New social enterprises in the health sector will be offered uncontested contracts for up to three years.

Department of Health guidance published this week for staff wishing to use their right to request to set up a social enterprise, said that after three years the contracts would be tendered openly "in line with the growing contestability of community health services".

The department also set out the steps NHS staff would need to take to ensure their proposals were strategic and the organisations met governance and legal requirements.

It warned there were risks as well as benefits, including the possibility of failure and insolvency.

Although NHS staff transferring to a social enterprise will be able to take their NHS pension entitlements with them, they will not automatically be entitled to any subsequent improvements in NHS terms and conditions of employment.

To read the full guidance, go to www.socialenterprise.org.uk