A rightly impatient public wants no more business as usual

Andrew Lansley was continually challenged by a frequently angry audience during last week’s Question Time debate. The Health and Social Care Bill has been pushed through at break neck speed. I sense a genuine fear of what looks like an increasingly inevitable outcome – a similar experience to that of the DWP’s Work Programme; great promises of a meaningful and modernizing role for the third sector but a reality where a small number of big businesses dominate. After all they are well capitalised, capable of achieving huge economies of scale, too big to fail, and they will of course deliver the efficiencies we all so desire and desperately need. After all, it did work with the energy sector, bus and rail de-regulation didn’t it? No.

Excessive profiteering, as we have seen in all of these areas, occurs when there are too few competitors, not when there are too many. Unfortunately Whitehall often has a very short memory.

A revolution in commissioning was promised by the last government, as it is by the current. Waiting for a great leap forwards in commissioning is likely to be the equivalent of waiting for a gentle and delicate Wayne Rooney to emerge out of the tunnel at Old Trafford. Chris White’s Bill could play an  important role in evolving commissioning but it won’t create the revolution we need all by itself. Strong US style anti-trust laws might help protect against the natural yet damaging monopolies that form when policy and commissioning favours only big business.

What’s more likely to have an impact is the sort of collapse of faith in big business ethics by consumers and more importantly voters that the protests across the world over the weekend suggest is beginning to emerge.  Before last Thursday’s Question Time debate got going there was a fascinating story about the 99% campaign camps set up in US towns and cities. From humble beginnings and a simple gathering on Wall Street, the movement has spread rapidly and appears to be developing rapidly across the UK too. The protesters call it a movement rather than a protest and are calling for a conversation on rampaging social and financial inequality. The campaign is centred on business ethics; excessive profiteering by global companies, business being bailed out by tax payers, avoidance of tax, over-exploitation of our natural resources and our communities.

It’s perhaps captured an underlying public mood – one that is growing, particularly in the developed world. Business has to change the way it operates; the siphoning off of ever-greater profits to a small, exclusive, globally-mobile elite must stop. The protestors argue that governments around the world have been far too complicit in enabling this globalized business culture to grow unchallenged. Now you’ll know from my last blog that I’m in favour of working with corporate partners where a meaningful relationship can be developed but the opportunity to co produce with value-driven businesses tends to be a growing yet still marginal opportunity rather than the norm – particularly within the foggy world of international capital and trading markets.

I’m currently travelling back from a meeting with PM training in Stoke on Trent. They work with around 1000 people each year providing training and high quality apprenticeships. I’ve blogged about them before. They’ve grown from a £2m to a £7m business in a short while. Last year 95% of their trainees (most of whom have faced multiple challenges in their early lives) completed their courses and, most importantly, secured work. It’s an inspiring organisation that continues to buy up private businesses and convert them into social enterprises. They have 42 homework teams providing garden and home maintenance to 5000 households of elderly and disabled people each year. They show exactly what can be done by socially-driven local businesses. In terms of outcomes they are capable of completely outperforming any big corporate and yet they are excluded from a range of government procurement opportunities because of their modest size or because the business case for them acting as sub-contractor-to-prime just doesn’t stack up. A report in the Mail on Sunday shown to me by Will, PM’s Chief Exec exposed how the apprenticeship programme is simply using taxpayers’ cash to provide existing staff within the big supermarkets with training labelled as adult apprenticeships rather than creating new jobs and training opportunities. It said that Asda alone has 25000 taxpayer-supported adult apprenticeships on the go, and not a single new job created as a result. Can’t the big supermarkets afford the cost of their own staff training? Wouldn’t it be better value to invest in the like of PM Training to expand their excellent work – safe in the knowledge that any profit they generate from public money would get reinvested into local communities, job creation and growth?

Is it any wonder people are angry on Question Time and taking to the streets in cities across the world?

Things aren’t changing fast enough and without much more ambitious thinking we know we will end up with more business-as-usual. The localism agenda needs to get a whole lot more radical. Collectively social enterprises must engage with the public and explain that they are part of the economic solution our world and our communities desperately need. Our new ‘Society Profits’ campaign aims to enable social enterprises and their supporters across the UK to do just that. Join our campaign, spread the word and show the angry and frustrated citizens around the world that a new, fairer economy can and will exist if we all collectively demand it. As you know that new economy must be built with social enterprise at its foundations.

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Apple pie and optimism

Sad news about Steve Jobs. I woke early yesterday morning to hear the news on Radio 4. He was cited as the most culturally important person of the last 30 years. The news was accompanied by a number of Jobs’ insightful quotes, but this one really stands out for me: “Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking, and don’t settle. As with all matters of the heart, you’ll know when you find it.”

I’m sure there’s going to be a lot of Jobs’ quotes in the media in the coming weeks and I apologise for being quite so obvious, but I love some of what he said as much as I like the products that he was integral in developing. At age 56 it’s a sad, tragic loss.

As Jobs knew, employee engagement and loyalty is much easier when you have clearly defined values to sell to your staff. It’s been shown to help with worker recruitment and retention, greatly increase productivity and reduce staff absenteeism. Running an organisation that bosses, staff and customers can have pride in isn’t just the right thing to do, but it’s the smart thing to do.

