NELEP – Social Enterprise Some issue definition 14 January 2013

The brief 1.How can voluntary sector and social enterprise organisations grow and diversify their activity in the North East? 2.What opportunities exist for third sector organisations over the next ten years, and what can be learnt from elsewhere? 3.Which parts of the NE are most conducive to social enterprise? Which parts of the NE most need the alternative of social enterprise because they are marginal to the mainstream? 4.What forms of policy support should be put in place to stimulate SE growth in those places?

This presentation 1.Initial reading and conversations 2.This presentation and discussion: identification of issues 3.Research based on interviews with key individuals 4.Think piece

The voluntary sector and social enterprise is not really a sector ‘Voluntary sector and social enterprise’ covers a wide range of entities:- -Major housing associations and sole traders -Businesses providing public service, and serving other markets -Charities, ventures financed by social investment and ventures financed by commercial investment -Ventures designed to meet unmet needs and ventures designed to create employment -Businesses in transport and businesses in health care Some problem definition needed if we are to produce a meaningful answer to the questions The West of England LEP set up a social enterprise sector group – but now not sure this makes sense; social enterprises are parts of different sectors

This means there are a number of distinct questions I assume the objective is to create or protect good jobs. So we may be interested in the following (distinct) questions…

This means there are a number of distinct questions I assume the objective is to create or protect good jobs. So we may be interested in the following (distinct) questions -What will encourage national or international charities to set up head office or back offices here?

This means there are a number of distinct questions I assume the objective is to create or protect good jobs. So we may be interested in the following (distinct) questions -What will encourage national or international charities to set up head office or back offices here? -How can we ensure that North East social enterprises maximise their market share of public service sub-contracting?

This means there are a number of distinct questions I assume the objective is to create or protect good jobs. So we may be interested in the following (distinct) questions -What will encourage national or international charities to set up head office or back offices here? -How can we ensure that North East social enterprises maximise their market share of public service sub-contracting? -What support can business and local government and others give to create businesses/employment that would not be viable without the social motive (of social entrepreneurs and volunteers)?

This means there are a number of distinct questions I assume the objective is to create or protect good jobs. So we may be interested in the following (distinct) questions -What will encourage national or international charities to set up head office or back offices here? -How can we ensure that North East social enterprises maximise their market share of public service sub-contracting? -What support can business and local government and others give to create businesses/employment that would not be viable without the social motive (of social entrepreneurs and volunteers)? -How can we maximise the potential of social enterprise to create viable pathways to employment for the long term unemployed?

This means there are a number of distinct questions I assume the objective is to create or protect good jobs. So we may be interested in the following (distinct) questions -What will encourage national or international charities to set up head office or back offices here? -How can we ensure that North East social enterprises maximise their market share of public service sub-contracting? -What support can business and local government and others give to create businesses/employment that would not be viable without the social motive (of social entrepreneurs and volunteers)? -How can we maximise the potential of social enterprise to create viable pathways to employment for the long term unemployed? -How can we maximise the potential of social enterprise to make places – and therefore improve quality of life and indirectly the economy?

This means there are a number of distinct questions I assume the objective is to create or protect good jobs. So we may be interested in the following (distinct) questions -What will encourage national or international charities to set up head office or back offices here? -How can we ensure that North East social enterprises maximise their market share of public service sub-contracting? -What support can business and local government and others give to create businesses/employment that would not be viable without the social motive (of social entrepreneurs and volunteers)? -How can we maximise the potential of social enterprise to create viable pathways to employment for the long term unemployed? -How can we maximise the potential of social enterprise to make places – and therefore improve quality of life and indirectly the economy? -Can we join up public/private funding streams for multiple benefits?

An example A community centre in Coundon, Co Durham, with staff from former LA – range of services inc Post Office potentially making use of community good will, strengthening community and place Identifies need for catering course for locals - bus to local FE college is £5 a day – value of local knowledge, creating pathway to employment, question about social role of transport - and raises small public grant – dependence on public sector Cash flow crisis – grant paid in arrears – procurement and finance problems – and almost abandons project – staff not nec entrepreneurial, no financing network … but finds local councillor who uses her budget to provide bridging finance – creative use of funding stream Post office service loses money – has not addressed with PO; may not be sustainable – some support on business planning needed?

About each of these we can initiate a discussion today -What will encourage national or international charities to set up head office or back offices here? -There has been growth in the past; higher than national average of labour force -? Selling points: public sector back office/call centre skills, place, transport

About each of these we can initiate a discussion today -What will encourage national or international charities to set up head office or back offices here? -There has been growth in the past; higher than national average of labour force -? Selling points: public sector back office/call centre skills, place, transport -How can we ensure that North East social enterprises maximise their market share of public service sub-contracting? -BCG predict Social Enterprises can increase market share from 22% to 32% in 26 public service sub-sectors over next few years (social value obligation) -But smaller social enterprises struggle with procurement processes and sub- contracting can mean value leaves the region -How can local authorities manage procurement and capability building to maximise local value share for central and local govt contracts? -Does this involve building consortia and helping scale – 90% of those advising sector believe most social enterprises are too small; shortage of investable propositions; half of £1m+ SES founded before 1990; median t/o £240,000 -Use of central funds – eg Investment and Contract Readiness Fund

About each of these we can initiate a discussion today -What support can business and local government and others give to create businesses/employment that would not be viable without the social motive (of social entrepreneurs and volunteers)? -60% of social enterprises are profitable and 16% breakeven. These are viable businesses. But there is a shortage of investable propositions. The question is how to scale and maximise potential -An increasing proportion of turnover is from general public or private sector. Is there leverage in scale and branding? -Anecdotal evidence of strong youth interest in social entrepreneurship -Businesses have provided support and formed joint ventures with social enterprises (eg McKinsey, Danone). What support can local business and major 3 rd sector (eg housing associations) provide? Purchasing? Advice? Training? -How should the LEP best work with and encourage established support organisations and ensure maximum coverage? Young Foundation identified 100+ such organisations including many national, 75% reported as good or excellent -We were told NE coverage not as good as some other areas and that good support at start up stage may not be sustained during growth stage -How should the job creation potential be evaluated? How much is this worth?

About each of these we can initiate a discussion today -How can we maximise the potential of social enterprise to create viable pathways to employment for the long term unemployed? -For 24% of social enterprises (30% of those in most deprived areas) creating employment is the primary objective -What are these pathways – that is what will the opportunities be outside social enterprise? -How much is going on now and how much more could be ‘bought’? -What would the impact of a labour force plan be? -What is best practice and how can it be spread?

About each of these we can initiate a discussion today -How can we maximise the potential of social enterprise to create viable pathways to employment for the long term unemployed? -For 24% of social enterprises (30% of those in most deprived areas) creating employment is the primary objective -What are these pathways – that is what will the opportunities be outside social enterprise? -How much is going on now and how much more could be ‘bought’? -What would the impact of a labour force plan be? -What is best practice and how can it be spread? -How can we maximise the potential of social enterprise to make places – and therefore quality of life and indirectly the economy? -For 25% of social enterprises improving the community is the primary objective,. For 16% protecting the environment is the primary objective. -Right to Bid programme (village shops, post offices, pubs etc) and Social Value obligation could create opportunities -What is the existing and potential for key sectors (Culture, community, transport, local environment)? Cf transport commissioning in Norfolk/Suffolk, Bristol