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Social Enterprise & Public Procurement,[object Object],Revd Timothy Curtis,[object Object],Senior Lecturer in Social Entrepreneurship,[object Object],University of Northampton,[object Object],HEFCE/Unltd Ambassador for Social Entrepreneurship in Higher Education,[object Object],Supported by ,[object Object]
Brief,[object Object],What are the challenges for local government in policy, commissioning and procurement that make it harder for them to get the most out of social enterprises? ,[object Object],‘wickedness’ of the issue not addressed,[object Object],procurement is uni-directional & untrusting,[object Object],Needs to be ‘purposive’, ‘prosumed’ and ‘co-produced’.,[object Object],2,[object Object],The University of Northampton,[object Object]
The ‘idealised’ model marketplace,[object Object],Social Enterprise is in here,,[object Object],somewhere,[object Object],3,[object Object],The University of Northampton,[object Object]
Private Sector,[object Object],~£1trillion GDP,[object Object],Lets get real…,[object Object],Public Sector,[object Object],~£400billion revenue,[object Object],‘monetised civil society’,[object Object],~£157billion,[object Object],Social ,[object Object],Enterprises,[object Object],~8.4billion ,[object Object],Procurement,[object Object],~£150billion,[object Object],4,[object Object],The University of Northampton,[object Object]
Publicly listed companies,[object Object],Sodexo,[object Object],£12bn revenue,[object Object],380,000 employees,[object Object],80 countries ,[object Object],8 client segments: Corporate, Health Care, Seniors, Education, Defense, Remote Sites, Justice and Sports & Leisure.,[object Object],6% operating margin,[object Object],Serco,[object Object],£3.9billion revenue,[object Object],provide and operate two new prisons in the UK, at Belmarsh West, London, and Maghull, Liverpool, with a combined value to us of around £600m over 26½ years. ,[object Object],formed a new partnership, GSTS 4 Pathology LLP, with the Guy’s and St Thomas’ NHS Foundation Trust, to pursue opportunities in this substantial market, which is valued at approximately £2.5bn.,[object Object], signed three contracts under the UK Government’s Flexible New Deal initiative worth £400-500m,[object Object],Running schools and inspecting schools for Ofsted,[object Object],Social enterprises are just not competing with these publicly listed companies,[object Object],They are competing with SME & privately owned businesses,[object Object],5,[object Object],The University of Northampton,[object Object]
Privately owned companies,[object Object],6,[object Object],These are not known for their public contracting- except construction,[object Object],Note the complex mix of ownership types, inc EBT,[object Object]
SME’s,[object Object],There were an estimated 4.81 million private sector enterprises in the UK at the start of 2008,[object Object],Small and medium-sized enterprises (SMEs) together accounted for 99.9 per cent of all enterprises, 59.4 per cent of private sector employment and 50.1 per cent of private sector turnover. ,[object Object],http://stats.berr.gov.uk/ed/sme/smestats2008-ukspr.pdf,[object Object],Average turnover £215,000,[object Object],http://www.publications.parliament.uk/pa/cm200506/cmhansrd/vo050615/text/50615w10.htm,[object Object],Therefore, rule bound procurement environment,[object Object],The University of Northampton,[object Object],7,[object Object]
Not untypical LA expenditure,[object Object],The University of Northampton,[object Object],8,[object Object],One local authority (A) reports a spend of £331m. The top 10 spending categories account for £226m (28% of the total spend),[object Object],Curtis 2005 ,[object Object]
Progress in Procurement,[object Object],The way it was,[object Object],Non-transparent opportunities & leads,[object Object],Councils knew their budgets but not their spend (BEST Procurement),[object Object],Incumbents had the advantage,[object Object],Lowest cost v best value,[object Object],Fragmented supply chains,[object Object],Grant/SLA/Short-term contracts,[object Object],Liability foisted on contractor,[object Object],The way it is,[object Object],The Compact,[object Object],LM3/e-procurement,[object Object],OGC portal(s),[object Object],Whole-life costing,[object Object],Consortia/supplychain development,[object Object],Full cost recovery,[object Object],Longer/larger contracts,[object Object],Customer more active in risk mgt,[object Object],RELATIONSHIP CONTRACTING,[object Object],9,[object Object],The University of Northampton,[object Object]
