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Is social enterprise the way forward for public services?

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The government is committed to supporting the creation of social enterprises. The schemes offer nurses opportunities to develop services to respond to community needs


This article…

  • What is a social enterprise?
  • How social enterprises fit into national policy
  • What social enterprises can offer
  • The challenges of running a social enterprise



Ceri Jones is head of policy and research at the Social Enterprise Coalition.


Jones C (2010) Is social enterprise the way forward for public services? Nursing Times; 107: 4, early online publication.

Social enterprises are organisations set up to deliver public benefit rather than private profit, and are often owned by their employees. Their social and environmental focus makes them ideal for providing flexible and responsive health and social care.

This article explains how social enterprises differ from other types of businesses and from public bodies. It explains the policy context and benefits of setting them up and gives examples of social enterprise in practice.

Key words: Social enterprise, Social care, Service users, Continuity of care

  • This article has been double-blind peer reviewed


5 key points

  1. Unlike private businesses, the social or environmental goals of social enterprises are central to what they do.
  2. Social enterprises can be owned by staff, patients, communities or a combination of these.
  3. Autonomy gives social enterprises greater flexibility to most public bodies.
  4. Overseeing a social enterprise requires a commercial as well as a socially motivated culture.
  5. Government policy supports the setting up of social enterprises in health and social care.


Social enterprises can empower their employees to redesign services in flexible ways that are more responsive to the needs of the communities and people they serve, and to understand them better. They are delivered for public - rather than private - benefit.

These organisations and their role in delivering health and social care services have received a great deal of attention recently. The concept is receiving support because people recognise that public services will only be transformed if frontline staff are given the freedom to use their talents, insight and expertise to find innovative ways to improve care.

What is a social enterprise?

Social enterprises are businesses driven by a desire to make social or environmental change. They are set up with the specific purpose of making a difference and use a business model to bring about this change. Because they exist for public and community benefit social enterprises are well placed to deliver health and social care services.

The focus of social enterprises ranges from local to national, and there are even international, multimillion-pound organisations. They operate across a range of sectors, from primary and community care to renewable energy, housing and retail. However, all share a number of common features.

Central to every social enterprise is the trading of goods or services. Those operating in the fields of health and social care have business models are based on providing services on behalf of public bodies, including the delivery of contracts held with primary care trusts (PCTs), acute and other NHS trusts, GP practices and local authorities.

Unlike the profit focus of private businesses, social or environmental goals are central to the activities of social enterprises. For example, while TheBig Issue is a business that sells magazines through homeless people who keep part of the cover price, its overriding purpose is to address homelessness itself, and it uses any profits to meet this goal. Social enterprises operating in healthcare reinvest their profits to improve services for patients and local communities.

Social enterprises are not a new phenomenon, but there is a surge in interest in their creation in the public sector. This means there is an opportunity for health and social care professionals to be involved in running and working for a very different type of organisation to traditional publicly funded bodoes.

The policy context

Social enterprise has been part of the policy landscape for health and social care for many years, and as part of its strategy for creating the “Big Society”, the government is committed to supporting the creation and expansion of mutuals, co-operatives, charities and social enterprises, and giving these groups greater involvement in the running of public services (Cabinet Office, 2010). This includes a pledge to give public sector workers the right to form employee-owned social enterprises. The assumption is that empowering people to set up their own enterprises will help them to deliver better services.

The first policy of this kind was the “right to request”, set out in the NHS Next Stage Review (DH, 2008), which has since been adopted by the present government. The review gave clinical staff within PCTs the right to request to move out of the NHS and establish social enterprises to deliver their services. The deadline for submitting a right to request has now passed, but the policy could result in as many as 40 social enterprises being created to deliver publicly funded primary and community care by the middle of 2011.

The Department of Health White Paper Equity and Excellence: Liberating the NHS (DH, 2010) set out a number of commitments in support of social enterprise, including the ambition to create the largest social enterprise sector in the world. More recently, the Cabinet Office (2010) introduced “Rights to Provide” to support staff wanting to take control of their services. These commitments demonstrate that social enterprise is a key part of the government’s vision for health and social care.

Benefits for health and social care

Social enterprises operating in health and social care share with the NHS a commitment to providing high-quality and efficient services that put patients, service users and the community first. Their added value lies in their ability to be independent, innovative and responsive.

Control and empowerment

There are many benefits that social enterprise can offer public services, core to these is the ability for staff to have greater control over service development than is the case for those working in the NHS or local authorities. One of the most common complaints about working in the public sector is that ideas for improvements are stifled. It is also commonly recognised that the people who are best placed to make the required changes are often those closest to the frontline. Social enterprise can free people of those barriers and empower staff to have a greater say.

How social enterprises do this varies according to their size and culture. Some ensure staff have a greater role in decision-making by giving managers and staff more autonomy to do this. Others make this more formal by engaging with employees, either as members or owners of the organisation. An example of this is Central Surrey Health, an employee-owned social enterprise (see case study 1).

