Tag Archives: Social Enterprise

Local Enterprise Partnerships and Europe – a role for VCS?

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When thinking of Local Enterprise Partnerships (LEPs) it is unlikely that until recently one would be likely to bring to mind such phrases such as social inclusion, social innovation or “community lead local development”.  Anyone attending The LEP Network conference in April 2013 – a gathering of the key influencers in the “LEPiverse” would have heard Mark Prisk MP talking about the role of LEPs in developing strategies for the allocation of European Funds[i]. Interestingly following this a panel of Chairs of LEPs was asked by an audience member what LEPs were intending to do for the Voluntary Community Sector (VCS)[ii] organisations.  The stark answer from the panel was “nothing”.

It was clear that at this time many involved with VCS organisations really didn’t understand what a LEP was and that conversely many involved with LEPs were unaware of the full implications of complying with European guidelines regarding development of an “inclusive economic growth” plan. Among these were EU and Government strategic priorities including:

  • Promoting social inclusion and combatting poverty
  • Investing in education, skills and lifelong learning
  • Promoting employment and supporting labour mobility
  • Enhancing the competitiveness of SMEs
  • Ability to address – social innovation, sustainable development, equality and anti-discrimination

The problem has been a deep misunderstanding by each party – VCS organisations and LEPs – of what the others can do, or are capable of doing and a possibly even bigger misunderstanding of the language used by the other. Yet the reality is that if VCS organisations can learn to communicate in terms LEP board members understand then now is the time that LEPs should be willing to listen.  According to Ted Ryan of RAWM[iii] the support agency for voluntary and community organisations in the West Midlands area 20% of EU funds must go to social inclusion projects and these must be match funded.  Who better to deliver this than the bodies which are already addressing these as part of their core competencies and have proven record of finding the match funding from various sources including Big Social Capital and the Big lottery Fund.

At a recent conference in the Black Country, Chris Handy of Black Country LEP and Group Chief Executive of housing organisation the Accord Group told Social Enterprise representatives that in their presentation to LEPs they needed to understand that they cannot make out that they are a “special case” but must understand that often they will be dealing with “hard-nosed” LEP representatives who will want to be shown the ROI as a priority and possibly will be “turned off” at a sob story.  Clearly VCS organisations need to learn to speak the language of growth that LEPs need to hear – after all that is why LEPs were set up on the other hand LEPs need to understand that some VCS organisations can be valuable partners in delivering their strategic plans.

One VCS organisation that has really got to grips with this is UnLtd[iv] the leading provider of support to social entrepreneurs in the UK.  In a report[v] due to be released soon they state they on average they provide support of £100,000 grant investment and £25,000 of staff resource per LEP.  They have developed a proposal explicitly addressed to LEPs to enable LEPs to work with Social Enterprises. For those VCS organisations wishing to receive support from LEPs there can be no better advice than to follow the lead shown by UnLtd – make your proposition simple and focus on the ROI

Tony Bray of BIS stated recently that in 2012 Social enterprises (including housing associations) showed growth of 57%, and a 58% growth in 2012. According to the same UnLtd report “Social Enterprises in the UK employ nearly 1 million people and contribute £18.5 billion to the economy”.  Surely these statistics if nothing else should be a wake-up call to LEPs.  Whilst of course there are other parties besides those in VCS in the mix that can help LEPs meet the requirements to successfully implement their strategies for EU funding,  there is little doubt that if LEPs and VCS organisations learn to communicate and work together there can be tremendous benefits for both in achieving their strategic aims.

My thanks and appropriate credit for their contribution to the following in producing this brief article: Ted Ryan [vi] of RAWM and Helen Ryman of UnLtd

[i] Following from the announcement November 2012 by The Department for Business, Innovation and Skills (BIS) that EU structural funds for 2014 -2020 were to be directed through Local Enterprise Partnerships.