The problems of procurement,[object Object],Rule bound but does not recognise social construction of contract development,[object Object],Justice Holmes commented one hundred and five years ago: "Nothing is more certain than that parties may be bound by a contract to things which neither of them intended, and when one does not know of the other's assent”,[object Object],Poor understanding of wickedness of social issues,[object Object],Poor understanding of the inefficiency of ‘overhead’ in providing services,[object Object],The value added by ‘good’ participants (like volunteers) is lost to the value calculation,[object Object],Requires and implies centralisation, professionalisation, risk avoidance and individualism (Young & Temple 2010),[object Object],Perverse outcomes: cherrypicking of easy to reach targets, focus on contract terms rather than what is really going on, unstructured supply chains (NAO 2010) inefficient duplication of procurement overheads (see later),[object Object],“Market logic applies to narrow deliverables, but misses out the crucial dimension that allows doctors to heal, teachers to teach and carers to care: the relationship with patient, pupil or client.” NEF 2006,[object Object],Essentially ‘untrusting’ & ‘uni-directional’,[object Object],10,[object Object],The University of Northampton,[object Object]
Chapter 1 of Dialogue Mapping: Building Shared Understanding ,[object Object],of Wicked Problems, by Jeff Conklin, Ph.D., Wiley,,[object Object],October 2006.,[object Object],The problem with social issues,[object Object],11,[object Object],The University of Northampton,[object Object],lets take a diversion for a minute,[object Object],“Some problems are so complex that you have to be highly intelligent and well informed just to be undecided about them”,[object Object],Dr. Laurence Johnston Peter ,[object Object]
Wicked Issues,[object Object],The problem is not understood until after the formulation of a solution.,[object Object],Wicked problems have no stopping rule.,[object Object],Solutions to wicked problems are not right or wrong.,[object Object],Every wicked problem is essentially novel and unique.,[object Object],Every solution to a wicked problem is a 'one shot operation',[object Object],Wicked problems have no given alternative solutions.,[object Object],Horst & Rittel  and Conklin,[object Object],12,[object Object],The University of Northampton,[object Object],lets take a diversion for a minute,[object Object]
lets take a diversion for a minute,[object Object],Tamed Problems,[object Object],PS, the trick is not to tame an issue,,[object Object],but to keep it wicked,[object Object],Chapter 1 of Dialogue Mapping: Building Shared Understanding ,[object Object],of Wicked Problems, by Jeff Conklin, Ph.D., Wiley,,[object Object],October 2006.,[object Object],13,[object Object]
Social construction of procurement,[object Object],14,[object Object],lets take a diversion for a minute,[object Object]
The (hidden) overhead for the Big Society,[object Object],“Perceived need to control the very complex arrangements for delivery of services leads to layer upon layer of indirect activity.”,[object Object],A team to specify what service is needed and to create a bidding specification ,[object Object],Several organisations to commit resources to create competitive bids often, in the case of activities that will last over several years, these bids can run into hundreds, even thousands, of pages and cost tens or even hundreds of thousands of pounds to produce,[object Object], The “purchasing” team to negotiate, answer queries, re-specify details and so on, before ultimately selecting one “provider” ,[object Object], The provider to set up a democratic structure with Board, committees, procedures to supervise and give legitimacy, and to demonstrate “Good Governance”,[object Object], The committee to be involved with the “purchaser” in setting up a new organisation that meets all the expectations of “good practice”, equal opportunities, financial accountability to the last penny, smooth public relations to let the public know that they are there and so on,[object Object], A building, a phone system, intranet/ website/ customer and back-office systems strong enough to give people the information they need for complete public accountability,[object Object],Sub-contracts for cleaning, food, stationery (lots and lots of paper!), maintenance,[object Object], A Human Resources department, disciplinary and grievance procedures, appraisal and career,[object Object],development system,[object Object], Salaries, bonuses, pension provisions, cars and allowances for indirect staff and senior managers all at competitive market rates,[object Object], And so on and so forth,[object Object],HOW SOCIAL ENTREPRENEURS CAN HELP BUILD A TRUST-BASED BIG SOCIETY,[object Object],By Charlotte Young, Chair of School for Social Entrepreneurs and Nick Temple, Policy + Communications Director, School for Social Entrepreneurs June 2010,[object Object],15,[object Object],The University of Northampton,[object Object],therefore: getting back on track,[object Object]
Outcomes based commissioning ,[object Object],Ignores the equity required in the process of delivery,[object Object],Neutral regarding how the contractor achieves the outcomes- performativity,[object Object],Services cease or don’t expand when fixed outcomes are met,[object Object],Unintended outcome ignored,[object Object],16,[object Object],The University of Northampton,[object Object]