Professor Michael Porter at Harvard Business School has spoken a great deal about business creating greater shared value, and he’s not the only one. Large corporates are all too aware that people are taking a keener-than-ever interest in corporate values and sustainability when choosing with who they might develop their careers. Big businesses are also facing customer cynicism, which is at an all-time high. This is partly why I believe they are keen to work with social enterprises in ever-greater numbers. Over the past 12 months we have been working more with private businesses; we’re encouraging them to open up their supply chains to social enterprise, modernise parts of their corporate responsibility strategies and adapt their businesses to a fast-changing world by becoming ever more socially enterprising. Doing the right thing is not always at odds with profit – in many cases it can enhance it – and corporates can really engage their staff by being supportive of social enterprise. For the movement it’s an important step because we’re raising awareness of social enterprise at the heart of big business.

You may already know that PwC has invested in the Fire Station on Tooley Street, London Bridge and developed a new social enterprise hub – a base that signals their support for our sector (and will be Social Enterprise UK’s home soon). RBS Natwest has launched a new micro-credit loan fund, Microsoft’s new director of social enterprise is working very closely alongside us to maximise their sector impact and Business In The Community have launched ‘arc – Building Better Business’ a new support programme for social enterprises in London.

Relationships between the corporate sector and social enterprise sector have never been so potentially fruitful. I understand many people are concerned that our sector might be used to ‘cleanse’ the image of tarnished business that continues to behave in greedy and selfish ways, but I genuinely believe that the tide is turning and the relationships we cultivate are assessed on the balance of net-gain for society and the sector. We have engaged the corporate ear and we must wisely use this opportunity to create the biggest and best impact for our world by challenging and changing usual business doctrines.

Maybe it’s because we’re all in business that were beginning to build such productive relationships and understand how business needs to change. Business is getting this agenda much faster than many politicians – too many of whom see us as a peripheral, ideological and a marginal business sector. Ed Milliband was widely slated for talking about the role of good business, and how the predatory way of doing business needed to change. It seems odd that it wasn’t well received given that this is exactly the consensus that is emerging from business and economic analysts and across publications such as the Financial Times and the Harvard Business Review. Ed Miliband was a good friend to Social Enterprise in Government and he needs to give it support in opposition or risk having the socially-responsible business ground stolen by opponents.

We kicked off the conference season with the Liberal Democrats in Birmingham; highlights included agreeing a number of potentially impactful actions with the BIS minister Ed Davey. I just hope he can encourage the rest of his department to take social enterprise as seriously as he clearly does.

We were delighted to host our Labour Party event at Blackburne House, the social enterprise founded by my boss, and had a constructive discussion with Baroness Thornton, one of our new patrons, as well as Emily Thornbury MP, David Hanson MP and former transport minister Paul Clark about how Labour could create a clearer narrative on social justice, social enterprise and the role of good businesses in creating a fairer, more resilient economy. Themes that (surely by some coincidence) made their way into the leader’s speech later that day. I also shared a CBI platform with Helen Goodman MP and would have loved to accept her invitation to go for a dance if it wasn’t for a pre-booked train home!

We had a great breakfast with our minister Nick Hurd at the Conservative conference. He gave his time generously and is clearly sincere in his support for our shared aspirations for the sector. We had a collective discussion about some really important issues including the Social Enterprise Bill and the future of the Work Programme. I doubt it could be a more challenging time for any OCS minister than it is right now, but Nick’s knowledge of the sector and his obvious commitment to it creates the best hope we have of getting Government to take us more seriously and deliver on their pre-election commitments.

We also held a lively fringe meeting – thank you to our members for coming along. It was chaired by the Guardian’s Patrick Butler with John Coulthard (Microsoft’s director of social enterprise) and Richard Fuller (MP for Bedford). If you haven’t come across Richard then you should make yourself aware of him. A great orator, entertaining company and a fabulous and intelligent proponent of our sector. He gave a provocative and energetic analysis of what needs to happen to grow social enterprise: risk, more risk, planning for failure, capitalisation, innovation, localism and a revolution in commissioning. He’s an exceptional asset and one to watch.

What of the PM’s speech? The only thing I could think was where has the Big Society gone? It featured lightly with just two mentions. I’m guessing we’ll have to wait and see what happens there.

So the conference season is over and life returns to some sort of normality. Our conference activities are only made possible through the love and support of some of our members so thanks to P3, Sandwell CCT, HCT and Locality. Your investment on behalf of the whole sector is very much appreciated. As is the tireless work of the policy team here at Social Enterprise UK to get these meetings and events organised in the first place. A really big thank you.

See you all soon

Peter

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Apple pie and optimism

Sad news about Steve Jobs. I woke early yesterday morning to hear the news on Radio 4. He was cited as the most culturally important person of the last 30 years. The news was accompanied by a number of Jobs’ insightful quotes, but this one really stands out for me: “Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking, and don’t settle. As with all matters of the heart, you’ll know when you find it.”

I’m sure there’s going to be a lot of Jobs’ quotes in the media in the coming weeks and I apologise for being quite so obvious, but I love some of what he said as much as I like the products that he was integral in developing. At age 56 it’s a sad, tragic loss.

As Jobs knew, employee engagement and loyalty is much easier when you have clearly defined values to sell to your staff. It’s been shown to help with worker recruitment and retention, greatly increase productivity and reduce staff absenteeism. Running an organisation that bosses, staff and customers can have pride in isn’t just the right thing to do, but it’s the smart thing to do.

