Social enterprises, big corporations and the NHS

The devil is in the details.

The government has repeatedly stated its commitment to promote social enterprises to deliver public services. But in reality, its commitment is pure lip-service. A failure to recognise the systemic imbalances of a competitive tendering system and existing and emerging regulation means that current conditions are in favour of large corporations, putting social enterprises at a disadvantage. The NHS reforms are an example of where this can be observed in real time – if you look closely. Away from the spotlight that the Health and Social Care Bill was under during its passage into law, the Department of Health (DH) is drawing up guidance and regulation documents necessary to implement the reforms. Hidden away in these technical documents are examples of how the NHS reforms are creating a system that gives big corporations the edge over competitors. This contradicts the stated intention of the Act to support the delivery of health services by locally formed social enterprises – in line with Andrew Lansley's vision that locals know best what types of health services are needed. As the NHS sees the introduction of competitive tendering on a large scale, big players such as Serco and Virgin Care are picking up sizeable contracts, as this (slightly alarmist) map shows.

Why? Two reasons:

Firstly, there is a systemic problem in competitive tendering for NHS contracts: the Act it is pitting small or start-up companies with a social mission against large, profit-oriented existing corporations who have been playing the field for decades. Their experience and their deep pockets allow them to dedicate sufficient resources to participate in often lengthy and complex tendering processes. In addition, they can spend quite a lot of money on lobbying – something that is happening in all sectors of industry, and doctors and commissioners will not be exempt. Supporters of the Act who believe that local commissioners will prefer local enterprises should look towards the delivery of the workfare programme. Despite assurances by government (pdf) that most contracts would go to charities, social enterprises and other third sector organisations, a few big companies have largely outbid smaller competitors. A4E and Working Links for example won several lots – both companies now accused of failing to meet contractual targets and of committing fraud, putting paid to the belief that they would be better at delivering. If the government does not begin to actively favour smaller players, a similar fate will befall the NHS.

Secondly, the government's also fails to express its support for social enterprises in emerging regulation and guidance. In fact, the DH seems to be reversing previous supporting measures. One way the DH used to demonstrate support is through the NHS organisational framework, an annual key document that gives commissioners of health services binding guidance on how to implement the DH's priorities. The framework for 2011/12 (see p19) explicitly encouraged commissioners to "use the introduction of Any Willing Provider to enable greater participation by social enterprises (...) starting with community services."* Compare this to the current framework for 2012/13 which does not even mention social enterprises. Furthermore, it only allows 12 month contracts between commissioners and providers. Previously, social enterprises and voluntary sector organisations were allowed three years' contracts. The longer contract periods helped organisations stabilise long-term income flows, enabling them to focus on service delivery. Reducing standard contract lengths gives large companies an advantage, as they have diversified income streams to cross-subsidies businesses, and greater administrative capacity to snap up contracts as they become available.

Another area of concern is the licensing regime that is currently drawn up by the regulatory body Monitor. Any provider of health services will have to comply with Monitor's rules to ensure delivery of stable and high quality services. Part of these criteria focus on financial stability of a company – a prudent measure. However, Monitor plans to use commercial credit rating agencies such as Standard and Poor's to assess a provider's financial standing. Leaving aside the fact that these agencies have an inherent conflict of interest (they are paid by the companies they are rating), their use will again only give advantages to big companies. Rating agencies have no experience with social enterprises, and it is likely that their structure and finance streams won't fit the criteria established for for-profit companies – so they will fail the rating without being financially unstable.

The examples above expose the fundamental lack of understanding of the social enterprise sector by government, and its failure to recognise the systemic imbalances that occur if there are no clear supportive policies in place to develop a sector with the potential to deliver locally tailored and accountable services. The believe that in a free market, all players have the same starting point, still dominates the thinking. In reality, the market is skewed against small players, and the competition is far from fair. If government really wants so see social enterprise thrive in the NHS, it needs to do far more than to give a bit of cash. It needs to actively engineer regulation and guidance to give social enterprise the edge. However, as the government thinks the playing field is already even, big corporates will continue to be the winners.

