Overview of the sector
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An Overview of the Social Enterprise Sector - prepared by Social Firms UK for Henley Business School, University of Reading

An Overview of the Social Enterprise Sector - prepared by Social Firms UK for Henley Business School, University of Reading

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  • Introduce myself and Social Firms UK
  • After weeks of doing this course you have a definition, the widely accepted but still contested definition is this,
  • Not about what they do, what their values are
  • International Year of Cooperatives is intended to raise public awareness of the invaluable contributions of cooperative enterprises to poverty reduction, employment generation and social integration. The Year will also highlight the strengths of the cooperative business model as an alternative means of doing business and furthering socioeconomic development.541 worker co-operatives with £156 million turnoverMutuals are attractive from a government perspective – indicates the direction of travel of government policyCo-operatives are businesses owned and run by their members. Whether the members are customers, employees or residents they have an equal say in what the business does and a share in the profits.As well as benefiting their members, co-operatives share internationally agreed principles and act together to build a better world through co-operation.Mutuals are organisations that are owned by, and run for the benefit of their members on a fair and equitable basis. Mutuals take many forms including: buildingsocieties, co-operatives, financial mutuals, employee owned businesses and smaller community owned shops.
  • sample of 8,640 small and medium enterprises (SMEs). (For the purposes of this report, an SME is any business with zero to 250 employees)Verbalise difficulties in quantifying – challenges it presents in adequately promoting and representing the sector
  • We get a lot of calls on advice for legal structure but it depends on the nature of your business, what assetts you have, how much rick willing to take Community interest company (CIC)A CIC is a legal form created specifically for social enterprises. It has a social objective that is "regulated", ensuring that the organisation cannot deviate from its social mission and that its assets are protected from being sold privately. For more information on CICs, contact the CIC regulator - www.cicregulator.gov.ukIndustrial and provident society (IPS)This is the usual form for co-operatives and community benefit societies, and is democratically controlled by its members in order to ensure their involvement in the decisions of the business.Companies limited by guarantee or sharesThe most common legal structure for standard businesses.  Many social enterprises also choose these legal forms because they are very flexible when it comes to governance, and when it comes to getting investment.  To ensure a standard company is a true social enterprise it will need to ensure it has a social mission written into its Memorandum and Articles of Association and is clear about reinvesting its profits.Group structures with charitable statusThis is a very common legal form for social enterprises.  In part it is common as increasing numbers of charities are moving away from traditional models of fundraising and becoming more businesslike in order to ensure their sustainability.  Partly it is a result of the fact that tax is an important consideration for some organisations where the retention of surpluses is essential.  In these cases the tax breaks associated with charitable status can be an important factor and mean that having a charitable structure as part of the group is worthwhile. 
  • Public services – doing stuff on the cheap should be about value
  • Mismatch of government lexicon #socent “doing stuff on the cheap”; mobilising volunteers; Social Firms: importance of value; champion market led wages – contrast job seekers allowance scandal and the devaluation of the workforce.
  • Growth markets – still at war! Acquired disability; rise in homelessness; ex-offenders – riots, on top of this disadvantaged people get pushed further away from the labour market.Sector traits- many start ups, can’t access contracts and government mismatch
  • commitment to ‘localism’ - decision making powers shifted to local authoritiesPayment by Results – policy mismatch here – cash flow issues! What other sector would anyone be reasonably expected to deliver a programme and not get paid till the end? Siloes – not enabling their own policy.Fiscal not societal, tickbox exercise, house of cardsSocial Impact Bonds - Social Impact Bonds are a form of outcomes-based contract in which public sector commissioners commit to pay for significant improvement in social outcomes (such as a reduction in offending rates)Social Impact Bonds are a form of outcomes-based contract in which public sector commissioners commit to pay for significant improvement in social outcomes (such as a reduction in offending rates, . Financial returns to investors are made by the public sector on the basis of improved social outcomes. If outcomes do not improve, then investors do not recover their investment.
  • Lecture in itself but important to mention growing pressure/expectation to measure social impact
  • Big Four – not philanthropic – real opportunity for business in the sector – fast growing (refer to statistics) political movement backlash against traditional businessConstruction companies – Section 106 - provision of support to unemployed residents of Southwark to access construction employment skills, learning and brokerage services. Lasting local legacy - “I've learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.”Leaders family owned / housing associations – visible locallyGuinness and Ben & Jerry's - updating their social credentials
  • Different, leaders – ground up – social enterprise champion in every business unit and every region, monthly reporting, Ahead of the game, got a lot of flack Strategies align to business – look at any responsible reporting; CSR – often what they do badly!Increase in the future Legal and General – align to their business
  • Healthcare fastest growing sector for social enterpriseAnnounced yesterday:1,519 convicted London riots, 60% immediately jailed, Community ownership – loss of community engagement – community right to buy – safeguard future, libraries, pubs, social clubs, post offices, especially in rural areas; effect of the recession on the high streetsWhere do you think it will go? How can SE responsibly respond to the challenges
  • Direct cost savingsMassive hurdles – TUPE of staff- massive liability - bad starting point Cultural – 9-5, suspicion- public sector and unionsTop down not bottom up process- driven fiscally – not empowering3 yrs profitability – pensions, presssure