Professor Michael Porter at Harvard Business School has spoken a great deal about business creating greater shared value, and he’s not the only one. Large corporates are all too aware that people are taking a keener-than-ever interest in corporate values and sustainability when choosing with who they might develop their careers. Big businesses are also facing customer cynicism, which is at an all-time high. This is partly why I believe they are keen to work with social enterprises in ever-greater numbers. Over the past 12 months we have been working more with private businesses; we’re encouraging them to open up their supply chains to social enterprise, modernise parts of their corporate responsibility strategies and adapt their businesses to a fast-changing world by becoming ever more socially enterprising. Doing the right thing is not always at odds with profit – in many cases it can enhance it – and corporates can really engage their staff by being supportive of social enterprise. For the movement it’s an important step because we’re raising awareness of social enterprise at the heart of big business.

You may already know that PwC has invested in the Fire Station on Tooley Street, London Bridge and developed a new social enterprise hub – a base that signals their support for our sector (and will be Social Enterprise UK’s home soon). RBS Natwest has launched a new micro-credit loan fund, Microsoft’s new director of social enterprise is working very closely alongside us to maximise their sector impact and Business In The Community have launched ‘arc – Building Better Business’ a new support programme for social enterprises in London.

Relationships between the corporate sector and social enterprise sector have never been so potentially fruitful. I understand many people are concerned that our sector might be used to ‘cleanse’ the image of tarnished business that continues to behave in greedy and selfish ways, but I genuinely believe that the tide is turning and the relationships we cultivate are assessed on the balance of net-gain for society and the sector. We have engaged the corporate ear and we must wisely use this opportunity to create the biggest and best impact for our world by challenging and changing usual business doctrines.

Maybe it’s because we’re all in business that were beginning to build such productive relationships and understand how business needs to change. Business is getting this agenda much faster than many politicians – too many of whom see us as a peripheral, ideological and a marginal business sector. Ed Milliband was widely slated for talking about the role of good business, and how the predatory way of doing business needed to change. It seems odd that it wasn’t well received given that this is exactly the consensus that is emerging from business and economic analysts and across publications such as the Financial Times and the Harvard Business Review. Ed Miliband was a good friend to Social Enterprise in Government and he needs to give it support in opposition or risk having the socially-responsible business ground stolen by opponents.

We kicked off the conference season with the Liberal Democrats in Birmingham; highlights included agreeing a number of potentially impactful actions with the BIS minister Ed Davey. I just hope he can encourage the rest of his department to take social enterprise as seriously as he clearly does.

We were delighted to host our Labour Party event at Blackburne House, the social enterprise founded by my boss, and had a constructive discussion with Baroness Thornton, one of our new patrons, as well as Emily Thornbury MP, David Hanson MP and former transport minister Paul Clark about how Labour could create a clearer narrative on social justice, social enterprise and the role of good businesses in creating a fairer, more resilient economy. Themes that (surely by some coincidence) made their way into the leader’s speech later that day. I also shared a CBI platform with Helen Goodman MP and would have loved to accept her invitation to go for a dance if it wasn’t for a pre-booked train home!

We had a great breakfast with our minister Nick Hurd at the Conservative conference. He gave his time generously and is clearly sincere in his support for our shared aspirations for the sector. We had a collective discussion about some really important issues including the Social Enterprise Bill and the future of the Work Programme. I doubt it could be a more challenging time for any OCS minister than it is right now, but Nick’s knowledge of the sector and his obvious commitment to it creates the best hope we have of getting Government to take us more seriously and deliver on their pre-election commitments.

We also held a lively fringe meeting – thank you to our members for coming along. It was chaired by the Guardian’s Patrick Butler with John Coulthard (Microsoft’s director of social enterprise) and Richard Fuller (MP for Bedford). If you haven’t come across Richard then you should make yourself aware of him. A great orator, entertaining company and a fabulous and intelligent proponent of our sector. He gave a provocative and energetic analysis of what needs to happen grow social enterprise: risk, more risk, planning for failure, capitalisation, innovation, localism and a revolution in commissioning. He’s an exceptional asset and one to watch.

What of the PM’s speech? The only thing I could think was where has the Big Society gone? It featured lightly with just two mentions. I’m guessing we’ll have to wait and see what happens there.

So the conference season is over and life returns to some sort of normality. Our conference activities are only made possible through the love and support of some of our members so thanks to P3, Sandwell CCT, HCT and Locality. Your investment on behalf of the whole sector is very much appreciated. As is the tireless work of the policy team here at Social Enterprise UK to get these meetings and events organised in the first place. A really big thank you.

See you all soon

Peter

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Hello Autumn

August is over, my tomato plants look tired after a long and successful summer harvest, the kids are heading back to school, the Libyan democrats have taken control of Tripoli (that’s Libyan, not Liberal, just in case you thought you’d missed something), and the evenings have begun to get depressingly shorter. I’ve even started using my lights on my cycle home.

There are lots of things to consider in the wake of the summer‘s civil unrest and a desperate need to constructively respond to the challenges they pose and not to just simply walk on by.  How we might remedy the inequality that now exists in Britain (and shows no sign of slowing – on this we’re up there with the US as the most unequal Western countries) and create opportunities and brighter futures for our young and disaffected communities, needs to be addressed. Based on requests from our membership and a fired up staff team, this is something we’ll be trying to tackle at our youth focused policy debate at the fantastic social enterprise PJ’s Community Services in Croydon on September 28^th.  We’ll be capturing the thoughts of young people and social enterprise leaders, and presenting their thoughts and ideas back to politicians in the coming weeks and months.

