ACTIVITY PLAN:

SOCIAL ENTERPRISE IN BEDFORDSHIRE & LUTON

2006- 2010

Contents

Page

1. Introduction3

2. The scope of ‘social enterprise’

and its importance4

3. Social Enterprise

in Bedfordshire and Luton8

4. Priorities, policy links and outcomes15

5. Action Plans 22

6. Programme Management 27

Appendices

1: Defining Social enterprise28

2: Report on Consultative Conference,

The Rufus Centre, Flitwick, 9th May 2006 32

3: Policy Relationships40

4: Example Report derived from

asocial enterprise membership survey

(Development Trusts Association)52

1.Introduction

1. This Activity Plan has been drawn up as a result of discussions between the Bedfordshire and Luton‘Investing in Communities’ Board and the East of England Development Agency (EEDA). These discussions areleadingtowardsan agreed programme of action for the area under the Investing in Communities Programme which covers a number of different priorities. Social Enterprise is a priority where it has been agreed that further workis needed in order to set out a clearassessment of the current position in the area and to set a direction for future investment and action.

2. This Activity Plan is an initial attempt to achieve this by:

  • drawing upon already published research into socialenterprise in the area
  • involving important stakeholders in the development of a set of priority themes
  • setting out clear action plans which will guide the development of social enterprise locally and provide the foundations for further research, development and planning.

3. The Plan (which runs from October 2006 to March 2010) has been formulated under the guidance of the Bedfordshire and Luton Social Enterprise Steering Group (SESG) which is generally made up of representatives of the main organisations and agencies supporting local social enterprise development. This group is the successor body to that which oversaw the local European –funded ‘Equal’ Project which has played an important part in raising awareness of social enterprise, providing a range of training and practical help to organisations pursuing social enterprise and encouraging greater collaboration amongst the various support agencies. This project ended in March 2006 and is in the course ofbeing reviewed.

4. A ConsultativeConference was held in early May 2006 to involve support agencies and social enterprise organisations in discussion of the current positionlocally and development of ideas for actions under a number of priority themes. This was attended by approximately 40 people (the results of the group work discussions are set out in Appendix 2).

5. The Plan begins by defining ‘social enterprise’ and setting out why supporting social enterprise is important. This is followed by a summary analysis of the available evidence on the state of social enterprise in the Bedfordshire and Luton area, the types and levels of support available and the position with regard to involvement in public sector procurement of goods and services, principally drawing on previous research work, supplemented by a number of interviews and visits to ensure the information is broadly up to date.

6. This evidence is used to consider the major issues affecting the development of social enterprise locally, and go on to establish a set of four priorities for action which are linked to other major associated policies and plans at national, regional and local levels. A summary list of proposed activities over the next 3 1/2 years is shown for each priority.The expected outcomes of the overall activity plan are also described.

7. These four priority themesare then developed intoa set of action plans for specific initiatives in the coming 18 months, subject where appropriate, to resources being made available under the Investing in Communities programme or from other sources. An initial estimate of likely costs and other matters important for development and delivery is included.

8. Finally, the arrangements for managing this programme of action are set out, including responsibility for delivery, monitoring and evaluation and arrangements for ‘proofing’ activity to maximize the benefits to rural areas as well as urban and for other specific priority groups such as women and people from black and ethnic minorities.

2. The scope of ‘Social Enterprise’

and its importance

9. A part of the ‘Social Economy’ (or ‘Third Sector’), Social Enterprises are essentially bodies with social aims and objectives, are often ‘owned by’ as well as accountable to those running or benefiting from them and any profits or surpluses are usually re-invested in the pursuit of the organisation’s social aims. Social Enterprise cannot be defined by any particular legal form- Companies Limited by Guarantee, Co-operatives (both those set up by employees and those benefiting a wider community), Community Interest Companies, Charitable Trusts etc. could all be deemed to be social enterprises.

10. ‘Full Social Enterprises’ adopt business-like approaches and methods to their work and are enterprising in developing the means to fulfil their aims, including diversification of their sources of income, development of assets to provide security as well as service delivery opportunities and seeking new ways of generating income or in other ways pursuing their aims. This can often include combining different streams of activity to secure several community benefits e.g. recruiting long term unemployed people and training them to provide a waste recycling service under contracts with a local authority, JobCentre Plus and the Learning and Skills Council.

11. But the wider Voluntary and Community Sector is also involved in social enterprise activity. Any form of contract or agreement with a purchaser of services or goods which is specific in its expectations (of performance, quality, outputs etc.) means that that VCS organisation is trading (it is selling a specific service to a particular purchaser and in turn recruiting the staff and finding the materials it needs to do this). Appendix 1 sets out a more extensive definition of social enterprise.

