SOCIAL ENTERPRISE

ISSUES FOR THE VCS

Summary

Social Enterprise raises the following issues for VCS organisations working with offenders and ex-offenders:-

• How level will the new playing field of ‘diversity’ of criminal justice provision be? Will the VCS be able to compete on the same terms with social enterprise, the private sector and the public sector?
• How far are VCS organisations themselves ‘social enterprises’ anyway?
• Do VCS organisations need to become more ‘business-like’ to be seen as just as effective as ‘social enterprises’?
• What implications will the spinning out of individual prisons and probation services as independent social enterprises have for the VCS?
• Are the development of Social Firms and Work Integration Social Enterprises (WISE) initiatives that the VCS should get involved in to further their aims?
• How far do cooperative and mutual social enterprises embody the VCS values of user involvement and empowerment?
• How far are cooperative and mutual social enterprises in direct competition to the mainstream VCS and how far complementary?

Social Enterprise

Everyone’s talking about Social Enterprise at the moment, so much so that the whole idea is in danger of losing any useful meaning at all. But what’s behind all the talk will have a great impact, now and in the future, on the work of VCS organisations working with offenders as well as on offenders themselves.

Definitions of the term are many and varied, but perhaps the best place to start is with the Social Enterprise Coalition (SEC). Following the government’s definition they define social enterprises as

"businesses with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners." 

Social Enterprise and the Criminal Justice System

In November 2009 NOMS produced a report mapping the extent to which social enterprises as defined by the SEC were currently working with Prison and Probation Services (Reducing Reoffending through Social Enterprise. NOMS 2009) . NOMS have developed a national social enterprise strategy and during 2011 are conducting a series of ‘Regional Workshops’ with the following aims:-

• To help social enterprises make informed decisions about developing NOMS targeted services
• To improve networking between NOMS, co-financing organisations and social enterprises
• To improve the understanding of NOMS staff about what social enterprise can offer
• To shape and own an action plan for continuing and building the engagement within each region.

Up to date information about the NOMS Social Enterprise Programme

So Social Enterprises are becoming increasingly important in the Criminal Justice System. And they are doing so in two overlapping ways. Firstly they are being touted as a new way – or even the best way – of delivering services. And secondly they are seen as a new way of providing employment and re-integration for offenders and ex-offenders.

Social Enterprises Delivering Services

The Government’s Open Public Services White Paper makes it quite clear that diversity of provision in ALL public services is its top priority for reform. And by diversity they mean the public, private and social enterprise sectors competing with each other to deliver public services. The first concern here for the VCS, as much as for social enterprises themselves, is how level will the playing field be?

When we look at the implications for specifically Criminal Justice services we see a number of other possible concerns which will have a direct bearing on VCS organisations working in the sector.

The first point to note here is that many, if not all, VCS organisations can themselves be construed as ‘social enterprises’ under the very wide (and some would say loose) definition given by the Social Enterprise Coalition. The vast majority are legally structured either as Companies Limited by Guarantee, Community Interest Companies or Charities, all of which are legally bound to reinvest their surpluses “…in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners."

The NOMS Report of 2009 also points out that many in the public sector see no difference between the two either – ‘Many respondents, particularly in prisons, were unaware of the differences between working with social enterprise and the voluntary sector.’ (p 51)

But the report then goes on to identify areas where prisons and probation thought working with social enterprise was actually preferable to working with the conventional VCS -

‘Social enterprises offer the most rewarding work opportunities and in particular, better training opportunities, than average third sector providers of Community Payback projects...The local nature of many social enterprises was seen as a key benefit by 44% of probation respondents in the extended interviews. 52 Interviewees argued that offenders are more likely to secure permanent employment through social enterprise relationships than through other third sector relationships...Advantages around finance management were cited. Social enterprises were seen as more business-like and professional than the voluntary and community sector which complements the current trend within the Probation Service to become more commercially orientated and entrepreneurial within the context of the transition to Trust status...’(p51)

So a second concern for the VCS may be that they are seen as less effective than ‘social enterprise’ – even though most VCS organisations are themselves ‘social enterprises’ in the Social Enterprise Coalition definition. The implication is that the VCS should become more (and be seen to become more) ‘business-like’ if they are going to keep their place in the new policy and delivery context of ‘diversity of public service provision’.

What will be of further concern to these social enterprises/VCS organisations though is the fact that  existing services delivered by the public sector are being encouraged to spin themselves out as social enterprises in their own right and compete directly with other social enterprises, the private sector and the remaining public sector. In the CJS we then have the prospect of individual Prisons and Probation Trusts establishing themselves as independent social enterprises in direct competition with the existing social enterprise/VCS sector which has traditionally provided services to them. Prisons and Probation may thus conceivably become VCS/social enterprises in their own right. What implications will this have for the existing VCS/social enterprise sector? And what implications will it have for organisations like CLINKS? Will prisons and probation run as independent social enterprises be entitled to become members of CLINKS just like any other VCS organisation?

