John Maddocks presentation - LGiU general power of competence seminar
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  • ‘ General charities’ is an NCVO definition which excludes: 1. inactive or duplicates of other organisations 2. faith groups, trade associations, mutuals, housing associations and independent schools. 3. charities that are owned by the government or the NHS.
  • Table indicates differences as well as grey areas.

John Maddocks presentation - LGiU general power of competence seminar Presentation Transcript

  • 1. Social enterprise and public service delivery John Maddocks
  • 2. Changing service delivery landscape
    • Health
    • Localism
    • Personalisation of social care
    • Big Society
    • Public Service Reform
    • “… support the creation and expansion of mutuals, co-operatives, charities and social enterprises, and enable these groups to have much greater involvement in the running of public services”
    • (The Coalition: Our Programme for Government)
  • 3. Social enterprise - definitions
    • ‘ … a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community ...’
    • DTI 2002
    • ‘… social enterprise if:
    • the person or body is carrying on a business ;
    • the business’s activities are being carried on primarily for a purpose that promotes or improves the social or environmental well-being …;
    • the greater part of any profits for distribution is applied for such a purpose .’
    • Public Services (Social Enterprise and Social Value) Bill
  • 4. A social enterprise …
    • Undertakes trading activities (50% > of income)
    • Has a social purpose
    • Profits are reinvested (50% > reinvested)
    • = social enterprise
    • Independent
    • Asset lock
    • Accountable for social goals
    • = social enterprise mark
    • Participatory structure?
    • = participatory social enterprise
  • 5. Main types of ‘social enterprise’
    • Charities that trade
      • Annual earned income approx £17.5bn
      • Shift from grants to contracts
    • Community interest companies
      • Over 4,600 community interest companies
      • Number is growing rapidly
    • Mutuals
      • Turnover approx £100bn
      • 1million employees
    • Co-operatives (part of mutuals)
      • Turnover approx £33bn
      • Over 4,900 co-ops in UK
  • 6. Variety of legal structures
    • Including:
    • Company limited by guarantee
    • Company limited by shares
    • Company limited by guarantee & registered charity
    • Company limited by guarantee & registered CIC
    • Company limited by shares & registered CIC
    • Industrial & Provident Society- for benefit of community
    • Industrial & Provident Society- bona fide co-op
    • Limited liability partnership
    • Charitable incorporated organisation
    • Charitable Trust
  • 7. Different structures different characteristics
    • The results of choices made over legal structure and rules will be seen longer term. It impacts on:
      • Regulation
      • Governance
      • Property rights
      • Financing
      • Trading
      • Tax
      • Accounting
      • Participation
      • Long term purpose
  • 8. Types of governance
    • Self selecting - Just the governing body and no wider membership
    • Democratic – Open membership (involving one or more stakeholder groups) elect governing body
    • Hybrid – governing body appointed by another body and/or % of places allocated to particular stakeholders, or some other mix of selection and appointment
  • 9. Differing characteristics - examples Footnotes: 1. Co-ops and companies able to revise asset lock terms in their governing documents 2. Can issue member shares if not a company limited by guarantee Characteristic Charity Co-op CIC Open membership Optional Yes Optional All surpluses retained Yes Optional Optional Asset lock Yes Yes, but 1 Yes Charitable status Yes No No Issue member shares No Yes, if 2 Yes, if 2 Tax advantages Yes Limited No
  • 10. Sandwell Community Caring Trust
    • Charity - company limited by guarantee
    • Initial funding £1.2m (previous year £1.6m)
    • Initial 5 year contract
    • Reduced number of managers
    • Reduced spending on admin
    • Increased spending on service delivery
    • Culture of valuing staff
    • Low absenteeism
    • Low staff turnover
  • 11. Sunderland Home Care Associates
    • Initially CLG – 20 members £1 share each
    • Changed to CLS to allow for share allocations
    • Shares distributed to employees in two ways:
    • Annual free allocation linked to salary
    • Annual sale
    • Board includes 5 employees (3 year term) and tax/legal expert
    • 360 employees
    • £3.5m turnover
    • £168,000 pre tax profit (2009)
  • 12. North West Housing Services
    • Industrial & Provident Society bona fide co-operative
    • Formed by a consortium of 38 independent organisations
    • Now has 46 member organisations
    • Provides professional services to housing co-operatives, small housing associations, leaseholders and social enterprises
  • 13. Greenwich Leisure Limited (GLL)
    • Industrial & Provident Society for the benefit of the community
    • Oversees the management of over 100 public leisure centres, including swimming pools and gyms within London and South East England
    • The board has representation from a number of stakeholders including:
      • customers
      • council
      • staff
  • 14. Carn Brea Leisure Centre Trust
    • Initially LA run
    • Transfer to an external contractor
    • Closed
    • Reopened as charity – company limited by guarantee
    • Income £1.3m (2010)
    • 90+ employees
    • Trustees elected by membership
  • 15. Central Surrey Health
    • Social enterprise formed in 2006
    • Company limited by shares
    • Co-owned by 700+ employees
    • Delivering community nursing and therapy services
    • Previously within PCT
    • In NHS pension scheme
  • 16. Bromley Healthcare
    • Company limited by shares & CIC
    • 800+ delivering community health services
    • Staff and local GPs all have shares
    • Cannot trade shares
    • Cannot own more than one share each
    • Board of directors
    • Council of governors
    • Community Forum
  • 17. Bucks Urgent Care
    • Limited Liability Partnership
    • Consortium of two GP provider companies and a national provider of out-of-hours medical services
    • Won contract in 2009 to provide specified health services for the population of Buckinghamshire including:
      • an out-of-hours service  
      • a GP-led Health Centre
      • a dedicated Admissions Avoidance Team to respond to requests from care homes for urgent medical advice
  • 18. Iceni Partnership
    • Charity - company limited by guarantee
    • Received £3.85 million EU funding to develop two community asset buildings, redesign the town centre and to provide community cohesion projects and events
    • Manages:
      • community centre
      • assembly rooms
      • business units
    • Strong volunteer involvement
    • Small paid staff team
  • 19. Eaga: from social enterprise … to Plc … to …. Carillion
    • Started by 5 staff to address fuel poverty
    • Initially a CLG, then CLS then Plc
    • Established employee benefit trust (EBT) and transferred share ownership
    • Established charitable trust to fund research into fuel poverty and wider energy issues
    • Floated 49% of business on Stock Exchange
    • 4,000 partners (2007)
    • Partners council
    • Revenue £762m, 51m pre tax profit (2010)
    • Now Carillion Energy Services
  • 20. Lessons?
    • The choice of legal structure matters
    • Understand the ‘differences’
    • It takes time to develop services, governance, management, participation and the ‘culture’ of organisation
    • Service transfers can lead to different ways of ‘thinking’ about service delivery
    • Choose structure for right reasons
  • 21. New opportunities
    • Changing relationships
    • New service delivery models
    • New financing and funding models
    • New training and support services
    • Organisational difference and what it offers to users and providers
  • 22. New publication
    • What is a social enterprise?
    • Types of social enterprise
    • Legal structures part 1
    • Legal structures part 2
    • Financing
    • Charity trading
    • Tax and social enterprise
    • Governance
    • Tupe
    • Considering options
  • 23. Questions - discussion
    • [email_address]
    • http://www.cipfa.org.uk/bigsociety
    • http://www.cipfa.org.uk/panels/charity