Many of the ‘Changing face of social enterprise’ stories we have so far covered as part of our Big Lottery ‘Awards for All’ project have been very new and very small social enterprises that are just starting out. What they have to tell us about the challenges of developing new-start social enterprises in the current climate is extremely instructive.
But today’s story offers a very different example of how new social enterprise opportunities are being created — this time in partnership with a local authority.
We’ve written elsewhere on this blog about ‘re-use shops’ — in particular, The Re-Users outlets established by The Jericho Foundation (here and here), where household items destined for landfill are rescued, restored and resold. The financial, social and environmental benefits of diverting saleable materials from the waste-stream are now widely recognised. Jericho’s Richard Beard has said: “It’s extremely profitable, the environmental benefits are huge and the social impact is terrific. I’d have a Reusers at every tip if I could manage to do it.”
Over the past couple of years this is exactly what Warwickshire County Council (WCC) has done, in the process taking social enterprise-based re-use activities to an entirely new level.
WCC has recently undertaken a competitive ‘franchising’ exercise that has seen Age UK Warwickshire (AUKW) win the right to operate all eight of the County Council’s recycling centre re-use shops, as well as whole-site operation of two small Household waste Recycling Centres (HWRC).
This is generating hundreds of thousands of pounds for the council, millions to support Age UK Warwickshire’s service delivery, and diverts over 700 tonnes of material from landfill every year.
Prior to 2014, WCC’s re-use outlets were offered as concessions to third sector groups and four different organisations operated the eight outlets, typically paying a peppercorn rent of around £12,000 a year to do so.
But WCC realised that the commercial potential of the re-use sites was far greater than this arrangement recognised — even in 2014 some of the Warwickshire outlets were turning over more than £250,000 a year — and began the process of ‘auctioning’ off these lucrative sites. This will earn the council more than £300,000 a year in franchise fees and there will also be savings — perhaps as much as £75,000 a year, according to analysis by Sustainability West Midlands — from reduced waste disposal costs and Landfill Tax. But in addition to this, WCC’s project manager for waste management community services, David Whitehouse, also believes the sites ‘offer a sustainable platform for social enterprise’.
WCC believed that the commercial potential of these sites, coupled with the social value and environmental benefit they could deliver, would ensure that the bidding process would attract charities and social enterprises. It was proven right. There were a total of 26 expressions of interest submitted when the tender opened, eventually resulting in five compliant bids. The process was also open to private sector bidders, of course, but the business rate relief available to charities made the deal especially attractive to the third sector — and perhaps especially to the new hybrid form we are seeing many charities adopt, where social enterprise ‘trading arms’ are used to generate revenue that can support the charity’s work and also in some cases create employment opportunities for the client groups it works with.
Sustainability West Midlands, which has written a case study of this initiative, estimates that were it applied to all of the remaining 1,056 recycling centres in the country it would generate an additional £35m a year for local authorities.
Ramping up its trading activities means that AUKW has created 25 new, full-time equivalent jobs and is able to put additional resources into its services — such as befriending, information and advice, Age Well exercise clubs, and specialist day clubs and lunch clubs. It also helps support the organisation’s key campaign causes, such as addressing the crisis in older people’s care, improving hospital transport, reducing social isolation (especially amongst older people who have lost their loved ones) and loneliness.
Whether viewed from the perspective of increasingly commercially-minded social enterprises, or from that of cash-strapped local authorities seeking to generate income that will help offset public spending cuts, AUKW’s re-use outlets represent a truly significant development in the creation of new social enterprise trading opportunities. The award winning initiative has been extensively covered in the local government and environmental media and elsewhere and you can find out more below.
→ Overcoming austerity through franchised recycling — coverage at the Public Sector Show (Manchester Central, Nov 2017)
→ Send mail to Warwickshire County Council waste management services
→ Send mail to Graham Oliver, Area Manager, Age UK Warwickshire