I think there’s a risk that systemic unfairness could become accepted in Britain, and deemed impossible to change. The young have been demonised for a while now, but it seems that we’ve also started demonising the undeserving poor.  Not always helped of course by the spinning activities of our politicians (I’m not talking about an exercise class here). Today, the reoffending rioters are being called a feral underclass by our justice secretary, as if that’s really going to help, and not that long ago Polly Toynbee raised the issue. A government press release detailed the top ten excuses given by ‘benefit cheats’.  The real story is that fraud costs £1.6billion, just 0.7% of the benefits bill.  The story was covered on BBC television news that bank holiday weekend in late May – and the stats weren’t quoted – so imagine the millions of people who were exposed to the scaremongering. It only served to play on people’s fears, pitting the mainstream against the UK’s poor, stirring up unnecessary feelings of anger and hatred, and dividing society.

All the political parties promoted principles of fairness in their election campaigns, so what’s actually been done to try and achieve a fairer, kinder society? How far have we got?

Job insecurity, flat lining wages, unaffordable housing, poor pension prospects, increasing crime rates – all suggesting not that far, and there’s not much in the way of policy that suggests it’s going to get any better. We need a revolution and that revolution needs to start here, within the social enterprise movement. We need to be bolder, more evangelical, we need to shout from the roof tops, phone into radio debates and be heard.

Good on those who defended young people in the media recently. I heard a charity youth worker call into LBC radio, and my lovely Mum wrote into the Daily Mail getting a mention for social enterprise!  Thank goodness for the voices of people like this who suggest ways in which we can remedy the country’s problems without wanting to dish out blame.  Social enterprises have many solutions and ideas and now is no time to be reticent; we need to keep the debate alive and relevant.

Social enterprise helps create a fair and prosperous economy. Germany has a much more plural basis for its economy; ownership is more equally shared and is richer, more resilient as a consequence.  Social enterprises don’t just create wealth for their owners, but create and share wealth for others too.

If we in the UK simply continue in our sole pursuit of growth without considering how we also tackle inequality we’ll all be worse off.  Research shows that in more unequal societies it’s not just the poor who are miserable, it’s the rich too.  We know that there’s no correlation between GDP and happiness.

While on the subject of mental wellbeing, happiness was not an emotion that my friend (a lifelong Arsenal supporter) was feeling after his team’s shocker of a defeat to Manchester United. Almost weeping into his pint (not really, but I’m sure some fans did) he told me that he’d not bought a season ticket this year because the price had gone up yet they’d sold two of their best players.  “It’s all about the shareholders”, he said.

I suggested that more clubs follow the lead of AFC Wimbledon because football had lost its way, was crapping all over the fans, and that money was ruling and ruining the game.  “It’s a nice idea, but it’ll never happen,” came his reply.

I disagree – and I’d be in the wrong job if I didn’t think that the Premier League could feature more employee-owned clubs, or that business could be kinder. Too many people seem to be of the belief that ethics in business are an aside, a luxury to the brutal way that most business must unfortunately be done.

My diary is jam packed between now and Christmas.  My days are going to be long (can you hear the violins?). But seriously, I’m not complaining, not at all.  At Social Enterprise UK HQ we’re seeing an upsurge in interest – potential start-ups looking for advice, social enterprises realising that they’re part of a movement (it still amazes me how many organisations there are out there that don’t realise they’re actually a social enterprise), but perhaps most interestingly, big corporates are knocking on our door wanting to know how they can get into the world of social enterprise.

I think my next blog is going to talk about why social enterprise needs to work more closely with the corporate world.  We’re not going to change the face of UK business unless we work with those already in it, are we?

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Out and about meeting people leading the real fightback

I didn’t want to write about the riots. It seemed somehow too opportunistic but there are things that have been whirring around my mind, disturbing my sleep and creating a growing sense of frustration.  I feel compelled  to start any contribution regarding the riots with the prerequisite condemnation of violence and  and assertion that there can be no excuses. My failure to do so on my Facebook updates led to some pretty angry comments. I naively thought that it went without saying that there are no excuses for such destructive actions – that now said,  we sooner rather than later need to move the debate on. We have to go beyond righteous indignation and the language of feral youth, rubber bullets and army interventions if we are going to change rather than simply contain these destructive types of behaviours. There are causes that are deeply engrained within the society we have created.  We have created in our towns and cities  communities of young people that are hopeless – lacking in hope. A generation that believe that they can only command dignity, self value and the  respect of their peers by what they are able to wear and consume, a generation that has aspiration but no belief in their abilities to achieve the celebrity  lifestyles that are so aggressively marketed to them, represented across our media in magazines, sports pages, advertising, news, film and tv. The traditional mechanisms of achievement – working hard, relevant education and contributing to our communities are no longer perceived to offer the opportunities to succeed in life.  Many that exist within these communities  have a belief that greed is good and taking what you want by whatever means is acceptable, is perhaps the only way to get what we’re told we need. A view that is too frequently endorsed and echoed across society and by adult role models everywhere – everyone’s on the take and so why don’t we just take it. Expenses scandals and the banking crisis have only served to expand and mainstream these notions. Popular television programmes like The Apprentice and Dragon’s Den perpetuate the principle that it’s money that matters above all else. Our power to buy and consume defines us and is the only relevant measure of success.

