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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.
  • 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