Social Firms and Work Integration Social Enterprises

The second area where social enterprises are becoming  increasingly important in the CJS is as agents of resettlement and rehabilitation in their own right. Properly paid, stable and sustainable employment has long been seen as one of the key pathways out of offending and work integration social enterprises (WISE) are social enterprises whose social objectives are to reintegrate disadvantaged groups (including offenders)  into the mainstream labour market. Social Firms UK is the national support organisation in the UK for this form of social enterprise and an indication of their increasing importance is that NOMS are corporate members of Social Firms UK.

VCS organisations, particularly those working with offenders to help them get back into employment, are likely to be increasingly involved with Social Firms and WISE employing offenders. They provide both transitional employment – temporary, often supported employment, as a stepping stone into the mainstream labour market – as well as more permanent employment opportunities at times and in places where there are few mainstream jobs available.

Cooperative and Mutual Social Enterprises

Like WISE and Social Firms, Cooperatives and Mutuals are particular forms of social enterprise, but with a much longer history and a much larger share of the UK and world economy.

They are characterised by either full employee ownership or multi-stakeholder ownership where employees, service users and the wider community have a joint stake in the ownership and management of the enterprise.

As with the wider social enterprise sector they are becoming increasingly important in the CJS in two overlapping ways – as providers of services and as agencies of resettlement and rehabilitation in their own right. Particularly in the latter they potentially provide a more effective structure for delivery of for the traditional VCS values of user involvement and empowerment – service user-led and controlled resettlement and rehabilitation. As such they potentially provide a means of response by the VCS to the new ‘diversity of delivery’ agenda.

A recent report from the liberal Think Tank Centre Forum develops this argument for greater involvement of cooperatives and mutuals in the CJS.

It proposes that a real ‘Rehabilitation Revolution’ would see the development of ‘through the prison gate’ offender cooperatives and mutuals providing employment, resettlement and rehabilitation services to their members in prison and on release.

It argues that Cooperative and mutual structures of employment and service delivery foster the development of systems of mutual social and economic support which reinforce desistance from crime. This should begin in cooperative and mutual employment in prison and then continue ‘through the gate’ in mutual support and employment in the community.

Mutualised Prison Industries together with these ‘through the gate’ mutuals and cooperatives providing real employment and paying real wages would provide the best means of making prisoners ‘pay for their crimes’ through financial reparations to victims. Cooperative work would thus provide both reparation to victims and rehabilitation for offenders.

In this way cooperatives and mutuals would not only provide employment and promote rehabilitation, but they should also provide the comprehensive ‘after-care’ services traditionally delivered by probation and the mainstream VCS.

The role of probation and the mainstream VCS in offender rehabilitation would then become more one of enabling and fostering the development of these cooperatives and mutuals and less one of direct rehabilitation service delivery themselves.

In the case of ‘through the gate’ cooperatives, these services would be provided by offenders and ex-offenders foroffenders and ex-offenders. In the case of ‘through the gate’ mutuals, they would be provided by an equal partnership of offenders, ex-offenders, professional staff and appropriate community members.

The good news is that much of this is already beginning to happen in a number of scattered small scale initiatives.  Thus the Big Picture Cooperative  provides employment for prisoners from a resettlement prison, who, as part of their preparation for release programme work in the co-operative for a four week period. During that time they are treated as members of the co-operative and have a full say in how the business develops. They learn about the co-operative movement, its values, and principles and receive genuinely democratic work experience as well as help and support in preparation for release.

In a similar way Recycle IT! is a co-operative of ex-prisoners in Manchester who provide employment and mutual support to each other through their co-ownership of their own IT recycling business. Also in Manchester is a new initiative to develop a prisoner and ex-prisoner savings and credit union, providing not just financial services for its members but also accommodation and employment services – an offender-run mutual Prisoner Aid Society.

But the report argues these scattered initiatives need developing further and replicating in order to realise their full potential.

Three things are needed to make this happen.

Firstly prisoners should be allowed to work for real wages while they are in prison. This would not mean them making money out of their crimes because deductions would be made from their income for direct financial reparations to their victims, for a contribution to the cost of keeping them in prison and for a contribution to the support of their families and dependents.

Secondly the Cooperative Movement needs to rediscover its roots and actively promote and develop co-operation as a way out of poverty and crime. In the words of William King, an inspiration for the original Rochdale Pioneers:-

“The evils which co-operation is intended to combat, are some of the greatest to which men are liable, viz.the great and increasing difficulties of providing for our families, and the proportionate danger of our falling into pauperism and crime”

And finally the Government needs to recognise that offenders are just as much a part of the Big Society as anyone else and as service users of the criminal justice  system they are entitled to full involvement in their own rehabilitation. And it is only their full involvement that will make rehabilitation really effective.

The report concludes that it is only co-operative employment and mutual service delivery that will provide both reparations and justice for victims as well as effective rehabilitation for offenders.

Perhaps the main issue this approach raises for the VCS is how far is this cooperative and mutual approach in direct competition to the mainstream VCS and how far is it complementary?