Our political leaders have been complicit in this messaging. Money and the ability to buy what we want whenever we want is all we apparently want. Peter Mandelson was entirely relaxed about people becoming filthy rich, the current administration and indeed the shadow cabinet seem to demonstrate that money is a critical factor in achieving a good education, good prospects, power and success. You’ve probably got more chance of winning the lottery than of ‘making it’ if you’re from a poor background, have useless parents and attend a sink school.  And the evidence is flooding in that cuts are hitting certain people with disproportionate ferocity; the young, the poor and the black communities are not faring well, although they are by no means the only ones that have very nearly lost it all.

When at Sunlight I worked with lots of young people some of whom who would frequently be labelled as ‘chavs’ – a miserable term for young poor people. One young guy, just 17,  had absent parents, no qualifications, a drug, drink and thieving habit and no permanent home. He was heavily criminalised – peddling stolen stuff, drugs and was happy to risk everything by robbing and dealing because in his view he had nothing left to lose and no real opportunity to get what he thought he wanted from life. This lad is now an FA-qualified footie coach and runs 4 weekly football teams. He’s now a responsible father of 2 children and an influential role model, a community leader and a friend to scores of young people in a very challenged, highly deprived community. He plays the role of parent to many. Well he does now, but won’t be able to in just four weeks’ time. The contracts he had through the extended schools programme, his employment through his local development trust, bits of additional funding he sourced through a patchwork of small grants that paid for kits, match fees and transport are all evaporating bit by bit, leading to the closure of the project and the end of his job. The temptation to return to less productive ways of living will not suck my friend back into his old ways but I can’t be so sure that the same is true for those who rely on him.

Today I visited one our members in Harlesden NW London. What Jennifer and her crew at Bang achieve is astonishing, hundreds of young people engaged in projects that meet their individual needs and talents. Jennifer is constantly having to use her creativity to crawl through the hoops and processes that her customers and funders create. It gets in the way of meeting the needs of young people. She and her team are expected to transform lives within the contracted 30 hours of contact which they get. Not 30 hours a week, not 30 hours a month but just 30 hours. That 30 hours of funding is expected to take a frequently cynical, beaten, unmotivated young person lacking in basic skills and develop them into a work-ready, reliable, purposeful person. Jennifer describes many of the young people with whom she works as people born without any known reason for their lives.

It’s easy to feel sad and pessimistic. But Jennifer asked me to do something. She asked that I search for funding that will enable young people from within our most disadvantaged communities to set up their own social enterprises. “If we all work this way in the future then we’ll be alright, if we continue to work like the banks and normal businesses then we won’t,” she says. “The good thing about setting up a social enterprise is that you can’t lose. Even if your business goes under then you still haven’t lost. You’ll have business skills, social skills, connections and you’ll understand you have a purpose and a reason for your life – I set one up  because I knew I couldn’t lose.”

The government needs to be radical – they need to link social and economic policy, we need to move away from business as usual because business as usual has failed our most challenged communities for decades and has more recently shattered our economy for good.  A more balanced and plural economy with social enterprise at its heart will not only radically improve the way public services are delivered but could create the opportunities and most importantly, hope. Opportunity, mobility and hope offer the only real solutions to what the recent violence has highlighted – social dysfunction on a grand scale.

Peter

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Growth and cheer in turbulent times

Today we reveal the findings from Fightback Britain – our report on the findings of the State of Social Enterprise survey which we carried out earlier this year. We chose the name because the evidence shows that social enterprises are trading, growing, diversifying and starting up fast in the UK’s most deprived communities. This is the stuff of economic fightback, and we hope politicians, commissioners and consumers pay heed and choose social enterprise in the future.

You’ll know only too well that social enterprises are by no means finding it an easy climate.  I’m only too aware that some of our members, doing some of the most incredible work, with some of the most vulnerable communities, are fighting for survival. So much uncertainty remains that forward planning is for many, limited to no more than a 3-month view.

But alongside those businesses that are desperately looking to adjust, adapt and survive  are social enterprises that are growing, thriving and seizing opportunities.  PM training is one such company that has added to its growing family of businesses by buying two further businesses and converting them to social enterprises – delivering impact and profit – profit that may well eventually be made available to fuel growth for other businesses in our sector.   Jan Golding at Roots HR, another SE UK member, tells me she has never been busier.  HCT Group have added another £8m to their business portfolio over the last 7-8 months, growing their overall turnover by more than 25% and Cool to Care is achieving growth, attracting investment and transforming the quality of care right across the country.  London Early Years Foundation continues to grow its portfolio of nurseries and shrink its reliance on public sector funding.

The experience in Scotland continues to make the country an attractive prospect and a safer bet for both existing social enterprises and start-ups.  On a recent trip to Scotland I had the privilege of meeting the CEO of 10,000 hours CIC – an organisation that I believe has the ambition, drive and creativity to develop it into a multi-million pound business within only a few years.  It’s not just their plans for growth that are astonishing – it’s the way they’re co-operating with a range of community groups, charities, other social enterprises and neighbourhoods to really turn the football club (St. Mirren) into a true community asset.  The Scottish Government are also investing significant resource in bespoke business support for social enterprises across Scotland, something that’s still sadly lacking in England.

