Kelly Hall, Robin Miller, Ross Millar
The traditional distinctions between public and private institutions have been increasingly challenged and criticised. Various stereotypes often characterize these discussions, with the public sector seen as bureaucratic and wasteful, or reliable and dependable; whilst the private sector is seen as lean, innovative and customer-centric or as self-serving and profit-driven.
One organisational form that challenges this polarity between the sectors is social enterprise. Often defined as 'hybrid', these organizations are seen as blurring the boundaries among the private, public and third sectors; they are businesses with primarily social objectives whose surpluses are reinvested to address a social or environmental need. Governments have actively encouraged social enterprises to deliver public services on the grounds that they represent a means to achieving more innovative, cost-efficient and responsive public services.
This is especially the case in English healthcare as social enterprises have been actively encouraged to 'spin out' of the National Health Service (NHS). This includes the 2008 Transforming Community Services initiative which gave English NHS community health care services a 'Right to Request' to apply to their commissioners to form new social enterprise organizations into which public services could be transferred (referred to as 'spin-outs'). In doing so this arguably enabled the new organizations to take on the perceived strengths of the public, third and private sectors, with the result being more efficient, innovative and flexible organisations.
Our research explored the notion of 'publicness' within the context of NHS spin outs. By focusing on NHS spin-outs, we looked at what happens to an organization's publicness when it leaves the public sector yet continues to deliver publicly funded services. We brought together empirical data from interviews with NHS spin-outs with a framework of 'publicness'. We explore three publicness dimensions:
First, 'core publicness', which refers to an organisation's ownership and status. To explore this, we asked which sector the spin outs belonged to and found considerable ambiguity and an inability to align with a particular sector. Many felt excluded from the public sector as they were no longer part of the NHS, yet were keen to avoid perceived negative inferences that could be drawn from inclusion in the private sector.
Second, we explored 'dimensional publicness' focusing on the freedom of the organisations to make financial decisions and the extent to which they are subject to government control. As all of the social enterprises were mostly or entirely reliant on government contracts, they remained subject to a high level public control. However, becoming a social enterprise had provided them with a greater degree of financial autonomy as they were able to diversify income streams and explore new partnerships and ways of working which they could not do within the highly bureaucratic NHS.
Thirdly, we explored 'normative publicness' which refers to attachment to public (or private or third) sector values by exploring the extent to which employees believe that the service is part of social welfare. Despite the need to make profit as a social enterprise, we found very strong public sector values within the social enterprises, referred to as an 'NHS ethos'.
The picture that emerges from our research indicates that the transfer of NHS services into social enterprises led to a decline of 'publicness' and a move towards hybridity. They were seen as very much 'hybrid' organizations , located at the intersection between the third, public and private sectors, which enabled them increased economic authority and with it greater flexibility in decision making. They could pick and choose, and take the approach that works for the organization rather than the sector, making the most of any potential partnerships and opportunities.
Whilst they were less comfortable in being seen as exhibiting private sector characteristics it was recognized that this could provide a route to additional funding and resources. Indeed at times these organizations appear to play on this lack of clarity through adapting their sectorial affiliation in response to the audience and opportunity with which they were engaging. Nonetheless, an equally important finding is that these social enterprise spin-outs are still significantly public and bound by political control, especially in relation to their funding, which for many comes wholly from public sector contracts.
This ongoing 'publicness' therefore makes these organizations vulnerable and limits their ability to develop their own distinct characteristics and practices. Government policy was designed to unleash public sector entrepreneurship and innovation; however, our findings suggest that such innovation is being constrained as a result of an ongoing publicness.
For full details of the study see Hall, K., Miller, R. and Millar, R. (2015) 'Public, Private or Neither? Analysing the Publicness of Healthcare Social Enterprises', Public Management Review, DOI: 10.1080/14719037.2015.1014398