible to explain to said person on the street.

It feels, too, like we are trying to reform the health service using exactly the same methodology and rationale as deployed in reform of education, social care and unemployment practice – yet they are such different areas, functions and systems. You would not develop, innovate and reform at Apple in the same way as at BP or Virgin. I hope we don’t all live to regret this one but I have a nagging feeling that we will.

Education

And, finally, to young people, schools and education. This is the area closest to our heart at RIO, and a space we have been working in for a number of years. Our big picture belief is that if we want the world to be better place, we have to focus on children and young people, and we have to work with enough of them all at once to enable positive systemic change to take place.

Through our work we have also seen time and again that children are superb and natural social entrepreneurs. They have great ideas, they question the status quo and innovate, they have a very strong sense of ‘what is fair and right’, and – when permitted - they make real change happen.

So how do we draw on these natural skills and encourage young people to be even more socially entrepreneurial? In the social enterprise sector there is lots of great work carried out with children and young people internationally; but not much of it has scaled or spread. It tends to focus more on particular target groups, communities and individuals, rather than driving structural change, including though the educational system. We hope that our own work with schools and the development of the Social Enterprise Qualification (SEQ) will begin to redress this balance a little bit.

But, while this is a great start and something we at RIO are very proud of, just recognising, encouraging and accrediting young social entrepreneurs isn’t enough. If we really want to shape a whole generation of socially minded and enterprising young people, we need to have socially minded and enterprising schools too.

Unfortunately, in many countries, schools have developed or changed very little over the last century; we see the same timetables, curriculum subjects, architecture, roles and approaches. As a result, schools are too often places where young people are trammeled and prepared for a tired old world rather than places where their fire is lit to bring about a better one.

Ironically, this is not to say there is a shortage of ‘change’ in schools. Most people will be familiar with the current thrust of education and schools policy – with the rapid advent of academies and free schools. These are fundamental and radical shifts, with more to come. But they relate more to organisational form than the essence of what happens within the walls of these structures, and, most importantly, the nature of the young people we want to emerge from them.

As yet, schools themselves are also not familiar with social enterprise, either as an ethos or as an operating model. But they need to be, and arguably have much to gain to if they do follow a more socially enterprising path: they have significant building, capital and human assets; in many communities they are the most significant locus of social capital (visit an open and well run primary school at the end of the day and just watch…); their budgets are under increasing pressure and could be worked very differently; and they are gaining new freedoms as a result of the above reforms.

At RIO we think there is massive potential where schools and social enterprise meet; there is certainly a healthy marriage to be made between the two, but it needs to be based on solid foundations (and not just a convenient coupling.)

The Policy Exchange

One of the few references to social enterprise and schools cropped up in a recent report from The Policy Exchange, which drew some attention with its focus on the public-private tension in education, but probably not enough in my opinion.

It was featured on Newsnight, but did not ‘catch’ in quite the same way as the debates around employment and health – perhaps because the changes being talked about feel a bit further away? Perhaps, too, there is only so much debate about public, private and social enterprise the country can take at any one time (or at least that portion of it who read blogs and watch current affairs late at night)…

Unfortunately, I think there are some significant issues with the definition of ‘social enterprise’ deployed in the Policy Exchange publication. Social Enterprise UK responded well and passionately about this. As Peter Holbrook points out in that response, while social enterprises seek to make a profit, they reinvest it in the business, which exists not to enrich owners and chief executives but to serve the communities with which they work. ‘A private company simply reinvesting 50% of its profits back into the business does not make it a social enterprise.’ There is a risk that the use of the term in this context becomes a fig leaf similar to A4E’s warm-glow definition of itself as a ‘social purpose’ business.

Above and beyond the definition issues arising here, public education and distributed profit is a potentially lethal and combustible combination for many other reasons.

At a basic human level, dividends, pay incentives and financial bonuses are not necessarily good or effective tools to motivate a workforce. If you ask people who work for social enterprises, the drive comes from ‘making a difference’. This drive leads to constant effort ‘above and beyond the call’, to innovation and effectiveness.

In a profit-driven educational system, some children will clearly be less profitable than others, just like some jobseekers. What happens to them and what risks are they exposed to? Similarly, once parents positioned as consumers rather than partners in the educational process, those with the most purchasing power and the loudest voices tend to shape the system to their own ends.

Similarly, what would successful outcomes and service definitions look like in an educational context (and therefore how would payments to providers be structured?)  Payment by results, or anything approaching it, only works if it is possible to specify and agree what good, clear and successful outcomes look like. The private sector is brilliant at producing the outcomes required by a contract – so if we don’t get the outcomes right in schools we introduce perverse incentives into the system and they will then run amok.

Attainment would presumably be part of the picture here. But we all know deep down that exam attainment is a pretty poor surrogate for healthy, rounded, enterprising, happy, well-balanced and well-educated children and young people and it is surely the latter outcome that we really seek from an educational system.

At a more practical level, to what extent do we want to throw the curriculum and examination systems open to private influence? This is a highly sensitive area; one false move and public trust in the system crumbles, and in an even more far-reaching and serious way than any DWP investigation of Work Programme outcomes and providers.

Socially Enterprising Schools in Action

We also need thought around business and market failure in relation to schools. As with care homes and banks, we seem to be constructing services and systems where we privatise profit and gain, and we socialise losses…and this does not feel fair at all.

To give a practical example of some of these tensions, we are working with a number of schools and supporting them to introduce more socially enterprising approaches to their catering and food needs. We are finding that schools are often tied into large private sector catering contracts. By and large these contracts produce the right numbers of meals and calories at the right times, to scale, and with a decent profit margin for the company involved. Distributed profits from these contracts then ‘leak’ from the system as dividends and other forms of payment and reward to directors and shareholders.

But the catering services don’t necessarily produce: a strong and vibrant food culture within the school; children and young people with a positive attitude towards diet and nutrition; the ability for the school to grow and cook its own produce as part of the supply chain; or scope for local suppliers and the community to get involved.

None of this is necessarily more expensive at school level. It may even deliver better social and environmental value, with resulting savings to the public purse if it leads to healthier children in the long term. It all depends on the scope, ethos and imagination of the contract and specification in the first place.

As an aside, let’s hope that we can now begin to see more public service contracts encapsulating this type of relevant social and environmental value as a result of the hard won Public Services (Social Value) Act.

But most of all, when it comes to social enterprise schools, I think we need to think about much more than organisational form (mutual, charity, public, academy, free, private, trust, foundation…) and ensure we also focus on teaching and learning. Evidence suggests this is often far and away the major factor in driving up overall standards and quality in educational systems.

And here, in terms of curriculum content, teaching and learning, is where social enterprise has most to offer. Social enterprise can provide a school with an animating and energising set of principles that both solidly ground it and help it fly, from how it is organised and run to the content of its curriculum, from how it sees and uses its assets to how it relates to its wiser community; and from how it sources its food and feeds its pupils to the positive difference its young people make because of the interesting, real and meaningful work and learning they do in lessons.

Here’s to young people as real social entrepreneurs and to real social enterprise schools – they go hand in hand…