Does David Cameron really want a Big Society?

Much has been said lately of co-operatives, mutuals and social enterprises. As long ago as 2004 Rebecca Harding at Delta Research was arguing for a new definition of social enterprise and if anything the waters have become murkier since. If there is a problem in the lack of a definition, and I am in the 'there is a problem' camp, it is that the lack of a definition is holding back the growth of the sector.

That is not the same as saying that we need any new legal forms of enterprise as suggested by Luke Fletcher on the Social Enterprise website (http://www.socialenterpriselive.com/section/features/policy/20120117/social-business-%E2%80%93-the-missing-piece-the-social-economy-puzzle), there are already plenty of ways of creating the right legal forms. It is not types of trading vehicle that are holding back growth but the unidentifiable nature of the underlying enterprise that is the problem.

This manifests itself in two ways. Firstly, it is very difficult to measure the sector, and therefore to judge its overall impact and growth, when its trading vehicles are indistinct from any other. Secondly, it is very difficult for those choosing where to spend their money (state commissioner or individual) to know exactly who they are dealing with. As pure 'show me the money' capitalism finds social enterprise a more serious competitor it can be guaranteed that it will find ways of looking more and more like social enterprise. Whilst I understand all of the arguments about encouraging risk capital by allowing investors to share in the profit of social enterprises, the line needs to be drawn clearly somewhere or it will be possible for anyone to call themselves a social enterprise just because one of their directors bought a Big Issue last week.

This to me is the crux of the problem, and it is especially valid in an age where myriad new social enterprises are being encouraged to bid for state contracts but without any clear structure to support the way that they are to compete. Either the Government has no vision on the subject or its vision is of a huge free for all in which capitalism morphs into whatever it has to look like to retain its share of the business and then runs off with the money as always.

Two things are therefore required, in my opinion. A clear definition of what constitutes a social enterprise and the opportunity (not a requirement) for enterprises which wish to do so, and meet certain criteria, to use a new alternative suffix to Ltd, Plc and LLP. My suggested definition in the Green Paper is "commercial enterprises which trade with defined social goals and which are permanently and beneficially owned by their community" and perhaps they might be designated as SET - social enterprise trust?

On a separate but related subject I am not convinced that mutuals or employee-owned businesses should actually be in this group at all. I struggle to see them a social enterprise, they are just a more homely version of capitalism. Social enterprise should be for the benefit of a wider community and should return a substantial part of its profit to that community in one way or another. I would not rule out employee or investor ownership of a part of such enterprises but it must be controlled and they must be kept away from the main stock exchanges and vulture capitalists by means of their own grouping within the corporate sector. There is a danger that because capitalism has gone to such an extreme we now embrace anything that isn't purely capitalist as a social enterprise. That would be equally wrong and may well let 'free for all' capitalism back in the door to ensure that social enterprise never gets to any useful scale or even dies.

The suggested change would therefore achieve two things: it would provide a stronger platform for investment in the sector, even for partnerships with commercial firms, and it would enable to sector to be measured, rewarded (perhaps through tax or other incentives) and protected. The Unofficial Big Society Green Paper (www.bigsocietygreenpaper.org) goes further and suggests that many of the public sector spin outs should join an entirely new sector which remains in state ownership, but that is too big a diversion for now, we must first clear the fog.

Not long ago we had Lansley and Cameron giving different definitions of what constitutes social enterprise and now we have a push for co-operatives. Although this is welcome I see it as a further blurring of the lines between pure capitalism and social enterprise which can only be to the benefit of the former. Something clearly needs to be done or the cynic in me will have to conclude that Cameron is in fact a double agent - trying to appear #socent friendly whilst playing divide and rule with the sector. In that case the Big Society will have been nothing other than a tool to persuade the poor to help themselves whilst keeping any popular movement toward social enterprise (and its attendant gradual redistribution of wealth) under full central control.

Happy New Year

Hi Dave

I have read your New Year message and am, well, not convinced. Not that it was any worse than any of the others - you could have all got them at the same shop. I didn't expect any stunning new policies to have been prompted by the jokes from your Christmas crackers but I thought you might acknowledge that something new is needed. Or even that we would review our progress so far and do anything new that looked as if it could deliver more than the current policy set.

Unfortunately, the message from you seems to be to keep faith, to enjoy the Olympics and footie and try to forget that we are poor. If the rest of the world comes to visit we might be able to earn enough money from them to keep the wolf from the door for another year or two.

That's a long shot and will see you out of government if not in the next 12 months then at the end of the coalition, guaranteed. People are bored. They know that capitalism has gone to too with its 'free' market and that government and capitalism between them are squeezing the substantial, tax-paying, population until it is entirely disillusioned with politicians and big business, of all colours and types. This is the way to disaster. Not just for the coalition but for the whole country.

The Big Society, and its commercial twin social enterprise, are not going to singlehandedly drag us out of the mire without some help from you. The Big Society must equal Little Government. The stunning rise in overall taxation over the past 15 years has been largely to drive ever more state spending, much of which is with foreign companies. No other country willingly hands over as much of its turnover and therefore profit as we do. That is why we are shrinking relative to the rest of the world.

I am sorry to harp on about it but the Unofficial Big Society Green Paper took a long hard high level look at our strategic direction and found it flawed. We need more investment, we need a proper national balance sheet, and we need proper national insurance and pension arrangements which are affordable and fair. Creating these, and funding them by the dismantling of the many machines and layers of government, is what will solve our problems.

If you have not done already please read the Green Paper (www.bigsocietygreenpaper.org). I sent you one in early December. It shows how social enterprise, in a new and strategically constructed form, can help to solve all of our problems. Done in the right way, and genuinely for the benefit of the largely silent, tax-paying majority who fund this country, it will energise and engage the people far more than any sporting success or any temporary bubble of income which we gained by spending billions on hosting sports events. It will cure our budget deficit and solve the pensions and healthcare funding crisis.

If you seize the moment to offer people a New Deal as in the Green Paper you will ensure that the feelgood factor of the summer is not transient and you will give the investment in those events a clear cut opportunity to provide a greater legacy than prettying up parts of the East End. A true legacy which enhances national wealth and builds a big society for generations to come. One which tips the poison out of the chalice that we are about to hand to our children, and affords the opportunity to refill it with clean, healthy water.

So please, for 2012, give social enterprise a real chance at capitalism's top table, re-take control of our spending and strategically create a real legacy based around growing national wealth and a truly big Big Society. One in which we all understand our role and the scale of the opportunity.

Happy New Year!

Gareth