It’s clear, whoever gets in on Thursday, that tough times are ahead.

So how will people who are committed to improving society respond? Faced with budget cuts, disappearing sources of funding, drops in income and, in many cases, increased demand for services, what will we do?

The easy option will be to find someone else to blame. And let’s face it, we won’t have to look very far. Government, the Council, the money markets, and the threat of IMF intervention for starters. There’s a story in the Yorkshire Evening Post today of a charity shop in Leeds which is closing down due to rising costs – in particular a 30% rent increase. Their landlord is the local Council.

I know this particular charity shop well. I’ve bought a fair bit from their furniture store over the years. I’ve also donated a fair bit to them – including, in error, my wife’s cherished, much-played acoustic guitar (I was supposed to give them my not-so-cherished, little-played guitar, but got the cases mixed up, and gave them her’s instead).

The staff are great – and they differ to many charity shops because they see part of their role to be distributing low-cost goods to local people – whereas many charity shops exist primarily to generate as much income as they can for their cause – which often isn’t local.

So I can understand why they’re angry and upset. But are they right to blame the Council? I’m no big fan of Local Authorities but I’m not sure what they’re supposed to do in cases like this. £3,000 is a fair bit of extra money to find, but if that’s the difference between you surviving and going out of business, then perhaps you need to look to yourselves, as well as to your Landlord, for solutions. I know from having looked at units on that Industrial Estate that the rent is cheaper, and on better terms, than much commercial property in Leeds. So, other than giving any charity in Leeds free rent, I’m not quite sure what the Council is supposed to do.

There’s another story on the Guardian Leeds blog of a local PDSA charity shop which has teamed up with Leeds Met University to re-brand and re-launch their struggling shop – situated right in the heart of studentland. Who knows if it will work, but good on them for trying to work out a new way to make their shop viable.

The point I’m making is that if we are to continue to deliver social benefits, we need to find ways to survive in tough times. And there may be times when we can’t survive – or that we survive in a different way (the Salvation Army are keeping their charity shop, but closing the furniture warehouse). I don’t doubt how difficult it is for the Salvation Army to make things work. But we’ll get nowhere if we just blame others for our inability to find ways to continue doing what we do.

Phillip Blond, director of think tank ResPublica, wrote a letter to the Observer on Sunday questioning why left-leaning commentators are hostile towards the Tories’ Big Society plans.

His letter included the following assertion:

Volunteering, especially among professional classes and the young, has doubled in recent months and the wish to make a difference is a common and rising aspiration.

I’m sure you’ll agree, that’s a pretty incredible claim. I think I would have heard about it if the number of people volunteering had shot through the roof since Christmas. I can imagine that the odd person reviewed their life choices and made a new year’s resolution to start giving something back, but I somehow doubt that numbers have doubled.

I would love to be wrong. I’ve asked Phillip Blond for clarification, but am as yet to receive a reply.

The wider point here is that it strengthens the argument of those of us who believe that the foundations for the Tories’ Big Society plans (which Blond’s Red Tory thinking has no doubt inspired) are pretty weak. Blond, in his letter, questions why people like me are hostile towards Big Society. It’s this kind of nonesense that we question. If one of the Tories’ most revered thinkers is capable of such seemingly daft assertions as this, is it not right for us to be sceptical about their ambitions for transforming society?

The only scenario in which volunteering could rise in such numbers is under a mismanaged economy, with hundreds of thousands of people put out of work by ideologically driven cuts, dressed up as Big Society.

Funding cuts at Universities are in the news again today. I heard someone from one of the Unions responding with the old classic “We can’t be expected to do more with less.”

Expect to hear variations on “You can’t make a silk purse out of a sow’s ear” time and again over the next few years as cut follows cut follows cut. Union officials and opposition MPs will tell us that it’s inevitable that a 20% cut in a budget will lead to a 20% cut in a service.

Is it inevitable? I think it is if you have an archetypal public sector mindset. Where your only response to a cut in your budget is to cut your service – with the people you serve being the ones who lose out. Where you put out a press release saying how terrible it is that services will be cut, when what you really mean is that budgets have been cut – and your response is to cut the service. Not, perhaps, to consider how you could offer a different service with less money.

