Hurd hints at legal definition for social enterprise

Hazel Blears MP

Hurd hints at legal definition for social enterprise2

Governance | Vibeka Mair | 27 Oct 2011

Former Communities Secretary Hazel Blears MP has called for a legal definition for social enterprises, while minister for civil society Nick Hurd has conceded that such a definition may be required.

Blears made the call last week during a parliamentary debate on the Public Services (Social Value) Bill, in which minister for civil society Nick Hurd successfully passed amendments on behalf of the government to remove the term ‘social enterprise’ from the Bill’s title, and remove social enterprise strategies from the Bill.

In the two-hour debate, Labour MP Blears, who objected to removing 'social enterprise' from the Bill's title, spoke of her concerns around the definition of social enterprise:

“Some ministers have told me that it [social enterprise] is anything not in the public sector, and I am increasingly worried that the integrity of the social enterprise sector is being worn down because organisations that are clearly not social enterprises are parading as them.

"Will the minister tell us where we can get a legally-agreed definition of social enterprise?”

In response, Hurd admitted that such a definition could be needed in the future:

“In terms of where legal definitions may emerge and the need for them, one has not perhaps been required up to now, although that may change.”

Blears: social enterprise brand could get tainted

Blears told that she was encouraged by Nick Hurd’s comments, and promised to hold him to it:

“I put some questions to Hurd about a definition for social enterprise, as the sector is growing. I think it is now quite urgent because otherwise we are going to get in a terrible mess where the brand of social enterprise becomes tainted because we haven’t got a proper definition.”

She added that she was especially concerned about the NHS 'right to provide' agenda, whereby public bodies spin out from the NHS and become mutuals and social enterprises:

“[Health Secretary] Andrew Lansley says he wants the NHS to be the biggest social enterprise in the world. This is big money, and it’s public money. I therefore think if taxpayers’ money has been used to provide the assets then there has to be an asset lock. Because otherwise what you could have is an undercapitalised social enterprise that folds three years down the line, and Capita takes it over.

“Therefore you’ve transferred public assets into the private sector with no compensation to the public purse – I think that’s wrong.”

Blears: 'Hurd is a lone voice'

Blears also expressed sympathy for Hurd who she said “genuinely believes in the agenda” to enable more social enterprises to deliver public services, but was a “bit of a lone voice” in the government.

“What’s happened to the Chris White Bill is that it’s almost been gutted,” she said. “It’s had the social enterprise bit taken out, it’s now limited to public sector contracts, it’s limited to the pre-procurement stage, it’s only for public services not goods  - it’s really been narrowed down.

“I think there is tension inside government between people like Nick Hurd who genuinely believe in the agenda, and then people who are basically private-sector driven. They see the social enterprise sector impingeing on what they believe really should be the job of private industry and therefore want to limit its influence.”

She admitted that the same problem also happened in the Labour party, where people feared the social-enterprise sector was treading on public-sector territory. “But this is much less so these days and I’m working very hard to make it even less,” she said.

Social Enterprise UK address crowds at Occupy

Elsewhere, Social Enterprise UK’s chief executive Peter Holbrook adressed the camp in Finsbury Square yesterday.

Holbrook met protestors and thanked them on behalf of establishment groups who are working to reform capitalism, saying that changing the way the world does business needs commitment from all parts of society.




Edward Finch
Buzzacott LLP
28 Oct 2011

There is no agreed current definition and it remains debatable whether "social enterprise" should be used as a noun. A legal definition however would be incredibly different to arrive at as it is far from simply being like "a charity" or like "a private company."

Within the scope of the commonly used definitions there are a number of variables such as who pays for the goods and services (the recipient or a public authority) whether there is full payment for them or some subsidy and whether social goods are delivered as part and parcel of the business enterprise or through later application of the surpluses/ profits generated.

It may be more productive possibly to - as hinted at above by Ms Blears - define the entities that are permitted to take on public services in terms of restrictions on profit/ asset distribution, or otherwise capital bonds and guarantees similar to the travel industry.

If a public service deliverer (including care homes etc funded by local authorities) were required to be either asset locked or provide bonds/ guarantees then this would better address the protection of public assets than quibbling over the definition of social enterprise.

Ben Wittenberg
27 Oct 2011

There's no way the existing definition is going get any narrower while government *loves* social enterprise.

It serves their interests best for there to be as many of them as possible, irrespective of where any of them sit on the scale between "actually a charity" and "actually a private company".


[Cancel] | Reply to:

Close »

Community Standards

The community and comments board is intended as a platform for informed and civilised debate.

We hope to encourage a broad range of views, however, there are standards that we expect commentators to uphold. We reserve the right to delete or amend any comments that do not adhere to these standards.

We welcome:

  • Robust but respectful debate
  • Strongly held opinions
  • Intelligent relevant discussion
  • The sharing of relevant experiences
  • New participants

We will not publish:

  • Rude, threatening, offensive, obscene or abusive language, or links to such material
  • Links to commercial organisations or spam postings. The comments board is not an advertising platform
  • The posting of contact details for yourself or others
  • Comments intended for malicious purpose or mindless abuse
  • Comments purporting to be from another person or organisation under false pretences
  • Gratuitous criticism, commentary or self-promotion
  • Any material which breaches copyright or privacy laws, or could be considered libellous
  • The use of the comments board for the pursuit or extension of personal disputes

Be aware:

  • Views expressed on the comments board are left at users’ discretion and are in no way views held or supported by Civil Society Media
  • Comments left by others may not be accurate, do not rely on them as fact
  • You may be misunderstood - sarcasm and humour can easily be taken out of context, try to be clear


  • Enjoy the opportunity to express your opinion and respect the right of others to express theirs
  • Confine your remarks to issues rather than personalities

Together we can keep our community a polite, respectful and intelligent platform for discussion.

Free eNews

#GivingTuesday signs up 400 partners with just over a month until the big day

31 Oct 2014

Some 400 UK-based charity and commercial partners have now signed up to #GivingTuesday – a global campaign...

Over £6m raised in first day of DEC's Ebola Crisis Appeal

31 Oct 2014

More than £6m has been raised by the Disasters Emergency Committee’s (DEC) Ebola Crisis Appeal since...

Centre for Sustainable Philanthropy announces six PhD projects to research giving

31 Oct 2014

The ‘rituals’ of fundraising events and creating the optimal forms of engagement for digital giving...

Homelessness charity breaks ties with founder's estate agency after complaint to Commission

31 Oct 2014

Trustees for homelessness charity House the Homeless have stopped referring clients to the founder's estate...

St Mungo's staff plan new ten-day strike

30 Oct 2014

Staff at St Mungo’s are planning to strike again for ten days from next Wednesday in further protest...

Acevo announces Lord Low is chairing a commission on sector regulation

30 Oct 2014

The chief executives body Acevo has set up a commission on sector regulation that will assess whether...

BeatBullying's technology CIC has not filed accounts with Companies House

22 Oct 2014

A software community interest company set up by the BeatBullying Group in 2012 is almost a year late filing...

Blackbaud launches online giving platform for individual fundraisers

17 Oct 2014

Blackbaud has launched its online giving platform, everydayhero, for fundraisers in the UK in a bid to...

Don't dismiss social media 'slacktivists', fundraisers told at IFC

16 Oct 2014

Charities should embrace and love charity ‘slacktivists’ because social is a great ramp for new donors,...

Join the discussion

 Twitter button