Overview of the sector Overview of the sector Presentation Transcript

  • An Overview of theSocial Enterprise Sector Temi Odesanya Marketing Officer
  • What is Social Enterprise?‘a social enterprise is a business with primarilysocial objectives whose surpluses are principallyreinvested for that purpose in the business or inthe community, rather than being driven by theneed to maximise profitfor shareholders andowners Government definition Social Enterprise Mark website
  • What is Social Enterprise?• Social enterprises (SEs) = profit reinvesting businesses that trade for social/environmental aim• Main objectives - to create jobs, support vulnerable people, improve health & well-being, promote education & literacy and protect the environment Findings from ‘Fightback Britain: State of Social Enterprise Survey 2011’
  • Different types of social enterprise Development trusts Credit unions Housing Associations Social Firms Mutuals Work Integration Social Enterprises Worker co-operatives
  • Social Enterprise in the UK• 62,000 social enterprises in the UK – Estimated to 250,000 – Data from the Annual Survey of Small Business 2005-2007 – Social Enterprise UK
  • Legal structures Findings from ‘Fightback Britain: State of Social Enterprise Survey 2011’
  • Sector traits• 1 in 7 of all UK SEs is start-up - more than 3x proportion in mainstream small businesses• 58% of SEs grew last year - compared to 28% of SMEs• Some of the biggest UK SEs started in the recession of the ‘80s• Trade is most common source of income, rather than public services Findings from ‘Fightback Britain: State of Social Enterprise Survey 2011’
  • Sector traits• Leadership team – 86% women; 27% BAME• 74% actively involve beneficiaries in decision making (9 out of 10 in most deprived communities)• Employ more people relative to turnover than mainstream SMEs• Operate: 20% local, 19% national, 16% a region Findings from ‘Fightback Britain: State of Social Enterprise Survey 2011’
  • Social enterprises, WISEs & Social Firms Third Sector aka Civil Society Social Enterprise WISEs Social Firms Creation of quality, paid, sustainable employment for individuals furthest away from the labour market
  • Social Firms are Values LedEnterprise: “business that support” rather than “project that trades”Employment: social & economic integration through employment and market wagesEmpowerment: supportive environment, real opportunities and meaningful work
  • The value of Social Firmstackle stigmacreate jobssocial valuecost benefits to societyemployment and health alignedsocial & economic mission integrityvolunteering, training and paid opportunitiescomplement other employment models
  • Royal British Legion Industries• 1919 - treatment, training & support after WW1• Manufacturing division = social enterprise• Pallet & signs manufacture, mailing, print, distribution, fulfilment services• Preferred supplier to Network Rail• Needs diversification of product range & growth
  • Argonaut Community Enterprises• 2010 (CLG) - mission - work opps for deaf or disabled, commercially viable services in visible roles• Argonaut Cleaning Solutions, Argonaut Facilities (demand), Argonaut Security – ex-military• Argonaut Distribution – mail, print, fulfilment• London, Birmingham, Hampshire, Liverpool• Ambitious, entrepreneurial – hampered as under 3 years trading history
  • Policy developments• Big Society (Localism Act 2011)• Govt target –#SMEs supplying public sector 5% 25%• Main government focus on public service delivery - Mutuals• Mostly NHS ‘spin outs’ but no contract guarantees (CS Health)• Payment by Results / Social Impact Bonds• Open public services White Paper – “Public services, social enterprise & social value bill” – social value in procurement – need for any orgn bidding for public sector contracts to demonstrate
  • Social impact• Qualitative vs. quantitative• SROI – indicates the value of the social impact in financial terms• Social Accounts – explores the nature and extent of impact as experienced by various stakeholder groups
  • Corporate Engagement• PwC• Deloitte• Ernst & Young• KPMG• Guinness• Ben and Jerrys• O2• Lend Lease• Wates
  • Wates social enterprise strategyTo engage with Social Enterprises in the courseof normal business:• embedding them in the supply chain;• contracting for skills, goods or services on each project;• supporting community projects involving SEs - building work, business skills and funding;• working on joint client initiatives with SEs;• by pointing SEs towards other organisations who can support their growth & development; and• build a model of good practice for working with SEs to be shared, both within and beyond the construction sector.
  • Future• Green – global drive, local execution• Health & Social Care – fiscally driven• Community ownership – recreating communities as safeguarded areas• Criminal justice• Employment & jobs market – labour driven businesses• SE is fleet of foot
  • Contact: Temi Odesanya 01737 231 360 www.socialfirmsuk.co.uk info@socialfirmsuk.co.uk Facebook Twitter: @socialfirmsuk #socent LinkedIn Blog
  • July 12 – Conference, Uni of Leicester workandjobs.eventbrite.com
  • Mutuals• A public service mutual is an organisation which has left the public sector (also known as ‘spinning out’) but continues to deliver public services• “Government is committed to encouraging and supporting anyone who is seeking to follow their path.”• Challenges – TUPE – liabilities – Cultural – Suspicion – Top down – Pressure to deliver http://mutuals.cabinetoffice.gov.uk
  • Central Surrey Health• 2006• It was the first social enterprise to come out of the NHS• Lost their first competitive bid to Assure Medical• Expected to raise a £10m bond as surety• Wise Group in Scotland, Work Programme• LPT & Working Links