But are you telling me that there aren’t ways that services could be delivered differently – saving money whilst also improving services? I’m pretty sure that we’ll be reaching limits in terms of the obvious cost savings – I wouldn’t want to be in the Post-It Note sector in the coming years. Yet perhaps it’s time to start thinking a bit more radically – about ways to tackle failure demand for example.

Perhaps we also need to start challenging vested interests a bit more. I can’t say I truly believe that the BMA have the best interests of patients at heart, for example. They say they’re looking after us, but I think we all know who they’re really looking after. And are University academics really the selfless souls we’re told they are? Or are many of them unmanageable mavericks who need to be dragged into the modern world where, in case you haven’t noticed, there’s not as much money around as there once was.

I know that now is not the time for soundbites, but I believe we are entering a defining decade for British society. How will we respond to a rolled-back state? Will we fight every cut, even though it’s abundantly clear that we’ve lived beyond our means for years? Or will we take responsibility for trying to work out how to make society a better place to live – whilst having a lot less money to do it with?

I don’t doubt it’ll be tough. But the optimist in me believes in the resourcefulness of human beings. Yet the pessimist recognises how easy it is for each of us to pass the buck – to blame it on the bankers (don’t worry, I blame them too), or management, or Government, or whoever the next bogeyman will be.

So what am I doing about this? I’m setting up a new social enterprise – and one of the things we’ll do is to work with businesses on how to do more with less. Looking at how they can innovate and win new business by finding new markets – particularly through delivering more social benefit. Looking at how they can cut their overheads, or collaborate with others. I don’t pretend it’s easy, and I certainly don’t think we’ll have all the answers. But I care enough about society not to just see a decline in services as inevitable. That, for me, is what being socially enterprising is all about.

I had a good, productive day in London yesterday. I went to a Health and Social Care conference organised by the Social Enterprise Coalition, then squeezed in the third social impact camp before heading home.

I do a fair bit of work in social care so I was keen to hear from a few people who are active in this field. All too often speakers at conferences disappoint, but most of them were pretty good yesterday (although ironically, for a health conference, I counted four contributors who hadn’t made it because of illness. But the reshuffled speakers did well).

We heard from, amongst others, Lance Gardner from Open Door in Grimsby, Victor Adebowale from Turning Point and Geoff Walker from Sandwell Community Caring Trust. There were some interesting common themes.

Everyone was pretty clear that we’re entering a period of financial constraint, the likes of which we haven’t seen in years. No-one’s underestimating the impact that could have, yet there was a sense of optimism too. It’s widely accepted that the much-needed investment in the NHS hasn’t resulted in a corresponding improvement in service. It’s unfair to say that the NHS had just done more of the same but with more money, but it’s not that unfair. The optimism from the speakers came from realising that big cuts could stimulate proper, radical reforms to how services are delivered, with systems built around the people who should be served. Social enterprises could play a big part in those changes.

Another common theme was to do with social enterprises being well placed to offer a co-ordinated approach, in a market dominated by silo thinking. The NHS, Adult Social Care, the Police, Education, Neighbourhoods and Housing etc etc all talk the language of partnership, but struggle to step outside of their comfort zones, particularly when doing so may threaten a budget. Social enterprises, the speakers suggested, can be more nimble, and offer a chance to bring together budgets to deliver more co-ordinated services. Turning Point’s Connected Care service seems to be a case in point. I accept a lot of this, but have also heard enough stories of social enterprises which clearly deliver outcomes for a wide range of government departments, finding that none of them wants to take responsibility for funding it. Buck-passing in place of joined-up working.

A third theme was around people and purpose. Geoff’s message was that at Sandwell their big success has been to re-connect their staff with the wide-eyed enthusiast who decided to be a social worker twenty years previously. We all know how so many people have been worn down by the system, and have lost any real sense of the purpose of their work. Through treating his staff well, through keeping decision making and responsibility as close to the ground as possible, Sandwell have made impressive improvements in staff absenteeism. Last year average absenteeism was one day per employee. Their local authority counterparts take more than three weeks leave through sickness. Immediately you have a substantial gain in productivity, and a powerful indicator of greater happiness and wellbeing at work. That has to have an impact on the quality of service delivered.

