Hazel Blears, former secretary of state for communities and local government, has warned that some members of the coalition government see the social enterprise sector as a way to privatise public services.

Blears was speaking at the Voice11 conference on social enterprises delivering public services. She praised the social enterprise sector for its work in communities, but warned that some people could exploit the “fantastic social enterprise brand.”

“I believe there is a schism in government,” she said. “Some people get the agenda and see the empowerment that the social enterprise sector can bring to public services. However, I believe some people have a right-wing agenda.

“They wish to take services out of the state sector into the private and I worry that social enterprises will be used as a halfway house to transition to privatisation.”

Blears said it was like “money-laundering”:

“For example, you could have a situation were you take a public service out of the state and give it to a social enterprise to provide. Down the line the social enterprise finds they cannot compete effectively, which allows the private sector, Serco or Capita, to come in.

“We have to be very careful. Not everybody in government is truly signed up to the social enterprise agenda.”