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12. Government has stated its support for social enterprise development (it’s ‘Strategy for Success’ was published by the DTI in 2002- ref. 3) and there has been much published about its role in public sector procurement, including the publication of guides to procurement (both for social enterprises- ref. 4; and for public bodies- ref. 1).

13. Over recent years a number of initiatives have been taken to support the setting up and growth of social enterprises, including the Adventure Capital Fund, FutureBuilders and various other Community Development Finance Initiatives (CDFI’s). Some of these are explicitly addressing the building of capacity in the voluntary and community sector (VCS), to undertake greater levels of public service contracting.

14. The term social enterprise can be used both as a way of describing a particular organisation and as a type of activity undertaken by voluntary and community organisations who might not otherwise describe themselves as a social enterprise. Diagram 1 below shows how within the social economy there is a range of organisations from ‘full social enterprises’ (who operate largely as businesses) through to voluntary and community groups (who may have little if any income generated from trading activity). This diagram shows how these two ends of a spectrum have traditionally relied on different mixes of resources (represented by the different thicknessesof arrows). The traditional voluntary and community sector relies more on volunteering and philanthropy/ grants as major sources, whereas social enterprises tend to rely more on income from trading or through use of an asset (though the latter is still relatively underdeveloped).

15. This diagramcaptures, therefore, awide range of activity and organisational types, all of which might involve some level of ‘social enterprise’. Defining ‘social enterprise’ in this way encourages all organisations in the social economy to consider enterprise activities as a legitimate part of their income- generation and does not stigmatise those where this is a relatively small part of their total resources - as somehow being ‘inferior’ to those operating more as businesses. It also enables support for social enterprise to recognise that income from trading or assets is dynamic and may at a point in time be a growing or declining part of an organisation's total resource base. This means that support for social enterprise will need to be well matched to the circumstances, culture and style of a wide range of different organisations.

Diagram 1: Social Enterprise and resources in the Social Economy

16. This range of support can also be conceptualised in terms of the stages reached on different ‘journeys’of development by social economy organisations. It is probably true to say that most social economy organisations are seeking to do two things:

  • Maximizing the ‘community benefit’ of what they do
  • Achievingrelative‘self sufficiency’ in financial terms through a more diverse income base (so minimizing the risks associated with over- reliance on a limited set of income streams).

17. Some social economy organisations take amore passive approach to these questions and are perhaps content to under-achieve their full potential or perhaps continue to rely on a supply of grants and volunteering. This position may be entirely appropriate for some organisations, but for others their aspirations mean that they strive or seek help to achieve higher levels of community benefit and greater self sufficiency, usually through increasing their trading and asset –based income and reducing reliance on a more limited (and perhaps short term) set of grants or volunteer help.

18. Diagram 2 shows in simplified form how these social economy organisations can be located at different points in a matrix of ‘community benefit’ and ‘self sufficiency’ and how this affects the sorts of support and help they might require if that are to improve their performance on both.

Diagram 2: Mapping and supporting social economy organisations

19. Why is social enterprise important? To an extent the arguments often put forward reflect those to support social economy organisations more generally, but there are also some arguments which are based on the particular benefits of an ‘enterprising approach’:

  • Plugging gaps in services; responding to market/service failure; innovation to meet new needs
  • Generating income and assets to support social aims- supporting the long term viability of voluntary and community organizations and making other resources ‘go further’
  • Multi-faceted approach to social benefit- e.g. confidence, skills development and services
  • Local multipliers- generating wealth and keeping it local
  • Developing an enterprising attitude in organisations- greater readiness to innovate and take risks
  • Community based- responsive to local needs and priorities
  • Can be better value for money than services organised centrally or along traditional lines.

20. Social enterprise nationally and locally is already making a significant contribution to neighbourhood renewal and regeneration, including local economic development and they are increasingly playing a role in the delivery of public services, basedon best value principles and taking into account the full worth of what they contribute, beyond delivering a specific service. However, the recent research on procurement locally has shown that social enterprises experience barriers, both perceived and real, if they are searching for a greaterrole in the delivery of public service contracts.

3. Social Enterprise in Bedfordshire and Luton

21. As already noted in the introduction, this Activity Plan has been based mainly upon available research on social enterprise in Bedfordshire and Luton. A recent study by the author(‘Social Enterprise and Public Sector Procurement- Report for the Bedfordshire and Luton Voluntary & Community Sector Infrastructure Consortium’ - Community Renewal, December 2005)reviewed previous research and updated this through interviews with a mixture of support agencies and social enterprises.In addition a selection of interviews and visits to stakeholders, a consultative conference (see Appendix 2), as well as the findings from the OCSI and Roger Tym and Partners (‘Way Forward for IIC’- January 2006) have been reviewed and are broadly consistent with the findings reported below. .

