Social Enterprise - The Social Value Act Dave Miller Social Entrepreneur & SE UK Associate

1. Social Enterprise - The Social Value Act Dave Miller Social Entrepreneur & SE UK Associate

3. Four things... What is social value? Background to the Public Services (Social Value) Act What the Act covers What can you do?

4. What is social value? Social value has been loosely defined as: “the additional benefit to the community from a commissioning/procurement process over and above the direct purchasing of goods, services and outcomes” This may also be your USP as a business!

5. Background to the Public Services (Social Value) Act The social enterprise sector has long called for social value to be factored into commissioning to: support local job creation improve access to market entry for civil society organisations minimise the impact of the spending cuts on civil society organisations Social Enterprise UK included this recommendation in our 2010 General Election manifesto

6. More background… In July 2010, Chris White MP tabled the Public Services (Social Value) Bill He felt the Bill: tied in to the Big Society vision would help create a mixed market of providers and encourage market entry for civil society organisations could give rise to cross-departmental efficiencies The Bill became law on 8th March 2012 and was implemented on 31st January 2013

7. What the Act covers Public bodies are required to consider how they might improve the economic, social and environmental well-being of the area at the pre-procurement stage of public service commissioning. The Act applies to : all public service contracts over a certain threshold those public services contracts with only an element of goods or works All English bodies will have to comply with the new law, including local authorities, government departments, NHS Trusts, PCTs, fire and rescue services, and housing associations.

8. What the Act covers cont. Thresholds: £113,057 (central govt) £173,934 (everything else) The Act does not apply in legislation to contracts below these amounts… But….

9. What can you do? 5 point plan • Get informed - be in the know • Get in touch - be proactive • Get thinking - be confident • Get ready - be aware • Get real - be realistic

10. Key documents Social Enterprise UK guide: http://www.socialenterprise.org.uk/uploads/files/2012/12/social_value_guide.pdf Cabinet Office Procurement Policy Note 10/12 “The Public Services (Social Value) Act 2012 – advice for commissioners and procurers” 20th December 2012 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/79273/Public_Services_Social_Value_Act_2012_PPN.pdf

11. Any Questions? mail@daveymiller.co.uk Social Enterprise UK www.socialenterprise.org.uk

12. Corporate governance and responsibilities

13. “The system of rules, practices and processes by which a company is directed and controlled”

15. Principles of Corporate Governance • Ethical approach • Balanced objectives • Each party plays their part • Decision-making processes in place • Equal concern for all stakeholders • Accountability and transparency

16. Balancing stakeholder interest • Owners • Management • Customers • Suppliers • Investors • Government • Community

17. typical governance problems and challenges • board recruitment: such as problems ‘recruiting/electing’ people with the right skills and experience; and areas of expertise that are commonly lacking • board roles: some roles may be problematic for the board to fulfill (safeguarding values and mission; shaping strategy; risk assessment; ensuring effective performance; ensuring board operates in responsible and accountable manner; maintaining an effective board; compliance with external (government) demands and measures;) • problems in managing relationships with management –boards becoming a rubber stamp or conversely interfering too much • managing the tension between social and business goals • managing member relations and involvement • managing the demands of different stakeholders and regulators.

18. Key governance paradoxes: • Who governs? – ‘experts’ vs ‘stakeholders’ • Board roles – ‘conformance’ vs ‘performance’ • Relationship with management – supervision vs support • Multiple or ambiguous accountability

19. Member-led / mutual challenges • Often problems in attracting people with appropriate skills to serve on board, people get involved because they are interested in the ‘cause’ rather than governance • Election process can mean boards to not have ‘appropriate’ skill mix • Problem of maintaining membership involvement and commitment, particularly as the organisation grows and becomes more professionally led. • Public sector spin-offs/hybrids • Managing multi-stakeholder boards • Managing staff involvement and control • Managing tensions between staff who are members and those who are not • Developing appropriate mechanisms to involve users • Managing contracting relationships

20. Governance themes • * A common theme is: the range of governance structures goes from: Small informal to larger more formal professional, with different issues associated. Eg some issues of insularity with small informals • * Multi-stakeholder structures – issues about how to manage different interests • * Influence of regulatory structures on boards: can be quite demanding, requiring a number of changes • * Involving users: a wide variety of ways of addressing this including users on boards • * Location and expertise? Eg Few inner city accountants ready to sit on regional SE boards? • * A lot of specific issues that can arise around different types (see types below): • eg1 business people moving into SE sector, getting pressure to shape up through Governance requirements • eg 2. Charities overdoing governance and procedural stuff, and so hampering entrepreneurial activity • * contracting issues – not just public sector, but also subcontracting with private business • * Transitions: a lot of trends eg towards increasing emphasis on governance; but also organisations in transition – moving into contracting, moving from small business, spinning off from public sector

21. Corporate governance in employee owned businesses – some examples

22. Case Study – John Lewis Partnership

23. John Lewis ‘Partnership Council’ • 83% of its members are elected by Partners (others by Chairman) • Hold management to account, influence policy and make key governance decisions. • Elects five directors to the Partnership board. • Has the ultimate power of dismissing the Chairman if he fails to fulfil his responsibilities. • Influencing Partnership policy and how profits are spent, such as pay, pensions and discount policies. • The Chairman appears before the Council twice a year to report and answer questions on his running of the Partnership.

24. Case Study – Central Surrey Health • Representative body – “The Voice” • 7 democratically elected representatives from across business geographically split Objectives: • Enable co-owners to have a say in and feel involved with how Central Surrey Health is run • Hold the Board to account on behalf of the co-owners of CSH • Question and influence the Board on company direction and performance

25. Case Study – Central Surrey Health How this is done: • Formal reporting by the MDs to the Voice • The Voice appoints a non executive director that sits on board • Feedback to co-owners • Co-owner engagement • Objectives + learning / development

26. Case Study – Central Surrey Health Recent work: • Representing views on range of issues from efficiency projects to IT investment. • Closely involved in the development of 2012-2016 strategy, securing Central Surrey Health’s values and vision • Consulting co-owners on key projects such as Co-ownership Strategy

27. Any Questions? mail@daveymiller.co.uk Social Enterprise UK www.socialenterprise.org.uk