Social Impact Bond ,[object Object],requires the taming of an issue to agree on the metrics of success,[object Object],Secures long-term investment to create short-terms savings in government spending,[object Object],Enticing, but is very close to PPP without consideration of who the ‘social investors’ are, and what return on investment they require,[object Object],17,[object Object],The University of Northampton,[object Object]
Personal budgets,[object Object],Leads to a ‘retail consumption’ model of service provision and use,[object Object],Individual budgets without mutual support misunderstand the nature of public services.,[object Object],Replaces relationships with market transactions,[object Object],Buying a dog with a personal budget,[object Object],what users need is long-term relationships of mutual trust if they are going to benefit.,[object Object],drift to Maybelline model of services,[object Object],18,[object Object],The University of Northampton,[object Object]
Mixed provision is no panacea,[object Object],Pathways is led by Jobcentre Plus in some areas but is contracted out to third sector and private organisations in over 60 per cent of the country. ,[object Object],The National Audit Office found that there is no evidence that the programme is performing better or costing significantly less in contracted out areas than in those run by Jobcentre Plus.,[object Object],the private contractors were only really any good at the easy bits of the contract - the volunteer particpants in the scheme who were keen to get back into work. ,[object Object],When it came to the really hard, time consuming, expensive cases - people who were reluctantly forced onto the scheme - no provider excelled, but the private sector performed even worse than Jobcentre Plus.,[object Object],One third of prime contractors and two thirds of subcontractors expecting to make a financial loss.,[object Object],National Audit Office  28 May 2010 ‘Support to incapacity benefit claimants through Pathways to Work’.,[object Object],The University of Northampton,[object Object],19,[object Object]
Relational contracting,[object Object],Tony knows more than me!,[object Object],increasing the degree of contractual incompleteness can enhance efficiency (Wu & Roe 2007),[object Object],20,[object Object],The University of Northampton,[object Object]
Coping with the problems,[object Object],not seeking to propose a ‘one size fits all’ solution that tames the wickedness of this issue,[object Object],The University of Northampton,[object Object],21,[object Object]
Trust,[object Object],Hidden currency of contract success,[object Object],Large number of small interactions,[object Object],Regular interactions,[object Object],Direct transaction ,[object Object],Open, transparent sharing of trust feedback,[object Object],Technology now exists to provide for micro-transactions, micro-manufacturing and transacting trust relationships- ebay, paypal, facebook, smart phone apps,[object Object],22,[object Object],The University of Northampton,[object Object]
Co-production,[object Object],reduce or blur the distinction between producers and consumers of services, by ,[object Object],reconfiguring the ways in which services are developed and delivered,[object Object],services can be most effective when people get to act in both roles ,[object Object],as providers as well as recipients.,[object Object],23,[object Object],The University of Northampton,[object Object]
Pro-suming,[object Object],Prosuming is the creation of wealth without being paid for it, doing it for yourself or to give it away. Alvin Toffler, Third Wave 1980,[object Object],In mental health- peer provision,[object Object],24,[object Object],The University of Northampton,[object Object]
To develop NEF,[object Object],Define public service clients as assets who have skills that are vital to the (cost-effective) delivery of services.,[object Object],Define work ‘long-term share value’ to include anything that people do to support each other.,[object Object],Include some element of reciprocity.,[object Object],NEF example “engaging disaffected 16-year-olds by using them as tutors for 14-year-olds, and achieving both major academic improvement for both and reductions in bullying.”,[object Object],The value of the engagement, and consequent efficiency, is lost to the system,[object Object],Let the 16-year olds earn ‘sweat equity’,[object Object],NOT – more ‘procurement with new organisations on the same, old, terms,[object Object],25,[object Object],The University of Northampton,[object Object]
The University of Northampton,[object Object],26,[object Object],Co-own,[object Object],Co-operate,[object Object],co-design,[object Object],co-deliver,[object Object],co-finance,[object Object],co-decide,[object Object],co-assess,[object Object],Co-produce,[object Object],Pro-sume,[object Object],value unpaid labour,[object Object],3rd job,[object Object],contract ,[object Object],purposively,[object Object],develop ,[object Object],trust ,[object Object],reward ,[object Object],reciprocity,[object Object]

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