UK social enterprises fear losing almost £100m worth of NHS contracts

Social enterprises in the UK are at risk of losing almost £100m worth of health and social care contracts, according to Social Enterprise UK (SEUK).

SEUK claims a draft policy proposal on integrating services, published by the government in February, has led some National Health Service (NHS) bodies to believe that they should bring as many services as possible ‘in-house’, to be delivered by statutory providers rather than private businesses, including social enterprises.

At least £97m worth of health and social care contracts held by social enterprises which are up for review in the next 12 months could be lost, according to SEUK, which represents social enterprises in Britain.

Peter Holbrook, CEO of SEUK, has sent a letter to Matt Hancock, secretary of state for health and social care, outlining concerns among SEUK members across the country.

The proposals have been interpreted by some parts of the system as a message... that they should take services away from social enterprises and bring them back in house – Peter Holbrook, SEUK

“The proposals have been interpreted by some parts of the system as a message from [the Department of Health and Social Care] and NHS England that they should take services away from social enterprises and bring them back ‘in house’”, Holbrook said in the letter.

SEUK told Pioneers Post it was aware of two social enterprises whose existing contracts with health bodies had not been renewed, for reasons it believes are linked to the policy proposals.

Others may also be affected, SEUK believes. Although the proposals have not yet been set out in Parliament, social enterprises are concerned health bodies will start making changes even before a law is passed. This could be for a number of reasons, according to Andrew O’Brien, director of external affairs at SEUK. Some bodies may be keen to anticipate upcoming policy changes, others may take the opportunity to go back to an older system which didn’t involve the private sector, while some hospital trusts, as service providers, might want to keep profit-making contracts for themselves.

The February white paper, Integration and Innovation: working together to improve health and social care for all, sets out legislative proposals for a Health and Care Bill. The “integration” element includes proposals for greater collaboration between health and social care service commissioners and providers, including NHS bodies, local authorities and the private sector.

“Instead of working independently, every part of the NHS, public health and social care system should continue to seek out ways to connect, communicate and collaborate so that the health and care needs of people are met,” the white paper states.

However, O’Brien said the term “integration” was problematic as it could give the impression that the government was aiming to regroup all health services within a single organisation, whereas the principle behind it was rather to ensure better coordination between different entities.

The NHS has made clear Integrated Care Systems will thrive on strong cooperation across health and care, including with social enterprise – government spokesperson

The problem often came down to a lack of understanding and acceptance of the value and expertise of social enterprises, according to O’Brien. In some places, the idea of health and social care services being delivered by social enterprises (rather than public providers) “was never really accepted”. 

However, a spokesperson for the Department of Health and Social Care told Pioneers Post: “Our Health and Care White Paper follows the NHS’ proposals for improvement and lays the legal foundations for a health and care system fit for the future as we continue on our roadmap to recovery.

“The NHS has made clear Integrated Care Systems will thrive on strong cooperation across health and care, including with social enterprise.

“It will help local health and care systems deliver higher quality care to their local communities, in a way that is more joined up, less bureaucratic, and more accountable.”

SEUK has called for an extension of social enterprises’ NHS contracts to April 2023 at a minimum; a statement from the health secretary and the CEO of NHS England in support of social enterprises as providers within the health system, stating that integration does not mean only using statutory providers; and for the department to work with SEUK to discuss the future role of social enterprises in the health and social care sector.

Around 4% of the UK’s 100,000 social enterprises work primarily in healthcare and another 4% in social care, according to SEUK research. O’Brien acknowledged that “no social enterprise has the right to contracts just because it is a social enterprise”, but said the data showed social enterprises performed well.

Research quoted in the letter to the minister showed that social enterprises were rated higher than peers by the care quality watchdog, and that they were more financially sustainable, with 92% of social enterprises making a surplus, while 52% of NHS providers recorded a deficit in 2018/2019.

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