The Social Enterprise Investment Fund (SEIF): unlocking potential in health and social care?

04 November 2011

Social enterprise in health and social care is an expanding area but with opportunities come considerable challenges, write Kelly Hall and Ross Millar

Under both the Labour and Coalition governments, social enterprise has been championed in health and social care as a vehicle for innovation and empowerment for staff and as a means to increase choice, greater responsiveness and improved outcomes for users. A variety of policy measures have been introduced to encourage and facilitate social enterprise. Most notably, this has included enabling NHS staff to spin out of existing primary and community services into new social enterprise models of delivery under 'Right to Request' (with 'Right to Provide' appearing to continue this policy trend).

The Social Enterprise Investment Fund (SEIF) was established in 2007 to support social enterprises in the health and social care sector. The £100 million fund provided advice and seed funding for social enterprises 'starting up' and also to enable the growth of established organisations already delivering health and social care services. Administered by the Social Investment Business (and Local Partnerships), the SEIF offers loans, grants and business support. The initial £100million set aside for the fund ended in March 2011 but the fund is set to continue in 2011-12 with a further year of funding being announced by Andrew Lansley earlier this year.

Whilst claims have been made about social enterprise to date, we find limited evidence about its overall impact especially within the health and social care context. In looking to fill important knowledge gaps in this area, research being led by the University of Birmingham is evaluating the effectiveness of the SEIF in supporting social enterprises within the health and social care sector. The research carried out a national survey of all SEIF applicants along with in-depth interviews with representatives from social enterprises, commissioners and policy makers.

To date, the research team has found a number of different ways in which the SEIF has made a positive impact in supporting social enterprises to enter health and social care markets and to deliver services. It presents evidence of how the fund has enabled social enterprises to reach out to a more diverse range of users, encouraged innovation by testing out new ideas for service delivery and supported the development and empowerment of staff. For example, the survey found more diversity in services and users, as well as increases in workforce relations. Evidently, across the spectrum of funded organisations (from the relatively small scale community well-being services to the large scale Right to Request organisations), SEIF financial and business support has been crucial.

Despite these strengths associated with the SEIF, the research also found issues and challenges in relation to the development and ongoing sustainability of social enterprise. Whilst the SEIF has enabled some social enterprises to secure new contracts for service delivery and to generate additional surpluses; over half of all surveyed investees have not yet secured any new contracts. The survey also found that 13% of funded organisations were no longer in operation, two thirds of which closed due to a lack of funding or insufficient support from public bodies such as the PCTs. This may be at least in part due to the current economic context and public sector cuts which have brought new challenges to social enterprise organisations and hindered the potential of the SEIF to support them.

Issues also exist for commissioners who often are not in position to invest in social enterprises which they consider high risk and lacking in business infrastructure. Many social enterprises remain very small scale and reliant on grant funding so are not in a position to tender for public sector contracts. A policy context centred on organisational restructuring and efficiency savings makes it even more difficult for social enterprises to enter the health and social care market place. This suggests a significant need for more business and strategic planning support for social enterprises if they are to be commissioned over those more established public or private sector organisations. Whilst the SEIF has directly supported social enterprise development using their own business advisors and through funding external business support and planning, the ongoing sustainability and growth of social enterprises within health and social care remains an issue.

Clearly social enterprise in health and social care is an ever expanding area. What this research shows is the promise of social enterprise but also the challenges of funding such organisations.

This article is based on research commissioned and funded by the Policy Research Programme in the Department of Health. The views expressed are not necessarily those of the department.

Dr Kelly Hall and Dr Ross Millar are research fellows at the Health Services Management Centre, University of Birmingham