After Carillion: Duncan Thorp on how social enterprises can provide the alternative to corporate greed

The collapse of infrastructure giant Carillion has again exposed fundamental flaws in the way governments deliver public services.

It raises big questions about politics, the rigged economy and the old way of doing business.

In the aftermath of cases like this the immediate priority should always be maintaining public services and protecting the jobs of workers and the many small businesses in the company supply chain.

Carillion is of course not the first corporate casualty of the toxic PFI/PPP culture that’s been encouraged and promoted in Scotland and the UK. Governments of all kinds, lobbied relentlessly, have embraced this quite bizarre model of service delivery.

This is the strange notion that public services should not actually be owned by the community or run for public benefit but should primarily exist to produce profits for shareholders and directors.

Public services run by big corporations is a failed experiment - It increasingly ends up as corporate welfare, a socialism for the rich

Duncan Thorp

Locally owned social enterprises and co-operatives are the only real alternative to deliver our public services. The public sector on its own doesn’t have the knowledge, skills, flexibility and innovation that exist in many social enterprises.

We can drive forward a diverse mix of business models that put people and planet first. Atlantis Leisure, The Wise Group in employability and justice, HCT Group delivering bus services, the Low Moss Prison Support Pathway and the NHS Lothian and third sector health partnership - it already happens and it works.

This isn’t about demonising the private sector, shareholders or company directors. The private sector is not one single thing, it’s a spectrum of types and sizes, exactly the same as the so-called third sector. There’s so much overlap that these sectors are ultimately fiction.

There are many business people who behave ethically, provide value to society and are driving positive change. Unfortunately their efforts are drowned out by the likes of Carillion, G4S, Atos, Capita, Serco and other wealth extractors. But we need far more than corporate social responsibility. Giving something back is recognition that you’re taking something that isn’t yours.

Public services run by big corporations is a failed experiment. It increasingly ends up as corporate welfare, a kind of socialism for the rich.

Even when they’re not being propped up with taxpayers’ money it is anti-social enterprise, existing only to benefit the corporation and in turn increase wealth inequality.

Corporate failures are a symptom of something more fundamental. It’s the same issue whether we’re talking about public service profiteers, banks, permanent subsidies for train companies or government aid for weapons makers - the business model is broken.

Corporate law reform sounds boring but it underpins our entire society. Every campaign, every charity, every cause you hold close to your heart, is negatively affected by corporate law. Under the law a corporation is classed as a person and is required to maximise profits. It has no choice.

Third sector people should be asking why we’re in a state of constant crisis management, too often ignoring the root causes of social problems. All issues are caused by a broken economic and business model and the politics that props it up.

When I read about the latest corporate drama it always calms me to think about a particular episode of Star Trek: Voyager. One of the characters shares his thoughts about a race of cybernetic beings that are driven to assimilate everything in their path: “The Borg Collective is like a force of nature. You don't feel anger toward a storm on the horizon.”

It’s easy to get angry at corporate abuse but our response should be practical and constructive. We must lobby hard for legal reform of corporations and mandate strong business ethics.

Equally we must build the local, positive alternative of social enterprise in every community.

Duncan Thorp is policy and communications manager at Social Enterprise Scotland.