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Looking for the low-down on the likely impact of public spending cuts on the third sector?

As a starting point, here’s the Treasury press statement of the 24th may 2010. Clare Yeowart at New Philanthropy Capital has begun a more detailed analysis here of the implications for charities. BUt the prize currently goes to Karl Wilding at NCVO for the labour of love he has begun here in a post titles ‘The axeman cometh’.

Based partly on Institute for Fiscal Studies data, Wilding estimates that the impact on the wider third sector will be to effectively set it back six to seven years, returning its funding from public sources to 2003/04 levels.

He follows this with some interesting speculation regarding which organisations — of the c.40,000 VCOs in direct receipt of public funds — will be hit hardest. This shows that the sectors at greatest risk — i.e. those receiving the greatest proportions of public funding (whether by grant, SLA or contract) — are: employment and training; education; law/advocacy; social services; housing; umbrella bodies; health; and development. These all receive in the order of 40%-70% of their income from public/statutory sources. There is then a major step down to culture and recreation (25%).

IN an attempt to ‘crowdsource’ more widely representative data, NCVO has a new link here for organisations to contribute their own information.

St Paul’s Community Trust celebrates thirty years’ service

St Paul's in blossom

St Paul’s Community Trust this year celebrates its 30th anniversary — thirty years of uninterrupted service. In fact, it’s even longer than that — the thirtieth birthday marks only the date of incorporation and charitable status.

St Paul’s actually began in 1973 and has its origins in three groups that joined forces to establish a nursery, an adventure playground and a small school. It grew out of a desire amongst Balsall Heath residents to make a better future for their children. St Paul’s really is a story of grassroots community action. From these small beginnings in voluntary endeavour, St Paul’s has grown to be an unmistakeable part of the Balsall Heath landscape — and one of the area’s largest employers and providers of services.

A couple of weekends back it was St Paul’s Spring Fayre. The weather was glorious and there were events at both St Paul’s main building and at St Paul’s Venture — a beautiful spot, for anyone who isn’t familiar with it, with its lovely custom-built nursery and urban farm. There were cooking demonstrations, a recreation of a Victorian classroom, games for the kids, plants and great food on sale and a warm and welcoming atmosphere.

Congratulations to everyone at St Paul’s on their 30th+ Anniversary!

Colouring and drawing

Outdoor games at the Venture farm

Fathers and children in the Victorian classroom

#296-10

Click on the thumbnails to see larger pictures.

Social enterprise in Queen’s Speech

For the first time ever, today’s Queen’s Speech included the words ‘social enterprise’! Outlining the programme for the incoming coalition government the Queen said:

‘The role of social enterprises, charities and co-operatives in our public services will be enhanced.’ See Social Enterprise magazine.

I wondered how this Queen’s Speech compared with Blair’s in 1997 — partly because I’ve always thought that one of the greatest joys open to a new prime minister must be putting unintelligible jargon into the mouth of the monarch. For instance, from 1998: “A Bill will be introduced to replace the NHS internal market which put hospitals, doctors and nurses in competition with each other. In its place will be decentralised arrangements based on partnership, quality and efficiency to put doctors and nurses in the lead in shaping local services.” I bet HRH was thinking,’ Crikey, that’ll fix it!’ But perhaps she also thought that this year, too…

Anyway, The Guardian got to this idea ahead of me and you can see a’wordle’ comparison of the first Blair and Cameron QSs here… And it turns out they are remarkably similar when represented by frequency of usage of individual words.

If you feel so inclined you can browse the Parliament archive of Queen’s Speeches here.

Some thoughts on ResPublica’s ‘The Venture Society’

In these very early stages of the new government it is hard to forecast what will have real influence in shaping policy and what will prove to be here today and gone tomorrow. Further to this earlier post, I do recommend reading at least the Executive Summary of the recent ResPublica report, The Venture Society because while much of it can be disagreed with, it contains some ideas that do merit closer consideration. And much of it is provocative and interesting — like looking at something you know very well but through a lens with an unaccustomed perspective.

It argues that access to appropriate support, including and especially finance, is key to the social enterprise sector growing, but it proposes locating this ‘infrastructure’ in locally-based ‘community labs’, where support, networking and even investment decisions can respond more closely to community control and local decision-making. If this is an idea whose time has come then I see a scramble amongst support providers and others to reposition themselves as community labs.

While New Labour did a lot to advocate on behalf of the sector, ResPublica concludes that it did not do sufficient to shape and form the marketplace. The old lot (that’s clearly what the report means) saw themselves as the ‘driver’ and this relegated ‘grassroots social entrepreneurs’ to being merely ‘a sub-set of grantees, charities or the state itself’, a group ‘deserving of support through welfare’ but not in control of either the marketplace they sought to build nor the state support ostensibly there to help them flourish (p.21).