*Not that the earlier commitment showed results - in September 2011, one of the first tenders for community services went to Virgin Care rather than the social enterprise Central Surrey Health. Observers speculate that one of the reasons for this decision was the requirement for bidders to post a £10m security bond – a sum that Virgin Care could raise easily, but that most social enterprises struggle with.
 

In reality, the market is skewed against smaller players. Photograph: Getty Images

Veronika Thiel is a researcher and writer in the field of social economics and health policy. She tweets from @veronikathiel.

Shaun Botterill/Getty Images
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All the Premiership teams are competing to see who’s got the biggest stadium

It’s not just a financial, but a macho thing – the big clubs want to show off that they have a whopper.

Here in NW5, where we live noisily and fashionably, we are roughly equidistant from Arsenal and Spurs. We bought the house in 1963 for £5,000, which I mention constantly, to make everyone in the street pig sick. Back in 1963, we lived quietly and unfashionably; in fact, we could easily have been living in Loughton, Essex. Now it’s all changed. As have White Hart Lane and Highbury.

Both grounds are a few metres further away from us than they once were, or they will be when White Hart Lane is finished. The new stadium is a few metres to the north, while the Emirates is a few metres to the east.

Why am I saying metres? Like all football fans, I say a near-miss on goal was inches wide, a slow striker is a yard off his pace, and a ball player can turn on a sixpence. That’s more like it.

White Hart Lane, when finished, will hold 61,000 – a thousand more than the Emirates, har har. Meanwhile, Man City is still expanding, and will also hold about 60,000 by the time Pep Guardiola is into his stride. Chelsea will be next, when they get themselves sorted. So will Liverpool.

Man United’s Old Trafford can now hold over 75,000. Fair makes you proud to be alive at this time and enjoying the wonders of the Prem.

Then, of course, we have the New Wembley, architecturally wonderful, striking and stunning, a beacon of beauty for miles around. As they all are, these brave new stadiums. (No one says “stadia” in real life.)

The old stadiums, built between the wars, many of them by the Scottish architect Archibald Leitch (1865-1939), were also seen as wonders of the time, and all of them held far more than their modern counterparts. The record crowd at White Hart Lane was in 1938, when 75,038 came to see Spurs play Sunderland. Arsenal’s record at Highbury was also against Sunderland – in 1935, with 73,295. Wembley, which today can hold 90,000, had an official figure of 126,000 for the first Cup Final in 1923, but the true figure was at least 150,000, because so many broke in.

Back in 1901, when the Cup Final was held at Crystal Palace between Spurs and Sheffield United, there was a crowd of 110,820. Looking at old photos of the Crystal Palace finals, a lot of the ground seems to have been a grassy mound. Hard to believe fans could see.

Between the wars, thanks to Leitch, big clubs did have proper covered stands. Most fans stood on huge open concrete terraces, which remained till the 1990s. There were metal barriers, which were supposed to hold back sudden surges, but rarely did, so if you were caught in a surge, you were swept away or you fell over. Kids were hoisted over the adults’ heads and plonked at the front.

Getting refreshments was almost impossible, unless you caught the eye of a peanut seller who’d lob you a paper bag of Percy Dalton’s. Getting out for a pee was just as hard. You often came home with the back of your trousers soaked.

I used to be an expert on crowds as a lad. Rubbish on identifying a Spitfire from a Hurricane, but shit hot on match gates at Hampden Park and Ibrox. Answer: well over 100,000. Today’s new stadiums will never hold as many, but will cost trillions more. The money is coming from the £8bn that the Prem is getting from TV for three years.

You’d imagine that, with all this money flooding in, the clubs would be kinder to their fans, but no, they’re lashing out, and not just on new stadiums, but players and wages, directors and agents. Hence, so they say, they are having to put up ticket prices, causing protest campaigns at Arsenal and Liverpool. Arsène at Arsenal has admitted that he couldn’t afford to buy while the Emirates was being built. Pochettino is saying much the same at Spurs.

It’s not just a financial, but a macho thing – the big clubs want to show off that they have a whopper. In the end, only rich fans will be able to attend these supergrounds. Chelsea plans to have a private swimming pool under each new box, plus a wine cellar. Just like our street, really . . . 

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 11 February 2016 issue of the New Statesman, The legacy of Europe's worst battle