The challenge is about how to make big differences in the NHS. The examples we heard of are impressive, and Turning Point and Sandwell have expanded from their local roots, as have other social enterprises like P3. But, for me personally at least, it’s still not completely clear what the magic ingredients are in these social enterprises, and whether those ingredients can be shared. The suspicion remains that they are one-offs, founded by charismatic, maverick entrepreneurs, deeply rooted in their communities. As such are they replicable? And do we waste our time trying to work out how we can be a bit like them?

I suppose the answer is that in some way, we have to keep trying to work out what those magic ingredients are. And, for me at least, yesterday gave a bit more of an idea as to what those magic ingredients are. A key one is people. Treat your staff well and exciting things start to happen. Geoff was making a clear link between the lack of shareholders at Sandwell, and their ability to treat their staff well. He also had unkind words to say about HR managers, which given that I’m married to one, I’d have to disagree with.

But I can see that he’s saying, particularly about how the loud cries of impatient shareholders can distort a business, but I don’t think it’s necessarily the case that one leads to the other. Keeping money in the business has, in their case, achieved impressive results. But there are loads of for-profit businesses out there which treat their staff really well, whilst balancing that with the need to make money for owners or investors. The progressive ones realise that they’ll probably make more money by treating their staff well.

This is one reason why I’m keen to see social enterprises to jump out of their cosy, structurally defined niche, to start learning more from other businesses which you may class as “progressive”. I bet you that Geoff at Sandwell, and Martin at P3, both high achievers in this Best Companies to Work For poll, will learn more from the other businesses in that list than they will in their local social enterprise networks.

I had a short piece in the Good Business supplement in the Guardian yesterday. The question was What next for social enterprise?. Here’s what I wrote:

Social enterprise has been given the benefit of the doubt in the last few years. As a society we know things aren’t quite right, and we also know that doing what we’ve always done isn’t going to solve some of the big issues we face. So these clever little businesses, with heart on sleeve and eyes on the bottom line, have offered politicians, bureaucrats and communities hope.

Yet amid all the warranted enthusiasm there is still doubt. Even the best social businesses can find it tough to keep going in markets where, by definition, life isn’t easy.

And then there are the sub-prime social enterprises, enterprising in name but really just rebranded consumers of government funds. We all know they exist.

Over the next few years we will all keep a very close eye on how the state spends the increasing amount of money they’ll take from us in tax. This increased scrutiny could well stifle innovation and leave us with business-as-usual approaches just when we need something quite different. So it will be up to social businesses to do more with less – while telling good, honest stories about how they’re changing things for the better.

I've been enjoying witnessing the Co-operative Labour movement making it abundantly clear that they are the real co-operators over the last couple of days, since the Tory announcement of their plans to encourage co-operatives and social enterprises to deliver public services.

I sent my previous piece on this via Twitter to Phillip Blond, the architect of the Tory plans.  Here's his reply:

Thanks – will read and study.  But surely just a negative reaction is wrong and a misaligned reflex.  This is a social good. 

This is a social good.  Blond clearly doesn't lack confidence. 

First things first, I haven't really read any of his work in any detail, or read the detail of the Tory co-op plans.  I will do as soon as I've moved house and unpacked the boxes in ten days time.  But I've kept an eye on what he's been saying in the newspapers and elsewhere.

Secondly, I think it is a fairly negative piece, so I take his point.  And that's a fault of mine – I try hard to write positive stories, and to be constructive, but I know that I can dwell on the negative sometimes.  But show me a writer who doesn't.  It's easy writing.  And there are downsides to be told in a social enterprise sector which sometimes only tells the good stories.  And I enjoy having a go at George Osborne. 

Yet I'm interested in Blond and his Red Tory ideas.   I'm also intrigued by his background.  Like me, he grew up in 1980s Liverpool and he says the impact of Thatcherism on the city has been a big influence on his life and work.  I'd say the same.   I can see how to this day Thatcher's policies – and the Militant response – did a lot of damage to my home city, and that legacy is still with us.

But I can't help but question the claim:  this is a social good.  Says who?  Who's to say that opening up the market for public services to social enterprises won't create a massive amount of damage to a fragile, skint society?  Or that the real impact of opening up to social enterprises will be to create a market in which the private sector will eventually dominate, thus (potentially) further alienating local communities?  Or that the undoubted social good that will come from the many great social enterprises that will deliver services will be counterbalanced by the regular bailouts of the ones that fail?