Case study 1. Central Surrey Health

In January 2005, the board of East Elmbridge and Mid Surrey PCT decided to focus on its role as a commissioner rather than a provider of healthcare services. It aimed to find a model for deliverying nursing and therapy services that suited the values of staff, was responsive and flexible enough to adapt to a changing healthcare system, and could deliver efficient, integrated, patient-centred services.

Consequently, Central Surrey Health was set up to take over some service provision. A company limited by shares, Central Surrey Health operates with a ”not-for-profit distribution” ethos, and where the shares are owned by all the company’s staff who are referred to as co-owners.

The first challenge for the new organisation was to ensure continuity of care while its systems and structures were put in place. With an enterprising and flexible culture that contrasts with the bureaucratic nature of many NHS organisations, Central Surrey Health is now streamlining clinical services to give patients a more integrated experience.

Another challenge has been ensuring co-owners are kept informed and engaged so that they can have a real say in decision-making. In order to communicate effectively with staff across multiple sites, a range of tools were developed before the business was created, such as formal briefings and drop-in sessions. The company continues to develop internal communication, exploring innovations to increase co-owner involvement in decision-making. It has also made a number of changes to the business, most recently, automating its referrals system, disposing of cumbersome paperwork and increasing response times in service provision.

Connecting with communities and service users

The best organisations are those that really understand their customers. This is an important characteristic of social enterprise. Unlike most privately run businesses, social enterprises can be owned by their staff, patients, communities or a combination of these groups. This often means the people they serve are more involved in the design and delivery of services and that organisations are ultimately more accountable to them.

For example, enterprises like the Sandwell Community Caring Trust have formalised their community engagement by having carers and service users on their boards. Similarly, organisations like Open Door in Grimsby design and produce their services in partnership with the communities they serve to ensure they truly meet users’ needs (see case study 2).

Case study 2. Open Door

North East Lincolnshire PCT (now Care Trust Plus) was acclaimed as a top 25 PCT, despite working with the 63rd most deprived community in England.

With funding from the Neighbourhood Renewal Fund, the PCT decided to work creatively with local people to design easier access to better health and social care services.

At the heart of this concept was the call to engage in co-production with people who usually experience poor relations with traditional service providers, including homeless people, problematic drug users and others who are often excluded from GP lists.

Open Door was created as an activity and social centre with a café, a Citizens Advice Bureau, cookery classes, alternative therapies, showers and flexible activity space open to all. Though it provides a range of clinical services, it is not a GP surgery and was not designed or branded as such. The aim is to provide a safe and secure environment where vulnerable people can come for information, advice, care, nutritional sustenance and a productive use of time.

The organisation is run as a self-sustaining social enterprise with a Personal Medical Services contract. Initially 23 patients, with a history of challenging behaviour within traditional general practice, were allocated to Open Door by the PCT – it now has more than 700 patients.

Open Door’s unique role in the community has enabled it to develop strong relationships with many local stakeholders. The local accident and emergency department automatically refers anyone without a GP to Open Door, and the police work with it to support prolific and priority offenders.

The organisation has also forged a strong relationship with Abbey Santander, which not only provides its business banking, but also creates accounts for clients irrespective of their criminal or social past.

Transforming services

Increasing control and empowering staff, along with better connection to customers and patients, underpin a number of other benefits that can truly transform services for the better. This can include joining up different areas of the public sector to provide more person-centred, holistic services – like at Open Door.

While all these factors highlight the benefits of social enterprise, the ultimate motivation has to be a desire to transform services and improve the quality of care while ensuring accountability to staff, patients and the community.

Challenges of running a social enterprise

While there are a number of benefits of social enterprises, managing them is not without challenges. These are commonly experienced related to the cultural change necessary to run the organisations. They are fundamentally businesses and their management is therefore different to, say, managing a public sector department.

Overseeing a social enterprise requires a commercial, as well as a socially motivated culture. It needs a board of directors, chief executive, senior management team; it is also vital that  staff  support the aims of the organisation if such a culture change is to be embedded throughout it.

Managing or working for a business that competes for contracts is different to managing a public service department. While there are some similarities and overlap, there are often new areas of responsibility to manage and additional skills required. These include financial management and forecasting, and business planning skills including market analysis, competitor analysis, business development, marketing, tendering and bid writing.

Good leadership is also essential. Directors of social enterprises have in many ways more personal responsibility and accountability than those within the public sector. They are fully responsible for the management of their company and must act in a way most likely to promote its success.

Important responsibilities are defined in law and in the company’s governing documents. Directors also have certain legal filing responsibilities with Companies House - for example, annual accounts, annual returns and important changes to the company. They must also comply with other legal responsibilities such as employment, tax and health safety law.


Working for social enterprises offers health and social care professionals a real opportunity to influence the services they offer. However, this involves a change in culture and outlook for those moving from public bodies. Government support for the development of these organisations means there has never been more opportunity to set up a social enterprise, while the nature of the work they do means nurses are well placed to take advantage of this. Doing so requires motivation and confidence but the potential rewards for both nurses and their patients are significant.

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