The report we publish today shows that the trend across the UK is that many social enterprises that continue to achieve growth are doing so by evolving their products and services into business-to-business markets and by trading directly with consumers.  We all know that times are tough but social enterprises are incredibly innovative.  Most are not accepting the current situation, many are adapting to these uncertain times with energy and vigour and doing all they can to ensure that the impact they generate will be safeguarded by being more entrepreneurial than ever.

Thank you for your ongoing support of what we at Social Enterprise UK are trying to do on your behalf, I can assure you that those of us working in infrastructure organisations right across the third sector face the same challenges as many of you are experiencing right now.  We’re trying to be as enterprising as we can be to ensure our own impact continues to develop and grow.  As always we need your stories of what is happening within your businesses so we can influence thinking as we did with the development of Chris White’s Social Enterprise Bill, and with realisation of the Big Society Bank now called Big Society Trust and Big Society Capital.  We hope you like the report and our new bolder approach to our communications with the new brand of Social Enterprise UK.  But the best is yet to come – you’ll have a new web platform from us in 6 or 7 weeks that promises a new approach to the way our ever-growing membership interacts with us and should deliver new ways of finding the support you’ve told us you need and find useful.

I look forward to seeing many of you as we embark on the ever-busy party conference circuit next month. We’ll be pushing for sector-specific business support to be made available; for a new bespoke regulatory framework for social investors;  for the government to make good on its commitment to see that at least 25% of all public sector budgets are spent with SME’s by revolutionizing the way commissioning and procurement decisions are made. And we’ll be pushing to ensure that all politicians recognise that social enterprise is not just good for social value but that it is also about creating the sustainable economic renaissance our country and communities so desperately need.

 

 

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What an interesting week in the media

There was something quite delicious in seeing a social enterprise newspaper (for me the Guardian with its ownership sitting with the Scott Trust is a social enterprise, however they describe themselves!) be value led, tenacious, committed, and ultimately seek to protect democracy and ensure that the laws of the land are applied to all, no matter what their position in our society.

I know the rolling news can become repetitive and as a result a wee bit tiresome, but let us never forget just how serious this piece of news is. It’s not about celebrities’ right to privacy being infringed. It’s not even about the appalling and unbelievable decisions made to invade the lives of families affected by dreadful crimes. It’s about a private company having vast influence, verging on control of our democracy, having been exposed.  Well done to The Guardian, Chris Bryant MP, Norman Fowler MP and Tom Watson MP – all of whom were under all sorts of pressure to back down and go away.

But whilst the story keeps unravelling, other pieces of news have been almost entirely lost. The ‘opening public services’ white paper emerged yesterday with more of a whimper than a bang. We were all mightily frustrated. We worked hard to make the voice of social enterprise be heard; we were even lined up be on Radio 4 Today, then the PM programme, but the story was dropped at the last minute as more News International revelations emerged. One might say a good day to bury bad news.

The white paper (though actually positive in parts) poses as serious a threat to our public services and to the vision of a more plural economy in which social enterprises can grow their contribution to economic and social recovery – and demonstrate that Big Society isn’t just about volunteering.

I’m concerned that these proposed reforms will create an unequal playing field in which social enterprises are unable to compete with large private sector providers for public sector contracts.  In too many instances we still struggle to find the capital required or do not have the scale to compete with big private businesses in public sector markets, where the commissioning process favours the big – and by design excludes the small and the medium.

The frustration of government that a public sector monopoly stifles efficiency, innovation and value will not be resolved by replacing a public sector monopoly with a private sector oligopoly. It hasn’t worked in transport deregulation or the introduction of competition following the privatisation of our utilities.  And the risks of getting it wrong in other parts of the public sector are very, very serious.

Yes reform is necessary, but these plans must protect our shared interests in public services, not put them at risk.  Without the necessary safeguards, these proposals will allow big private providers to dominate public sector markets.  Taxpayers’ money will flow into profit seeking organisations that exist only to satisfy the needs of their shareholders.  Public services must operate for the communities and people they serve, nobody else.

The Government’s plans to extend Payment by results will put private sector organisations at an automatic advantage.  They’ll simply use their stronger balance sheets and ability to attract private investment to win contracts.

We only have to look to the Department for Work and Pensions Work Programme to see that when markets open up, large private sector providers move in and squeeze out smaller organisations.  A tiny proportion of the contracts went to social enterprises despite it being hailed by Government as a boost for the Big Society. What happened to the WISE group in Scotland was scandalous and had their whole value been considered within their tender they would surely have romped home to victory.  Their smaller size and access to capital was their downfall, NOT the quality, design or track record in delivery – all of which I know were outstanding.

A You Gov poll carried out for us shows that people do not want the private sector to run public services.  Our research was carried out before the Southern Cross debacle and there’ll be even more cynicism now about big corporations and their involvement in our national treasures.  It is encouraging that the majority of those surveyed said they wanted public services to be run by social enterprises.  We hope the politicians are taking note of this public opinion.

The important question now is how serious is the Government’s want for social enterprises and mutuals to play a bigger role in public service delivery.  The country’s policy makers need to lever in investment and infrastructure to ensure that there are enough of them in the marketplace able to deliver.  But the £10million support programme announced by ministers last year to do just that, has not yet materialised.  It’s an anxious waiting game.

