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16 November 2010: Guardian Social Enterprise Conference

  • Last modified date:
    10 March 2011

Check against delivery

Anyone who steps foot in a John Lewis or Waitrose this Christmas is likely to leave it with the knowledge that employee ownership works.

For the John Lewis Partnership, it works on the shop floor, where morale is high, staff turnover low, and customer satisfaction among the best in the business.

And it works at the board room too, where profits exceeded £300 million last year, meaning that every partner sharing a £150 million bonus pot.

Of course, John Lewis isn’t alone. Across the corporate world, employee engagement and staff ownership are increasingly seen as attractive models for business.

Earlier this year, a report from the Cass Business School gave academic credence to commercial reality. It found companies owned by their employees are more resilient and more agile in the face of economic challenge.

It works for the private sector. Can it work for the public sector?

Well, we think there’s a lot to be said for employee-owned organisations in health and social care.

A hearts and minds business

Healthcare, like retail, is a hearts and minds business.

Good care is built on a strong relationship between clinician and patient. Where clinicians are motivated and armed with the capacity to improve services then you get better results.

And we know from the experience of places like Sandwell that where you increase staff empowerment, you also get better staff morale.

In Sandwell, for instance, they saw a dramatic fall in staff absence and a huge improvement in staff turnover as a result of corporate change.

So the evidence is clear. The more we can strengthen the bond between the individual and the organisation, and the more we free up health professionals to innovate then the better for everyone.

And that insight lies at the heart of my proposals for the NHS.

I came into office with a very clear sense of how the Health Service needed to change.

After a decade of micro-management, we needed a clear and consistent policy of decentralisation. To devolve decision-making. Escaping from the view that change can only happen through Government edict.

And, in the NHS White Paper, we set out our plans.

For an NHS where patients are given more choice and information, so that there is ‘no decisions about me, without me’

Where clinicians are liberated, free to exercise their professional judgements, and shape the way their organisations run from the grassroots.

And where the focus is not on bureaucratic process or Whitehall mandates, but on the task of securing the best outcomes for patients.

Foundation Trusts are central to this. I’ve made it clear we want all trusts to become Foundation Trusts within three years, and we’ll help them to do so.

Now some have questioned whether they’re social enterprises in the strictest definition.

Let’s avoid that debate today.

What matters is that FTs continue to live and breathe the principles and values that make social enterprises so compelling.

I mean the principle of social purpose, of engaging with communities and investing any surpluses to improve care and broaden services, rather than distributing proceeds externally.

And the principles of independence and freedom – that by freeing themselves from Whitehall interference, FTs can empower staff to make the right decisions for their patients, thereby unleashing the creativity and collective endeavour that’s so key to 21st century healthcare.

And so, for instance, we want to build on the potential for service line reporting, where clinical leads in a department get the financial information they need to take full control of their team.

We are still consulting on the future of Foundation Trusts. There have been many good, constructive responses to the consultation, which we’re now considering. And we’ll be announcing our intentions very shortly.

But certainly I can tell you this now. We want to give Foundation Trusts more freedom. And we want to embed core principles that are consistent with social enterprise models.

Right to request

So, a simple aim, a consistent agenda. Promoting greater staff leadership, better employee engagement, and a clear and consistent social purpose.

Foundation Trusts are one way of doing this for the acute sector – and as more Trusts take on foundation status, so we will see the character and vigour of social enterprise becoming an increasingly prominent part of the NHS’s DNA.

And in the primary and community care sector, we’re pursuing a Right To Request programme, where staff can make a request to the PCT to form a social enterprise.

And today we announce the third wave of organisations that will be making that transition.

Thirty-two more NHS organisations will now become social enterprises through this programme – more than doubling the number who made the transition under the first two waves.

It reflects a new pace and urgency to this reshaping of NHS services. The last Government was hesitant, and towards the end openly hostile, towards independent sector involvement in healthcare.

We take a different view. We see this type of independent provision, not as an ideological threat to public services, but as a practical means of supporting the ethos and values that sustain the NHS.

