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While it does not dismiss the concept of social enterprises delivering NHS services, as Unison has, the Durham University study does agree that the policy carries 'major risks' in terms of sustainability and public accountability.

PCTs could, through contracts, insist on issues such as staff terms and conditions, user engagement and organisational ethos 'but there are fears that PCT actions will be dictated by costs', the report claims.

It says that co-ordinating care pathways and public health across a variety of providers will be challenging, and giving social enterprises preferential treatment could be in conflict with ensuring fair competition and EU rules on procurement.

The report also claims that existing social enterprises have so far experienced limited success with involving the public and local users, and more research is needed on the characteristics that define an NHS social enterprise to ensure public accountability.

The report added that the government also needed to resolve the issue of pensions - something it has committed to doing by the end of this year - to ensure that community interest companies, which are harder to be taken over by corporate companies if they are struggling, can offer NHS pensions.

The Social Enterprise Coalition has disputed the claim that current members have not involved the public. A spokeswoman said that their members used a range of systems to involve stakeholders and many had community representatives on all of their boards, and were involved in all decision-making processes.

She said that issues with EU policies could be complied with if definitions of 'value for money' also included social benefits.

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