The report also argues that there has been a ‘cultural failure’ in understanding social enterprise — that social enterprise is ‘a spectrum, not a sector’, and that lumping it collectively under the broad designation of ‘third sector’ (now a verboten term in civil society circles) was misguided. It also argues that ‘more nuanced attempts’ to recognise the diversity of the sector while well-intentioned were ultimately confusing. But here the report arguably falls into the very trap it is describing by offering a ‘typology’ of social entrepreneurs which includes ‘social activist social entrepreneurs’, ‘political social entrepreneurs’, ‘social entrepreneurs working with trade unions’, and ‘public service media social entrepreneurs’ (p.23). Trips off the tongue, doesn’t it.

The report is also critical of the Social Enterprise Mark, claiming that it merely regulates ‘form’ rather than ‘function’, and critical too of New Labour’s strategy of ‘capitalising’ social enterprise through contracting with them for the delivery of public services. This, it says, has created a ‘bad market’ in which the small cannot compete. It also criticises the Community Interest Company legal form as being inadequately demanding in terms of eligibility, and unnecessarily bureaucratic for those subsequently wishing to exit that structure in favour of another.

But just when you think the report can safely be written off as primarily concerned with rubbishing everything the previous government did in its efforts to support social enterprise, it catches you short — for example, in arguing that there needs to be a greater recognition that early-stage social enterprises should be judged not by the public services they can deliver, but rather by their ability to reduce  the demand on those services.

You see, the report does have some genuinely insightful moments, but you have to take these along with pure Red Tory gobbledegook such as ‘Leveraging pro-social and pro-entrepreneurship norms’… For those whose tolerance is limited I do recommend reading at least the inset box on p.12 — ‘creating the infrastructure for grassroots social entrepreneurship: evolving the Venture Society in seven stages’. It would be great to hear views from anyone else who has delved into this report.

‘Can social enterprise grow by getting smaller?’

In this post I was considering whether government’s love affair with social enterprise — certainly as far as public service delivery is concerned — might be cooling.

Interestingly, this post by Chris Newis on the Footprints Associates website also re-evaluates what implications the new politics has for social enterprise — but does so from a genuinely provocative and counter-intuitive perspective. GIve it a read and see what you think.

The Venture Society — ‘red Tory’ think-tank demands radical new approach to social enterprise support

Social Enterprise mag has just covered the launch of the radical right think-tank ResPublica’s new report, The Venture Society. The report, part of an UnLtd project, calls for the ‘radicalisation’ of business support and the slashing of the bureaucracy associated with providing support.

The report calls  for a new approach to supporting “grassroots social entrepreneurs”, including local ‘community labs’ — based on Danish and US models — offering basic support and advice, and a network of social enterprise hubs capable of offering the basic infrastructure, support and funding so that significantly greater numbers of new-start enterprises can come forward.

Launching the report UnLtd’s Cliff Prior said, “Right now we are in the position where it is easier for a teenager to start a youth gang than a youth club – we must turn that round…”

Watch this space. I for one would relish a struggle for the heart and mind of social enterprise business support.

“Never waste the opportunity of a good crisis”

So says Rob Whiteman, chief exec of Barking & Dagenham Council and soon to be head of the Improvement & Development Agency for local government (IDeA).

With a new government, a new prime minister, and a harsh new economic climate — public spending cuts as great as 30% according to some estimates — Whiteman must be seeing opportunities everywhere.  And in fact he is. With local authorities facing financial meltdown, he has a vision for new community-led public services in which, he says, his favoured model is that of the National Trust — one of the very biggest national charities, with extraordinary public loyalty and trust and an army of over 60,000 volunteers. In the future, Whiteman says, “running things…is probably going to be more like the National Trust, where we rely on interested parties, volunteers, communities, rather than employing everybody”.

David Cameron has spoken of a “radical revolt against the statist approach” of Big Government. Whiteman’s armies of volunteers taking on the running of libraries, parks, swimming baths and other facilities would certainly seem to chime with Cameron’s ‘big society/small government’ message.

But how does this square with the kind of agenda for social enterprise growth and opportunities that we have all been pursuing over recent years? I am beginning to feel that the ambitions for social enterprise in public services that we all to some extent shared may turn out to be something of a pipe dream. These ambitions were predicated on the development of a new social marketplace, one where delivery would create additional social value. This assumed there would be sufficient money in the system to drive that market. But in a ‘more for less’ environment (Whiteman’s words) where real money is leaving the system faster than it can be counted, to be replaced by voluntary effort, those ambitions look doubtful.