Value of social enterprises

And the clinical leaders involved in Right to Request express the potential far better than I can.

They talk of how social enterprise “unlocks goodwill, improves morale, helps to promote exemplary care”.

Or how it “keeps staff on board and raises the aspirations and personal responsibility of staff and service users.”

And how it generates ‘social value’. That by engaging more deeply with the local community, you can start to find new ways of filling gaps and meeting the needs of the most vulnerable.

And in size and scope, the range of organisations involved is vast. Turnover from £100,000 to £100m. From just four to three-and-half thousand staff. Covering a full range of services, including whole provider arms and individual services. From drug treatment services in Wakefield to homeless healthcare in Leicester, to family nurse partnerships in Derby.

It’s another addition to a growing family. Alongside the Right to Request organisations, there are also about 6,000 social enterprises involved in delivering health and social care services – all of them pushing the boundaries and exploring new ways of delivering support.

Open Door in Grimsby is a typical example. It’s a 24/7 service supporting some of the most vulnerable and excluded people in the community. Drug users, sex workers, homeless people.

It encourages them to come in, to see a doctor, to get treatment, without barriers, without boundaries, without judgements. There’s no CCTV, no locks on doors, no suspicion. A genuinely open culture that puts people at their ease.

But it goes further than this. One of the big issues facing all of these service users is their financial security. Many of them can’t open a bank account because they don’t have a fixed address.

So the other thing Open Door does, through its relationship with a major high street bank, is provide clients with the opportunity to open a bank account.

Not a conventional service you’d expect from a health organisation. But it makes a big difference. As the very name of the organisation suggests, it opens doors for the service user. Allows them a way forward in their lives.

Promoting social enterprise

And that’s the sort of lateral thinking we need.

If we want to make the breakthroughs in preventing illness and reducing demand on acute services, then we need to start challenging conventions about what a health or a care organisation does.

We’re already making a move in the NHS to a payment system which demands that services look out across the whole community.

That means health services will need to think not just about initial treatment, but the whole outcome of treatment, including rehabilitation and long term recovery.

And you can only do that if you have flexibility and variety in the system, if the latitude is there for organisations to look beyond old models of care.

That’s why our ambitions stretch beyond Right to Request.

There is now a clear, unambiguous policy shaping NHS commissioning.

No more preferential status for any one type of organisation. Instead, genuine diversity and plurality. A system that gives any willing provider a fair chance of competing for NHS contracts.

Too often this policy has sparked frenzied accusations of ‘privatisation by stealth’ in the NHS.

Yet as social enterprises up and down the country show, you strengthen, not undermine, NHS values and patient choice by opening the door to diversity and plurality.

So, from my point of view, we’re determined to press on, to open up new opportunities for social enterprises and to extend Right to Request style models to other parts of the health and care system.

A new Public Health Service, rooted in the principle of local, community-based action, will lend itself to social enterprises – as will the proposals we’re working on to improve mental health.

And the vision for social care that we’re publishing tomorrow will advocate plurality and partnership in a sector that is already a rich and fertile ground for social enterprise.

Only a few days ago, I announced plans for new Social Work Practices.

These will give greater freedom and control for a profession that has been particularly hard-hit by the bureaucracy and micro-management of recent years.

Pilots will look at how social workers could form independent organisations, contracted to local authorities, and working across health and social care to secure better outcomes for service users.

Dealing with barriers

So where next? Well, we still need to break down the barriers to entry. We know there are tricky issues around funding, around tendering processes, around transfer of employee rights.

We are looking across Government to find the right solutions. Francis Maude will be telling you more about this tomorrow.

But today, I can announce that I’m adding an extra £4.4 million to our Social Enterprise Investment Fund.

This will be used to support Right To Request organisations through transition, as well as helping to set up other social enterprises from outside the NHS.

The bottom line is we need innovation. We need to mobilise the workforce and carry people with us in delivering the reforms we’ve set out.

Social enterprise is a powerful and proven model for change.

It’s something I passionately believe in, and I look forward to working with you to expand the sector and derive more benefits for patients and service users in the months and years ahead.

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