Social Enterprise Is the Future for Our Public Services

Posted: 12 February 2018, in Blog

A version of this article appeared in The Scotsman newspaper on 12/02/18: Public services are for people, not to make profits for shareholders

Social enterprise is the future for our public services

The liquidation of corporate giant Carillion has exposed deep flaws in the way our country delivers public services. It raises big questions about politics, the broken economy and the old way of doing business.

In the aftermath of cases like this the immediate priority should always be maintaining public services and protecting the jobs of employees and the many small businesses in the company supply chain.

Carillion is of course not the first corporate casualty of the toxic PFI/PPP regime that’s been encouraged and promoted in Scotland and the UK. Governments of all kinds have embraced this unusual model of public service delivery.

This is the strange notion that public services should not actually be owned by the community or run for public benefit but should primarily exist to produce profits for shareholders and directors. This dysfunctional model has clearly had its day.

The public sector on its own often doesn’t have the knowledge, skills, flexibility and innovation of business. But there are other, more sustainable, ways to deliver our public services. Locally owned social enterprises and co-operatives are the only real alternative.

It’s entirely reasonable to roll out a diverse mix of business models that put people at the heart of public services. Atlantis Leisure, The Wise Group in employability and justice, HCT Group delivering bus services, the Low Moss Prison Support Pathway and the NHS Lothian and third sector health partnership – it already happens and it works.

This certainly isn’t about demonising the private sector, shareholders or company directors. ‘The private sector’ is not one single thing, it’s a spectrum of types and sizes – and it’s small businesses that suffer most as a result of big business failure. It’s about embracing real enterprise in place of crony capitalism.

There are many business people who behave ethically, provide value to society and are driving positive change. Unfortunately their efforts are too often drowned out by the scandals of the big outsourcing companies and other wealth extractors. But we need far more than CSR. Simply ‘giving something back’ is recognition that you’re taking something that isn’t yours in the first place.

Public services run by big corporations is a failed experiment. It increasingly ends up as corporate welfare, a kind of socialism for the rich. Even when they’re not being propped up with taxpayers’ money it is anti-social enterprise, existing only to benefit the corporation and in turn increase wealth inequality.

But this corporate failure is a symptom of something more fundamental. It’s the same issue whether we’re talking about outsourcing companies, banks, permanent subsidies for train companies or government aid for arms manufacturers – the business model is broken. Under the law a corporation is classed as a person and is required to maximise profits. It has no choice.

It’s easy to get angry at corporate abuses but our response should be practical and constructive. We must have proper legal reform of corporations and insist on genuine, ethical business practices. Equally we must build the local, positive alternative of social enterprise in every community in Scotland.