None of this is to say that greater community involvement and voluntarism are bad things. In terms of cohesion and active citizenship, for instance, the social returns could be huge.

But what does it mean for social enterprise?  Will we see a new emphasis on ‘classical’ voluntary sector and volunteering issues, for instance, at the expense of social enterprise?

For me, the key issue that distinguishes between these two approaches — voluntary effort vs. social enterprise — is that of employment creation. The underpinning assumption of social enterprise is that it has the economic potential to create employment; the underpinning assumption of voluntarism is that it has the potential to get things done for free.

I think in coming months we can expect to see priorities for and attitudes towards social enterprise (and the wider third sector) significantly recast. And as a consequence I think we will find ourselves facing a new dilemma: how to balance government demands for ‘free work’ with the pressure to create employment.

Peter Hetherington has a typically excellent piece about Whiteman and his ideas in today’s Guardian Society.

Find It in Birmingham!

Did you know that Birmingham City Council, Birmingham working neighbourhoods fund and Be Birmingham are supporting the development of Finditinbirmingham, an ambitious new website to improve contacts, networking and business opportunities for all businesses right across the local economy?

The website is developed following a Sandwell model that has been extremely successful. Registration is free and you can post and respond to business opportunities, search for suppliers, and develop an online presence for your enterprise.

1400 businesses have already registered but Finditinbirmingham hopes to top the 5000 mark by the end of the year.

A sales, marketing and networking portal that works for all sectors of the economy — including social enterprises and third sector organisations — is a genuinely ambitious undertaking, but one to be applauded, especially in the present climate. Why not get registered and start making it work for your business?

‘Reform-weary’ public sceptical about new public service delivery methods, such as mutuals?

A new public services think-tank, the 2020 Public Services Trust is about to publish the results of consultation it has carried out regarding the use of social enterprise models in public service delivery.

2020 PST says that the feedback they have received indicates that taxpayers believe that any major changes in delivery should be tested in ‘non-core’ service areas before being widely adopted. The initial findings suggest that while people are interested in greater direct control of some public services, they are also inherently distrustful of ‘reform’, reflecting a significant loss of confidence in public policy-making. They are also suspicious and fear that reforms could become party-political or captured by interest groups. Interestingly, they also seem to favour ‘fairness’, ‘security’, ‘predictability’ and ‘uniformity’ over ‘choice’. The story is covered in Public Finance magazine and the 2020 PST website says that the full report will be published next month.

“Shop for Change” — a new campaign to build trade between third sector organisations and particularly social enterprises

For some time now ISE has been involved in carrying out market analysis amongst social enterprises and the wider third sector, looking in particular at emerging market opportunities. In the course of doing this, however, we’ve realised something else — just how little the sector inter-trades. We’ve been shocked that many organisations haven’t even thought about a buying policy i.e. buy on price and from the sector! What’s great news is that when we remind organisations to buy differently they do!

Another key issue to emerge is the huge gaps that exist in the market  — people want cleaning services, office stationery, IT support, grounds maintenance, window cleaners, stationers – in fact everything they need to purchase! They want to shop local, shop ethical, and support the sector — and so do we!

So over the coming months we are going to run a major campaign to promote the fact that the third sector can buy more of what it needs from third sector suppliers. We want to get across the message that how the third sector sources its goods and services can also help sustain the sector — and create social change!

There will be a number of different ways to get involved in the campaign and we’ll also be supporting enterprises that want to identify and enter new markets. Interested? You can sign up now and be part of a really exciting, practical campaign. Ring Amber Woodfull at ISE on 0121 771 1411 for more information.

‘Lucid, vigorous and brief’

Peter Couchman, chief exec of the Plunkett Foundation, has a blog called the Plunkett Perspective. In a recent post he writes that with all the political parties open to mutualisation in public services some kind of test will become necessary to help identify the areas in which mutual structures will work best. The three-point test he offers is lucid and simple, without a wasted word. We could all benefit by thinking about what he says whenever we put pen to paper to get across our own social enterprise messages.

Conversely, New Start magazine has just announced that the Institute of Economic Development has issued a ‘manifesto‘ calling on all the political parties not to cut investment in ‘vulnerable neighbourhoods’ — those which have previously been New Deal for Community areas, for example. These are fragile economies, the IED says, and reducing investment now will reverse any progress that has been made and send them back into decline.

So far so good. But the manifesto ends with the resounding call to “embed economic, environmental and social sustainability within the growth agenda”.