Let me finish on a positive.  I, like many other people, see the damage that poor public services do to individuals and communities.  I also believe that we need socially enterprising approaches to changing society – and some of those will come in the form of social enterprises.  So, I'm going to try hard to be constructive, as well as critical, in the debate about mutuality and public services.  I hope the people who seem to only see the upside of these proposals – who see them as a clear social good, might also peer over at the slightly less green grass on my side of the fence. 

George Osborne was on the Today programme this morning talking about Tory plans to open up the delivery of public services to social enterprises  - in particular, it seems, to co-operatives.  I assume Steve Hilton has decided that we're not awake enough to understand what a social enterprise is at 7.10am (he's probably not wrong), so he instructed him to just keep saying the word co-operative as often as he could in three minutes.  It is a lovely word after all.

I have written a lot about how public services need to improve.  I am also an enthusiast for socially enterprising approaches to delivering services.  But I'm suspicious of political enthusiasm for social enterprise.  In this case I'm picking on the Tories, because I find them (and Osborne in particular) unconvincing, but I'm pretty sceptical about Labour's motives in this field too.  

There's something of the four legs good, two legs bad dogma about politicians embracing social enterprise. They are so desperate (as they should be) to work out ways to make the UK a better place to live that they can end up believing that transferring services to social enterprises will magically make things better. They can definitely make a big difference if the social enterprise is good at what it does.  But they are not inherently better at doing things than other organisations or businesses.

I also have a question about the likely capacity for social enterprises to deliver services.  I know all the stats about how the sector is expanding, but I'm also aware that not everyone is cut out to be an active member of an employee-owned business, of the kind Osborne is proposing.  I'd be a rich man if I had a pound for every public sector employee who's told me that they're hatching plans to set up in business, to break free from the dead hand of bureacracy.  I'd have about £3 if I had a pound for every one that's done it.  Osborne said this morning that services will only be transferred to co-operatives if that's what staff want.  I think that, sadly perhaps, is a big if.  

So, if I'm right, and the public sector won't be transformed by hordes of public sector workers all desperate to set up co-operatives, how will we find different ways to deliver services?  Enter the private sector – particularly if the Tories get into power.  I suggest that politicians will keep talking about the opportunities for social enterprises, pointing us to that lovely social enterprise which collects bulky waste in Liverpool, whilst plenty of the opportunities will actually be gobbled up by the private sector, who will soon speak the language of social responsibility with more fluency than your average social entrepreneur.  

I do think that will happen more quickly if the Tories get in.  Read for example this account of a recent Politics Show about Michael Gove's Free School plans.  They interviewed Tory MP Tim Yeo, who made it clear that he thought that the Free School plans were flawed – not because schools should not be independent, but because the organisations that will run them won't be allowed to make a profit.  One rogue Tory does not a party make, but I very much doubt that Yeo is alone.  

Gove wouldn't dare allow idea of private-sector-run Free Schools to get in front of voters.  But two years into a Tory government, with restless right-wing backbenchers giving Cameron grief, you can well imagine that things might change.  Co-operatives'  real value to Osborne and his colleagues may be to clear the way for further privatisation of public services.  

I ran my final workshop today as part of a Charity Bank in the North programme of support.

The workshop helps third sector organisations to consider ways in which they can generate income, and, to use the much-used phrase, work towards sustainability.

Opportunity Knocks

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Picking up on the comments on the last post,  it's clear that social enterprise isn't for everyone.  The issue is that it is often seen as a way out of a sticky situation.  As our experience at the fairtrade shop illustrates, trading can (of course) get you into a stickier situation than you were in the in the first place.  So whilst it's the right thing for some to explore, it's not the magic bullet that it's sometimes seen to be.  It's always worth considering why you are being encouraged to set up a social enterprise.  It might be a genuine desire to encourage enterprising solutions to intractable problems.  Or it could just be a way to pass the buck and not fund an activity which should be funded. 