Social Enterprise activity

22. Research by The Guild in 2001 found that compared to other parts of the East of England, there were a smaller number of social enterprises operating in Bedfordshire and Luton (around 106, representing 9.6% of the regional total(‘Mapping the Social Economy in the East of England’ -The Guild/EEDA, 2001).

23. Further research by The Guild in 2003/04 (‘Social Enterprise in Bedfordshire and Luton- A Report from the Guild’ -March 2004) involvedinterviewing 25 social enterprises and found that:

  • Most of the organisations interviewed were relatively small
  • Many had a community or voluntary background
  • There was lack of an evident commercial or entrepreneurial ethic in the sample, with many reliant on grant funding and focused on this as their main source of income
  • Less than half those interviewed were receiving any external business support, but where they were there was a strong relationship between the type of organisation and the usual sources of support; most voluntary and community groups obtained this from agencies in the Voluntary and Community Sector (VCS), whereas the more business orientated were more likely to be using business-based support organisations
  • There was little evidence from the sample of aspirations for growth
  • Many of the organisations struggled to identify with the term ‘social enterprise’ and were unclear about the role of the social enterprise sector.
  • A sub sample of organisations looking to grow felt that the existing support agencies were not relevant to their needs because of a focus on supporting new start ups
  • Further interviews with other organisations thought to have ‘growth potential’ failed to identify any strong potential

24. A survey of voluntary and community organisations undertaken by Bedfordshire Rural Communities Charity (as part of the ‘Voluntrade East’ project-‘Beyond grants-sustainability for the voluntary and community sector in the East of England -COVER, December 2003), sought to establish the extent to which VCS organisations were already involved in trading, their use of support services and future aspirations for trading activity. A postal questionnaire resulted in a response of 28 (4%). The research found that most of these respondents were already involved in trading activity of some kind, including:

  • Community Transport
  • Savings and Loans
  • Café/ catering
  • Recycling.
  • Retail
  • Health care support
  • Learning and training for disabled
  • Counselling Services
  • Training and development
  • Pre school education, nursery
  • Community Arts, crafts
  • Social Support
  • Accommodation, incl. Homeless

25. Around three quarters planned to increase their trading activity and about the same proportion mentioned finance and funding as a major obstacle to fulfilling their growth aspirations. The main conclusions from the research in respect of VCS organisations and trading were:

  1. ‘Trading is part of a wide range of income generating activity with much reliance placed on grants.
  2. Most respondents see sustainability as ‘more of the same’- i.e. trading as a supplement to other income from grants, donations etc. rather than as a potentially more important activity which can help to generate income to support social objectives.
  3. Most respondents generate trading income from their core activities.
  4. Once they have started trading, organisations continue with this.
  5. Most organisations have no plans to become totally self sufficient within the foreseeable future.
  6. One organisation wanted more information on setting up a social enterprise in relation to its core activity.
  7. The most important support for respondents was funding from local authorities and other sources. Other advice and support was obtained from a range of organisations within and beyond the County.
  8. Most respondents saw continuity of grant funding as the key factor affecting their ability to continue trading.
  9. Until recently there was no direct, business –based support for VCS organisations but Business Link have since set up a new advisor post- but there appears to be a lack of awareness of this among the respondents and whilst a small number of respondents are members of the Chamber of Commerce, in the majority of cases VCS organisations will not see Business Link or similar organisations as their ‘natural’ source’ of advice and support.’ (Beyond grants-sustainability for the voluntary and community sector in the East of England -COVER, December 2003)

26. The research carried out for the recent Procurement Study included interviews with a range of support bodies. The report found that it was not possible to conclude from these interviews that the amount of social enterprise in Bedfordshire and Luton today had grown significantly from the position two- three years ago. However, it did conclude that there appears to have been a period of further investment in support for social enterprise development from a number of bodies and there is a feeling that many VCS organisations are now more aware of what social enterprise is and what they could do to improve their sources of income from such activities. It also found that some organisations have undoubtedly developed their internal management capacity and are looking at trading opportunities or have started to develop these (e.g. generating income from new community premises). The potential for some VCS organisations to play a greater part in public service provision was also evident from the interviews with a selection of those already involved or interested in pursuing this route. The main findings were:

  • ‘There is a wide range of VCS organisations operating locally- some locally based, others part of regional/national bodies
  • Some have relationships with the public sector in terms of short term grants, albeit in the form of more demanding Service Level Agreements (SLA’s)- and some do not want or are not prepared to move away from this
  • Some organisations are already participating in competitive tendering
  • Some are considering a role as an ‘umbrella’ body to support the formation and development of new social enterprises to meet identified needs/ opportunities
  • Others are not quite sure how to ‘break into’ the explicit provision of public services or have met difficulties on the way
  • There is an opportunity to demonstrate the added value that VCS organisations can often bring to public procurement- e.g. developing user involvement and control as a basis for demonstrating potential advantages over public/private provision.’

Support for Social Enterprise