I am aware that social enterprises out there delivering public services share my fears. A few glimpses of the trends emerging from the forthcoming state of social enterprise survey – due early August – say they are.  We are all becoming increasingly uneasy if the opportunities promised by Government will materialise:

• Social enterprises trading mainly with the public sector anticipate they will make half of all the likely redundancies within the social enterprise business community over the next 12 months.
• Social enterprises doing most of their business with the public sector view the coming years with gloom, with markedly lower business confidence than their social enterprise peers trading with consumers and private businesses.
• Of the social enterprises trading mainly with the public sector, two-thirds anticipate that their growth will come from diversifying away from working with the public sector (64%).

These are sombre findings in tough times.  But we won’t give up the fight.

Till next time.

Peter

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Can Big Society ride to the rescue of Southern Cross?

(And why the Premier League is making my blood Boyle…)

I’m sure many of us have considered the Southern Cross debacle within recent weeks. Was this inevitable? Is this a taste of things to come for other outsourced public services? An investigation by the Financial Times has recently shown that the quality of care in one in seven privately run homes in England was rated “poor” or “adequate” by the government regulator. These low ratings indicate potentially serious problems such as a failure to adequately to feed or clean residents. By contrast, the low ratings applied to just one in 11 homes run by non-profit organisations or local authorities (based on April 2010 ratings from the regulator the Care Quality Commission).

Of course there are excellent privately run care homes, but it appears the desire to deliver profits in excess of what might normally be expected – by carving up the company several years ago – has led to a serious crisis.

To me it seems there are three options:

1. The ultimately inevitable government bailout of Southern Cross happens and the status quo limps on, on the basis they become financially viable of the business. But this seems to be unlikely given many costs (staff) have already been cut to the bone. How they will shed another 3,000 employees without further reducing the quality of care is a critical question to be answered.
2. That one or some of the charity residential care providers and supporters of older people – such as Leonard Cheshire, Abbeyfield and Age UK – either alone or together are encouraged to get involved in the delivery of these essential services. Although given the time pressures, risk and mission drift this would cause, it’s very unlikely. If I were in government I would not hold my breath for too long.
3. But there is a potential third option. One that has been missing from the debate thus far and that is the role of social enterprise. There are big questions that need answering before I can be sure that it would work, but surely we need some transformative thinking here rather than how we patch up a model of care that simply can’t work.

I’m suggesting that we form a new CIC Ltd by share; let’s call it ‘Fair Care’. We appoint an executive board with a power-house chairperson who government will listen to and we make government a shareholder, perhaps with a golden share. We recruit sector specialists who have turned around care services before – Geoff Walker (Sandwell CCT), Victor Adebowale (Turning Point), Margaret Elliot (Sunderland Homecare) and Maria Mills (SCA Group). We bring in a couple of former local authority CEO’s or directors of social care, some social financiers – and have a couple of government seats on the board. And then we bring in the experts who can sense check a business plan in a tight time frame.

The ‘Fair Care’ CIC board is socially driven, bespoke and fit for purpose, but it doesn’t deliver – it oversees delivery and commissions from local and national charities. It’s a kind of ‘network rail’ solution only much, much better. Equity investment could potentially come from church resources and perhaps from charity reserves – particularly those involved in older people’s care. Investment could flow from private sources and from government too.

Charities big and small could deliver the operational side – they get rate relief and an 80% reduction in rates is a very substantial saving for care homes – often the equivalent to four or five full time staff! Then throw in the power of social enterprise delivery models – their ability to create value through staff engagement, training, recruitment and staff retention. We know that social enterprise care homes (most of which have charitable status often because of the tax relief available) have driven down costs, not by cutting staff but by driving up productivity, reducing absenteeism, co designing services with carers and beneficiaries, and leveraging vast amounts of social capital and genuine value through the trust they have developed with their stakeholders. Can you ever imagine a local community volunteering or raising funds to support the endeavours of Southern Cross? Or an elderly resident bequeathing their estate to a PLC?

Of course it’s not as easy as it seems. There are many questions that require clarification and lots of hurdles too. What are the liabilities? What is the working capital required from government and loan investment? How investible is this new business model? What are the terms and conditions of existing contracts with local authorities? The lease arrangements and opportunities to negotiate with the Southern Cross property company? The TUPE implications?

But if we’re given some of the answers to these questions then a social enterprise solution can be found. And the well being, security and safety of the most vulnerable people within our society must be found alongside a trusted long-term approach to the care of older people.

Crisis is a great opportunity for innovation, fresh thinking and for the delivery of new approaches. Let’s hope the government sees the opportunity beyond the crisis. I’m asking our sector to come forward with more ideas, more questions and to contribute to the debate. I believe this could be an opportunity for social enterprise – and for the principles in Big Society – to shine.

Let’s get a roundtable organised, thrash out the details and make a coherent case to government that this is an area where transformative thinking is required.

Peter

An important ps.

I was absolutely gutted to hear that Dave Boyle, CEO from Supporters Direct (one of our members), was forced to resign following a twitter outburst about MK Dons, franchise football and the Premier League’s role in the whole thing. I was with Dave the day after AFC Wimbledon were promoted to the Football League after our original club was bought and moved nine years ago. I had a couple of celebratory pints with him. He’s a great guy and has achieved a vast amount with Supporters Direct for the benefit of football, rugby league fans and communities right across the country.