What in God’s name does that mean? It sounds a typically empty civil service mantra — the kind of thing that gets repeated until what little meaning it might have had is completely expunged.

The great  socialist historian Peter Fryer, (author of the classic Staying Power: The History of Black People in Britain) once wrote a tiny book called Lucid, Vigorous and Brief: Advice to New Writers. It’s sadly out of print but but secondhand copies can be found and I’ve been meaning to track one down for ages. Thanks to a nudge from the IED, I will. Just to be on the safe side.

Jericho Foundation host Cameron visit

Well, well, those canny folks at the Jericho Foundation have made tremendous PR capital out of hosting a visit today from David Cameron. Birmingham Mail.net has terrific coverage of the Tory leader’s visit and the custom-made Jericho T-short he was presented with.

New report from Social Investment Task Force

The Social Investment Task Force, which has advised the government on social investment issues over the past decade, has just issued a new report. Third Sector Online has fuller coverage.

A less restrictive tax relief regime is required in order to further develop social investment in the UK, the report says, and it also calls for the introduction of a UK Community Reinvestment Act, such as exists in the US. In the US this requires banks to reinvest in the deprived neighbourhoods in which they do business. Of course, this assumes that banks are doing business in deprived communities — an issue that the New Economics Foundation has campaigned extensively on. One of the key issues — both in the US and UK — has been ‘bank flight’ from the poorest communities.

As regards CDFIs — community development finance institutions which lend in order to to generate social and financial returns — the report notes that as of March 2009 investment in these relatively new community-based financial institutions is running at only just over a quarter of the £200m total the Task Force recommended should be the aim. CDFIs attract Community Interest Tax Relief and theoretically therefore ought to be an attractive investment proposition for both individual and institutional investors. Other recent research covered here has offered a ringing endorsement of the CDFI model. In fact, I understand from colleagues in the CDFI sector that there are huge regional differentials in demand for CDFI loans from amongst conventional businesses and social enterprises.

If any of our CDFI colleagues have further thoughts on this it would be good to hear them. For instance, are social enterprises inherently and uniformly ‘loan averse’? Or is it the case that at the moment some (health and social care enterprises, for example) are able to access ‘free’ money, such as investment from the Dept of Health Social Enterprise Investment Fund, and therefore don’t require debt finance? And if this is the case, is it a good or bad thing? What’s good for the enterprise I can see may not necessarily be good for the CDFI….

Labour manifesto pledges ‘social enterprise hubs in every community’

Labour’s manifesto may not offer any new policies on the third sector, as Third Sector Online notes today, but it does pledge:

  • More support for third sector organisations bidding for public service contracts
  • Commitment to developing the long-trailed Social Investment Bank
  • An extension of the ‘right to request’ legislation currently operating in the health sector (under which workers can request that a service or department business case be properly assessed for conversion to social enterprise delivery)
  • A new commitment to ‘mutualism’, with initiatives such as ‘community shares’ used to enable the conversion of local assets — shops, pubs, football clubs and children’s centres — being converted to community-owned co-ops

Perhaps most interestingly — because there is no explanation about what this might in practise — the manifesto also says that New Labour will support the formation of ‘social enterprise Hubs’ in every community as a means of ensuring that more social enterprises ‘get off the ground’.

Scotland rethinks position on separate Social Enterprise Mark

Further to this post, Third Sector Online has an interesting item today which indicates that following negative feedback from the Scottish Social Enterprise Coalition, SENSCOT, the network for social entrepreneurs in Scotland, is rethinking its position on the Social Enterprise Mark.

Previously SENSCOT had decided not to support extension of the new ‘identifier’ Mark to Scotland, claiming that there had been political interference and that the qualifying criteria for the Mark were too lax. It wanted to develop plans for a separate Scottish version of the Mark. But the Scottish Social Enterprise Coalition has said such a tactic could be reputationally dangerous, leading to the sector in Scotland being seen as “insular and parochial, instead of enterprising and outward-looking”. Read the full story here.

When definitions obscure rather than reveal…

Further to this post, the London Rebuilding Society blog has an interesting entry by Bruce Wood, its head of enterprise services, in which he explains why all-inclusive definitions of social enterprise obscure rather than reveal what the sector has to offer. Well worth a read.

“No sh*t, Sherlock”

I was talking to someone recently about the prevalence of what they called “No sh*t, Sherlock” reports — costly reports that reach blindingly self-evident conclusions. Two new reports on ‘infrastructure support’ for the third sector seem to fall squarely into this category.