The main message in my workshop is that you've got to take responsibility for the situation you're in.  To start with we do an exercise which looks at the context people find themselves in.  What's happening in their organisation?  Their sector? For the people they serve?  And in wider society?  This is really useful and brings out some common issues – a push towards partnership working, increased unemployment, an imminent change of government, funders who don't fund what we think needs doing, people who won't pay for services, etc etc.

These are all important issues – but my next question is:  Given all that, what are you going to do about it?  It's comforting to point to external factors which stop you from being the kind of organisation you'd like to be.  But I'd argue that the organisations that will be sustainable – in other words those which will keep delivering benefits – will be the ones that understand the context they're in – and take decisive action.

That's why we follow that exercise with one where we look at an organisation's current activities – to consider each activity in turn in terms of its social impact, and its contribution or otherwise to the financial health of the organisation.  The idea here is that you should start by looking at what you're already doing – and seeing if you can improve that – rather than start with a search for the killer idea.  

Only then do we consider new ideas – with a quick assessment of each based on how risky/difficult they appear to be. In broad terms we assume that a new service, sold to a new customer group, carries more risk than sticking to your knitting and serving the people you know.  That doesn't mean that you don't develop new ideas – but you should go into any new enterprise ventures with a clear sense of the risk involved.  Once you've done this work, you may well come up with two or three ideas which feel more do-able – and they may be the ones that you consider further – with a feasibility study, a plan or a bit of test-trading. 

I've enjoyed delivering the workshops over the last few months.  Like in the rest of my work I've tried to bring a sense of realism to the issue of sustainability.  If you're in a funding crisis, and you've never set up a social enterprise before, is now really the best time to do it?  You might feel like you have no choice – but if you are considering setting something up, at least go into it with your eyes wide open.  

I'm on a bit of a roll writing about social impact at the moment – here's a post I've written for the UnltdWorld blog as part of their Shout Out for Social Enterprise series – questioning whether a focus on certain business structures (four legged company limited by guarantee good, two legged private business bad) takes us away from what we should be concentrating on – does this business make a difference?  

It seems that not everyone shares our enthusiasm for social enterprise.  First there was NAVCA's boss twittering away about his doubts about the good ship #socent, and now Social Enterprise Magazine assistant editor Chrisanthi Giotis has told us about how she struggles to explain what she does to her friends.

I sympathise with Chrisanthi, as I find it tough to explain what I do half the time. I also share her enthusiasm for keeping it simple. However I'm not so sure about whether her decision to start talking social enterprise being about "really creative people who base all their business decisions on generosity, not greed" is really going to help that much.

It's a nice image, and one which her friends will probably quite like.  But is that really what it's all about?  I class myself as a social entrepreneur and if I were to write down what my values are, I'd probably include "be generous" amongst them.  That's why, for example, I freely share all my business planning resources.  But do I make such black and white decisions, where I choose generosity over greed?  

I'm sure Chrisanthi was partly writing on the UnLtdWorld blog to be provocative, but there's a broader point here about why many people either don't understand what social enterprise is all about, or are sceptical or even hostile towards it.  I think it's partly because we over-complicate it – and yes, I'm going to revert to type and blame bureaucrats and politicians for that.  In this country we've ended up being fixated on structures – so such and such an organisation is a social enterprise because they're constituted like this, whilst another isn't because they've got a different type of structure. 

Social enterprise, in my opinion, has been hijacked by people who want to find a cuddly middle ground between a sclerotic State and a rapacious private sector – both of which of course are caricatures as comical as the ever-generous social entrepreneur.  That's why I'm interested in social business – businesses that exist primarily to achieve social impact.  Some of them distribute profits, others don't. But they nail their colours to the social impact mast. When you keep it simple like that I think people can relate to it, and also challenge any business which they don't think is having the impact that they say it has.  But of course, that won't suit the UK social enterprise support industry.

A story to finish:  I heard today of an entrepreneur (I'll keep it vague to protect them) who has a great product which delivers tangible social benefits.  Primary customer is the public sector, but he wasn't getting anywhere with them.  He was advised to become a CIC.  He's now got more work than he can cope with, because his public sector buyers feel comfortable buying from a social enterprise.  What's changed?  Nothing much – other than the legal structure he works within.  I don't understand that – so I don't see why anyone else will either.