For AFC Wimbledon and other social enterprise football clubs that are community owned, the withdrawal of Supporters Direct funding and the Premier League’s insistence that it had lost faith in the organisation’s leadership following the indiscreet tweet, is just another sign that the Premier League is out of step with the people.

Lots more to say, but no time to say it, so I’ll try and blog again very soon. Thanks for all your personal messages of support over the last couple of weeks – it means a lot.

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Clean money … dirty linen.

A recently-retired senior civil servant emailed me recently, saying “I have a smallish but not insignificant sum to invest and you’ve sold me the social enterprise vision. What investment opportunities exist within the sector – do you know of any?” at moments like this the realities of connecting demand and supply – both exciting and depressing – come crashing in.

Access to more mainstream capital is critical if we are going to realise our ambitions for social enterprise. While many incredible social enterprises don’t have an appetite or ambition for turbo-charged growth, many, many do. While it’s true that the Co operative Group has grown its business only through reinvesting its own profits, plenty in our movement don’t want to wait decades to realise the growth they could achieve if capital were more accessible.

Of course the Big Society Bank is a welcome addition but let’s be realistic. It’s not and will never be the whole answer to our needs.

The much-discussed Social Stock Exchange perhaps provides a bigger opportunity for us. We know there are people out there who live ethical lives; consumer trends suggest that this market is resilient and growing. But while it’s easier and easier to buy with a conscience how easy is it to invest with the same level of diligence? Although ethical savings and pension funds are now more common I question just how ethical these are. I have a small green pension fund but I suspect it’s a very pale shade of green.

A social stock exchange could be a game changer – it could bring together successful socially beneficial enterprises and connect them to sources of investment that are hungry for a blended return.

We have nearly a million people working within the sector who could be potential investors, we have any army of supporters across other sectors, we have charities with large reserves in traditional and often dirty investment portfolios and billions of pounds in local authority investments. This money could be working for our communities, stimulating growth and innovation rather than simply looking for the highest and often risky financial return (remember local authority Icelandic investments anyone?). A social stock exchange could realise the level of investment in our sector that we need to fuel growth and exploit opportunity – and most social investors would be happy with bonds rather than simple equity – so ownership and values need not be compromised in the process. I’m supporting Pradeep and Mark in the creation of the Social Stock Exchange – I’m hoping you do too.

On a slightly different note I thought Monday’s FT article on future outsourcing was very revealing. The big companies that churn billions of pounds of tax payers money simply don’t see the wider sector as a threat:
“there is no way on the planet that these contracts are going to be let to a charity…the (charitable) sector will not be a massive player in the delivery of public services as they “simply don’t have the scale and can’t bear the risk of things going wrong.”

They could be right but, as any smart cookie knows, you should never underestimate your competitors. This sort of lazy complacency may well be their future Achilles heel. Of course we recognise that scale and capitalization remain major challenges for us but we are developing fast – new ideas around Social Enterprise LLP’s, new bonds, growing public awareness, lord Hodgson’s red tape task force for charities and social enterprises , ever growing evidence of our sector’s resilience, economic success and social value are putting us in an increasingly better place SO, despite the dreadful economic circumstance the future could still be ours. Our soon-to-be launched State of Social Enterprise survey will reveal some reasons to be cheerful and some reasons to feel very proud. More to follow on that one!

Finally I was in Edinburgh last week to meet peers from Scotland, Wales and Northern Ireland. Exciting stuff is happening in Scotland where a net increase in resources for the sector has been announced. It appears rhetoric is turning into reality in Scotland. New opportunities are emerging in Wales although the cuts are hitting poorer communities incredibly hard and the Northern Ireland Assembly are slowly but surely waking up to the role of social enterprise in developing a robust and resilient mixed economy. Across the UK nations we have agreed to work more closely than ever, syndicate content, develop closer policy alignment and do much more co-production than ever before.

We finished the meeting with a visit to St Jude’s laundry which Forth Sector has recently acquired. An amazing place providing the cleanest, freshest laundry to corporate and private customers – it even has a royal warrant.

It was a great way, once again, to reconnect with the values, innovation, impact and diversity of the sector. It currently employs around 40 staff. A thriving, competitive, viable business that is working with some of the most marginalised people in our society. It has ambition, it has soul, it has happy customers and I’m in no doubt it has a great future.

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Your views please

Since 2002, when SEC first came onto the scene, a huge amount has changed in social enterprise, as have we. Looking ahead there will be opportunities as well as challenges, but we’re certain the movement will grow and achieve even greater things for our communities, our society and our world. And so we want to make sure that our identity is spot on, and works for our members and the wider movement. It’s also time for a brand that works beyond the political arena. We’ll be changing our logo and perhaps our name too.

We want – we need – you (our members, supporters and friends) to tell us what you think. The more people who give us their thoughts, the better the end result will be for social enterprise. It’ll only take a few minutes to fill out the survey.

Thanks very much!

Peter

On another matter – it was very remiss of me not to mention in my previous blog the wonderful team at my old haunt, café sunlight, for the great service they provided on the evening of the Social Enterprise Awards. It was wonderfully done. Well done to Dave and Audrey for getting it so very right and it was a joy to see many of the old team – like Rob, Charlene, Lauren and Josh – still developing and growing into roles they so clearly love. You did us all proud – so thank you for being part of such a fantastic event.

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