Third Sector Online has just carried a story about a new National Audit Office report, Building the Capacity of the Third Sector, and a Capacitybuilders report, Sustainable Models of Support. The NAO report, which evaluates the effectiveness of the Capacitybuilders/ChangeUP programme, concludes that insufficient thought was given to how infrastructure bodies in receipt of Capacitybuilders’ “investment” — such as Councils for Voluntary Service — would become genuinely self-sustaining in the longer term. Capacitybuilders’ own survey — based on detailed examination of nine infrastructure organisations also seems to conclude that this may be an unrealistic goal.

Capacitybuilders found that none of the providers surveyed “could describe the future of their organisations or the services they provided as 100 per cent secured beyond a horizon of two or three years”. Well, no sh*t, Sherlock. How could any other conclusion realistically make sense? That is the current reality of life in the third sector — and has been for years.

When it comes to providing real, practical, hands-on support and development — services, incidentally, which are typically free at the point of delivery — it is difficult to see how anyone with the slightest experience of the third sector could assume that this would ever offer a viable income-generating business model. One might argue that it isn’t meant to. The point of such services is to assist some of the poorest community-based organisations.

Of course, one might say that none of this would be the case if voluntary and community organisations paid for the support and development they need. And, whether openly spoken or not, it is clear that an ability to pay has been the underpinning principle guiding much of the government’s thinking about not just infrastructure support but also specialist business support such as that provided for social enterprise.

But the simple reality is that most don’t and most can’t. Those that can afford to pay have probably already voted with their feet and source the services they require from the provider/s of choice. That’s fine for those that can afford it. But for those that can’t — for the smaller or less professionalised or more volunteer-dependent organisations, those that report after report says are the ‘lifeblood of civic society’, the ‘glue that helps hold neighbourhoods together’, and all the other platitudes that the all the main political parties have been trotting out for a while now — one struggles to see how they can be helped to fulfil that role as effectively as possible unless someone is prepared to spend money on their support.

The most annoying thing about this situation is less the outright idiocy of policy-makers and more their hypocrisy — on the one hand, droning on about civil society and the need for active citizenship and voluntary involvement; on the other, the clear belief that ultimately only a market relationship matters, a sustainable business model….

Why is it that those who know least about markets  always think that market solutions are the answer to everything?

New research offers ‘ringing endorsement’ of CDFIs

New research by GHK Consulting for the Dept of Business, Innovation & Skills and the Office of the Third Sector offers a ‘ringing endorsement’ of the CDFI sector, says Bernie Morgan, CEO of the sector’s trade association. New Start covers the story here.

Community development finance institutions — a sector that in its present form is barely twelve or thirteen years old in the UK, it should be remembered — more than triple every pound they invest in local areas, according to the report. Nonetheless, like much of the social enterprise sector, the report also concludes that they remain hampered by a “lack of comprehensive data and agreed reporting frameworks”.

Our own ART is a prominent case study in the report (on p.181, which gives you a clue that it isn’t a short report….).

In late-2009 the sector’s active loan portfolio comprised around 6,500 loans — and totalled just over half of the £600m loan capital available to the sector.

Many ‘amazing’ social enterprises too small to succeed in major procurements, says NHS director of systems management

Further to this and an earlier post, Bob Ricketts, director of system management and new enterprise at DH, has stepped in to try and clear up the “misunderstanding” caused by Andy Burnham’s “NHS is the preferred provider” remarks. The story is here.

Ricketts says that social enterprises are one option in “open competition”. But interestingly he also goes on to say that “partnership”s — whether social enterprise and NHS, or NHS and commercial providers — are likely to “manage risk” better. He also says that many of the “amazing” social enterprises he has seen are too small and would need help to scale-up if they were to have a “real chance in succeeding major procurements”. And “I don’t have a solution to that,” he concludes.

Catching up… One of first social enterprises to receive investment from DH fund goes bust

I managed to miss this story first time round… Secure Healthcare, a social enterprise providing healthcare for prisoners went bust in September of last year.

Secure had a contract worth more than £5m a year with Wandsworth prison in London but went bust with debts of over £1m, forcing NHS managers to step in to protect the jobs of 70 frontline employees and ensure that the jail’s 1,600 prisoners continued to receive medical services.

According to sources quoted in the piece in the Guardian, Secure faced a ‘perfect storm’: a fixed-price contract that couldn’t be renegotiated despite spiralling costs; DH investment that was primarily restricted to capital expenditure; Futurebuilders investment ring-fenced for the development of new business; and banks’ reluctance during the credit crunch to negotiate a rescue package.

It may be old news but there are  important lessons here for social enterprises generally and especially those in public service delivery.