1. Social enterprise learning from other sectors Ceri Jones – Head of Policy and Research

2. Social Enterprise UK Established in 2002 as the national body for social enterprise Membership organisation: ~ 600 members reach to over 10,000 Bring together all the different forms of social enterprise under one umbrella Main purposes: Supporting the social enterprise thrive Developing the evidence base for social enterprise Influencing the national policy and political agendas Showcase the benefits of social enterprise

3. What is Social Enterprise? Social enterprises are businesses driven by a social purpose. They: Have a social mission core to their purpose (set out in their governing documents) Generate the majority of their income through trade (revenues mainly from goods and services provided, not grants or donations) Reinvest the majority of their profits (towards the social mission) Are autonomous and independent organisations They take a range of different legal and governance structures. Examples of successful social enterprises: The Big Issue: A magazine supporting homeless people generate their own income Sandwell Community Caring Trust: a social enterprise delivering adult social care Divine Chocolate – a chocolate company partly owned by the Ghanaian farmers that reinvests it profits.

4. Forms of Social Enterprise Employee owned models Companies where employees own a significant or controlling stake in the business. Direct or indirect shareholding Co-operatives Businesses that are fully or majority owned by their members – who may be employees, consumers, others in the community or a mix of these. Democratic structures Charitable social enterprises Social enterprises with charitable status. Often group structures with a charity and trading arms taking a range of legal forms. ‘Profits are gifted back to the charity’ Other social enterprise models Businesses with clear social /environmental purposes, accountable structures and with restrictions on the use of profits and often sale of assets. These may be CICs, CLGs or CLS or group structures. “Culture trumps structure” SOCIAL ENTERPRISE – Businesses trading for social purposes Mutuals - A business owned by its members

5. Social Enterprise in the UK - Setting the scene 62,000 social enterprises in the UK (5% of all businesses) Contributing £24 billion to the UK economy and employing over 800,000 people. They operate in a diverse range of sectors from health and social care, to renewable energy, transport, retail and housing. 25% Improving a particular community 24% Creating employment opportunities 23% supporting vulnerable people 22% Improving health and well-being 19% Promoting education and literacy Examples: Shoreditch development trust: An organisation working to address the causes of disadvantage in the most deprived areas of Shoreditch Healthy living centre, conference centre, restaurants, workspace. Stride: a social enterprise providing work placements and accredited training opportunities to long term unemployed, vulnerable and disadvantaged individuals. Hair dressers, construction, MOTs etc Hillholt Wood – Hill Holt Wood An environmental social enterprise - Woodland management to achieve employment, education and training goals. Hill Holt Wood is a centre for learning for a diverse range of learners of all ages and abilities.

6. In the UK...

7. State of Social Enterprise 2011 Social enterprises are working to address the root cause of deprivation 39% are located in the (20%) most deprived communities and a third of all start ups in these areas. Compared to 13% of SMEs Bottom up – not top down. 74% actively involve beneficiaries/customers in their decisions – rising to 9 out of 10 in most deprived areas. Social Enterprises are dynamic 58% grew last year compared to 31% for SMEs. 57% predict growth for next year compared to 41% of SMEs. 55% launched a new product of service last year compared to 46% of SMEs. 14% are start ups compared to 4% SMEs

8. Routes to social enterprise Entrepreneur led Public sector spin-out Charitable/community organisation becomes enterprising Private sector company conversion or acquisition Co-operative – group come together to address a problem.

9. Some BIG commitments from the government... Part of the Big Society Vision Localism Bill – Right to Challenge Community owned shops/post offices/pubs Big Society Capital Public Service Reform Social Investment Tax Relief Public Services (social value bill) Social Impact Bonds, Social Stock Exchange Cross-Party Political Support

10. Where can social enterprises deliver efficiency and value for money? Improving public services Contributing to economic development Supporting community development and cohesion Addressing social exclusion

11. Public services. Involve staff in governance Invest in development and rewards for staff Streamline and devolve decision making – removing administrative burdens Involve in customers in governance and/or Co-design and delivery to develop better tailored service Build Trust and support with vulnerable people Freedom to be more flexible Invest in technology Combine best of business with social motivations Partnerships Access new markets Join up public sector services Attract alternative investment Optimise the use of assets Reinvestment of profits multiplier effects

12. Economic Development Social Enterprises Economic Well- being Social capital Multiplier effects Economic Growth

13. Community Development St Peter’s Partnerships and Safeguard it Mission – Set up by local residents to tackle underlying and longterm difficulties in regenerating the area. Business Model – A number of trading arms – Safeguard it, Greenscape Landscaping and charitable donations. Legal form: St Peter’s Partnerships is a registered charity with a number of trading arms but all profits are either reinvested in the business or donated to the charity to support further community-based activities. Safeguard it - partnership between Manchester FRS and local SE – St Peter’s Partnership Innovative model to deliver fire safety checks in vulnerable homes and to small businesses Fire service not good at reaching marginalised homes Not possible for the FRS to generate income from small firms Cost effective model, builds community cohesion, create employment opportunities Reduction in accidental fires of 41% year on year. High satisfaction rates

14. Community Development Organisation - Trefeglwys Village Shop Mission – To provide essential services and build a thriving community in response to closure of shop and post office petrol station. Business model – Sales, events space and some grant funding 60/40. Legal Structure – Industrial and provident society – community members Process – 2008 – shop, post office and petrol station closed or at risk. Community council appointed steering group to look into community takeover. Strong community support Planning permission to modify the local garage May 2009 – raised grant funding to buy the building Open 2010 sell locally produced produce aiming to contribute to the local economy.

15. Addressing social exclusion/public services Open Door Mission – To provide health care to people unable or unwilling to access mainstream services Business model – contracted by the local authority and PCT to deliver services Legal Structure – CLG – part of the Big Life Group Process – 1000 people outside the health system. Research showed they didn’t value their health Co-designed and co-delivered - Multi purpose care centre 2 contracts with the Care Trust Housing support, citizens advice, self esteem, anger management, alternative therapies and primary care services, psychiatric care simple things like showers and a place to be.

16. Actions to take In general... Indentify existing enterprises Appoint social enterprise ambassadors Ensure a senior figure is a social enterprise champion Clear policies on business rate relief When commissioning and procuring social enterprises... Build a SE supply-base – provide training, arrange meet the buyer days, communicate to SEs Have clear and transparent processes Select priority areas to focus on

17. Actions to take When adapting the commissioning and procurement process Needs assessment stage - Invite contributions to demonstrate need. Designing services - Invite suppliers to contribute to defining specifications before launching the procurement User involvement - Involve service users in designing, assessing, awarding points for service user engagement. Risk Management - Be creative about how you manage risk. Financial pressures and objectives – Look at financial stipulations, balance between risk and reward, incentivise outcomes, cash-flow issues, payment scheduling, transaction costs Contracting and procurement – think carefully about contract size and length, standardise processes, making PQQ requirements reasonable and proportionate to the contract. Market stimulation – signal intentions early to allow the market to respond, new entrants to emerge, consortia and partnerships to develop Recognise social, economic and environmental value!

18. Any Questions? ceri.jones@socialenterprise.org.uk Social Enterprise UK www.socialenterprise.org.uk