By Phil ScullionFollow @PhilScullion
The Department of Health (DoH) needs to reassess its approach to social enterprises if it is to get value for money the National Audit Office (NAO) said today.
Social enterprises are businesses which reinvest their profits into the community or other social objectives rather than aiming to make money for shareholders.
They are set to receive an investment of £900 million in contracts from the DOH as part of the Right to Request Programme.
Amyas Morse, head of the National Audit Office (NAO), warned: "There are many risks to be managed if the department is to get value for money from the £900 million contracts awarded to social enterprises.
"The department needs to reassess its approach, when contracting with social enterprises, of not requiring efficiencies over and above what would have been achieved if the services had remained within the department."
The main aim of the DoH's programme is to enable staff to leave the NHS and set up health social enterprises. These independent bodies would be under contract to primary care trusts, and provide services which were previously dealt with in-house.
Siobhan Clarke, managing director of social enterprise Your Healthcare, said: "Being a social enterprise gives us the freedom to act according to local need without needing to jump through bureaucratic hoops."
A DoH spokesperson said that the NAO had "failed to understand" the point of the Right to Request initiative.
The spokesperson continued: "The Right to Request has delivered clear benefits to the NHS and patients. It is led by users of the service - local people and staff - who are all best placed to deliver responsive services for their communities.
"The department remains committed to freeing up NHS staff to take control of the services they provide to deliver the best care for their patients. We want to see even more of the frontline staff who know their patients best given the power and freedom to shape services around them through our Right to Provide scheme, the first such scheme to be launched in the public sector."
Another NAO criticism is that the Right to Request programme does not have measurable objectives, which means there is less chance benefits will be delivered.
However the DoH objects to that, saying Right to Request was never a standalone programme and instead forms part of the wider Transforming Community Services, which does have clear objectives.
Peter Holbrook, chief executive of the Social Enterprise Coalition (SEC), said: "Research to assess value for money would have been much better carried out at a later date with a larger sample size."
"It is naïve to suggest that social enterprises might not deliver value for money – they're businesses and their survival depends on it," he added.
Currently only 20 social enterprises are in operation, with most having been launched as recently as April 2011.
The potential to assess their performance so far is somewhat limited, the NAO said.