[ii] VCS organisations are broadly defined as the following: Civic Society, Civil Society, The Third Sector, Non-Government Organisations (NGOs), The Voluntary Sector, Social Enterprises, Charities, Community groups

Social enterprises out-performing traditional SMEs – How can LEPs best leverage the growth potential?

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Business Secretary Vince Cable will speak at the launch of The People’s Business report today in Westminster. 

Tuesday 9 July 2013 READ REPORT

New figures published today in The People’s Business report reveal a thriving social enterprise sector in the UK that is attracting a wave of entrepreneurs. UK-wide research [1] carried out for The People’s Business shows that social enterprise has three-times the start-up rate of the mainstream SME sector [2]. Close to a third of all social enterprises are three years old or younger.

The report, released by Social Enterprise UK and supported by The Royal Bank of Scotland Group, says that social enterprises are much more likely to be led by women than mainstream businesses. Thirty eight per cent of social enterprises have a female chief executive, compared with 19% of SMEs, and 3% of FTSE 100 companies [3].

The figures show that people are gravitating from mainstream business to carve out a career in social enterprise. More people are moving from the private sector than any other sector to work in social enterprise (35%, compared with 33% from the public sector and 17% from charities and the voluntary sector).

The report also reveals a promisingly diverse sector. Almost a quarter (23%) of social enterprises are run by younger leaders aged 25-44, while one in ten (13%) are led by ‘silverpreneurs’ – people over the age of 65. And social enterprises are twice as likely as mainstream SMEs to be led by someone with a Black, Asian or Minority Ethnic background.

There are currently 70,000 social enterprises in the UK contributing £18.5 billion to the UK economy and employing almost a million people [4]. These businesses with a social mission include The Big Issue, Pants to Poverty, Belu Water and Jamie Oliver’s Fifteen.

Social enterprises out-performing traditional SMEs

Findings in The People’s Business point to social enterprises out-performing mainstream businesses. In the last 12 months, 38% of social enterprises surveyed saw an increase in their turnover compared with 29% of SMEs. More than half of social enterprises (56%) developed a new product or service, compared with 43% of SMEs. Two-thirds (63%) of social enterprises expect their turnover to increase in the next two to three years, almost double the number of SMEs (37%).

Creating jobs and tackling deprivation in local communities

The research shows that social enterprises are creating jobs and stimulating local economies where they’re needed most. More than a third (38%) of all social enterprises operate in the UK’s most deprived communities, compared to 12% of traditional SMEs – and half of social enterprises (52%) actively employ people who are disadvantaged in the labour market, including ex-offenders, people with disabilities and the long-term unemployed.

The majority of social enterprises (57%) draw 100% of their workforce from the local areas in which they operate, and a greater number of social enterprises are planning to grow their staff teams over the next 12 months than two years ago (33% expect to employ more people, compared to 26% in 2011).

Access to finance is main barrier to growth

Social enterprises say that access to finance is their single biggest barrier to growth and sustainability. Hungry for finance, twice as many social enterprises as SMEs sought capital in the past 12 months (48% compared with 24%). The average sum applied for by social enterprises was £58,000, suggesting a need for smaller-scale lending than is currently available to the sector from social investment sources.

In 2011, just 8% of social enterprises cited the economic climate as a barrier to growth – in 2013 this figure has quadrupled to 32%, the second biggest barrier for social enterprises to grow and become sustainable.

For social enterprises who mainly trade with the public sector, there has been an increase in the number who report prohibitive public sector commissioning and procurement as a major barrier to growth and sustainability. In 2013 the figure stands at 34%, up from 25% in 2011. That this situation has worsened rather than improved since the last survey should be of concern for policy-makers, says Social Enterprise UK.

The report makes a number of recommendations, including that:

  • Government should implement the Public Services (Social Value) Act to its full effect to public service markets with genuine plural provision in which smaller social enterprises can compete.
  • Policymakers and investors should recognise that grants and ‘softer’ social investment (which is patient and risky) remain critical parts of the mix for many social enterprises, and design financial products and support programmes to reflect this.