One of the more tiresome criticisms we as anti-cuts campaigners face is the accusation that we are being negative. The fluffy term “social enterprise” has been intensively promoted by those in power along with the idea of a “Big Society”, but the awful reality is beginning to reveal itself.
Last week the Guardian and Financial Times reported that the first employee-owned NHS social enterprise “spin-out”, Central Surrey Health (CSH), has failed in its first attempt to win business in the NHS market. CSH, which provides community health services in and around prosperous Epsom, Leatherhead and Dorking was created back in 2006.  It received the first ever “Big Society Award” from prime minister David Cameron, but has lost out to a private company Assura Medical (majority-owned by Virgin Healthcare), which has been named as preferred bidder for a £500m contract for community services in south west and north west Surrey.

Nicholas Timmins, the FT`s Public Policy Editor wrote that:
“(Cabinet Office minister) Francis Maude’s favourite social enterprise has lost out to a commercial organisation in a bid for NHS services that has sent shivers through the sector.”

Maude had previously said that:
“The Coalition Government’s vision for a Big Society is about taking power away from bureaucrats and supporting people on the ground to get on with the job. There are thousands of front-line public sector staff who can see how to do things better. I think this can become a real mass movement that will result in better services at less cost. We all know there’s less money to go round these days but staff at Central Surrey Health show that more can be done for less.”

(this is in sharp contrast to the Private Finance Initiative – started by the Tories in 1995 – which has consistently done less for more, with no pretence of staff involvement!)
CSH`s 700 staff each hold a £1 share in the non-profit distributing organisation, which holds a £20m a year contract from the local NHS. Mr Maude, has dubbed them “my poster people” in his drive to get a million staff to leave public sector employment to sell their services back to the NHS and others.

Reacting to this worrying development, Peter Holbrook, Chief Executive of Social Enterprise UK, said:

“If Central Surrey Health, the government’s flagship mutual social enterprise, which has demonstrated considerable success in transforming health services and increasing productivity can’t win, what does this say for the future of the mutuals agenda?

Staff transferred into social enterprises which receive their funding from government are totally at the mercy of that government`s political agenda. Patrick Butler wrote in the Guardian about the uncertain future for NHS staff:

NHS staff currently considering – or actively engaged in – plans to spin-off from the NHS will look at the Assura Medical win with trepidation (there are 25 NHS spin outs in existence, according to the Department of Health; a further 20 are yet to launch). The next wave of spin outs in October take with them a three year contract to deliver services. Some will wonder whether they have a future when their three years are up.

Indeed, CSH must now be wondering what its chances are of retaining its core business, the contract for community services in central Surrey which it was given as a dowry when it left the NHS. That contract is believed to come up for tender in the next 12 months. If it loses that it will be in serious trouble, and the political embarrassment for ministers will be considerable.

No “mutuals agenda”, just a privatisation agenda

In contrast to Mr Holbrook, Cheltenham Against Cuts does not believe there is a “mutuals agenda”. This is a fraud promoted by all 3 parties who have spent over 20 years pursuing a “privatisation agenda” which is totally at odds with mutuality! Indeed, one of the milestones in the financial crisis was the failure of Northern Rock which demutualised from a Building Society into a bank in 1997. Having been rescued by the previous government, the current Chancellor George Osborne has announced his intention to sell it off rather than mutualise it.

A Banker Speaks on public services

A vision of the grim future of our public services (unless we fight it!) was recently given at a meeting by investment banker and Tory MP Oliver Letwin, who is architect of the coalition’s plans to reform public services. The Observer reported his comments as follows (emphasis added):

Letwin was speaking at the launch of a liberal thinktank’s report at the London headquarters of KPMG, one of the biggest recipients of government cash, which won the first contract for NHS commissioning following the decision to scrap primary care trusts and further open the health service to private companies.

In controversial comments angering teachers, nurses and doctors, he warned that it was only through “some real discipline and some fear” of job losses that excellence would be achieved in the public sector.

Letwin added that some of those running schools and hospitals would not survive the process and that it was an “inevitable and intended” consequence of government policy.

“You can’t have room for innovation and the pressure for excellence without having some real discipline and some fear on the part of the providers that things may go wrong if they don’t live up to the aims that society as a whole is demanding of them,” he said.

“If you have diversity of provision and personal choice and power, some providers will be better and some worse. Inevitably, some will not, whether it’s because they can’t attract the patient or the pupil, for example, or because they can’t get results and hence can’t get paid. Some will not survive. It is an inevitable and intended consequence of what we are talking about.”