Thought Leadership

As a social enterprise, mission is the heart of everything we do - and as part of the Future Economy Alliance we’re campaigning to make this way of working the national norm. Inequalities are rising, divisions are deepening, and the climate crisis is growing. Trains are cancelled, rivers are polluted, people are having to choose between heating and eating – while the companies behind these vital services record huge profits. Our local councils are going bankrupt, our high streets are empty, and our NHS is on its knees. Nothing works anymore. At the heart of this is a broken system. ‘Business as usual’ isn’t working – so let’s change it. Let’s unleash the power of business to benefit people and planet. Let’s build a stronger, fairer, greener economy where all of society profits. Let’s fix our future. We’ve joined the Future Economy Alliance to highlight the importance of working for a purpose beyond profit, and make this mission-led approach the national norm. An estimated four million of us work in social enterprises and other mission-led organisations across the UK, and we’re living proof that business can be a force for good; we just need those in power to unleash our potential. Ahead of the General Election, we’re ready to guide our next government in the bold reforms needed to fix our economy – and with your support, we can put these issues at the top of the political agenda. We’re crowdfunding to create a unique campaign stunt that will really grab our leaders’ attention. It could be anything from billboards all over the UK to skywriting above Parliament or taking over Westminster; we’re planning the best possible tactics to bring our campaign to life, and anything you can donate will help make our message heard in the corridors of power. Will you help us? Please support our campaign We're gearing up for an exciting campaign stunt to grab the attention of our leaders and cut through the political noise with a bold message of change and hope: that we can build a new economy where all of society profits. We’re working with a creative agency to really bring our campaign to life, and anything you can donate will help make our message heard in the corridors of power. To build an economy that really works for our society, we need support from across that society. Every donation is a step towards a stronger, fairer, greener future for all of us. Join the Future Economy Alliance, join the movement, and let’s fix our future.

Now that the UK has slipped into an official recession, and with living standards stagnating, this week's Spring Budget will likely look to stimulate private sector activity. This is an opportunity to re-imagine how policy can support business, and to encourage the growth of more responsible and diverse models of business whose aspirations are aligned to the wider economy. The distinct challenges faced, the pressures these exert and the response of the business to succeed can vary enormously across the business landscape. This is especially true for social enterprise models, which already run against the grain of what is expected of a business by prioritising social and environmental missions alongside the need to make profit. However, much national policy remains uniform, and therefore unable to meet the needs of different business models. Efforts to support business growth in recent years have focused on a mixture of tax cuts, capital subsidies and rapidly designed support packages to address external shocks like Covid-19 and the cost of living crisis. Despite their growing prominence, social enterprises are often overlooked by government. For example, the flagship policy of full expensing (the scheme that allows capital investment to be deducted from tax bills) was hailed as the biggest cut to business tax in modern times, and critical for encouraging business investment. However, new Social Enterprise UK research has found that almost three-quarters of social enterprises have failed to benefit. It has been hinted that further tax cuts will be announced during the Spring Budget - but this is an opportunity to adopt a fresh approach. At present, policy is proving ineffective at supporting the growth of more diverse business models. Various policy levers are just waiting to be pulled by government, including: expanding green investment funds to help support the creation and growth of environmental enterprises, while facilitating the net-zero transition among the wider business community. reforming the tax code to incentivise private investment into social enterprises and other community businesses. implementing a Community Right to Buy Act that allows local authorities and the communities they serve to develop local assets that can stimulate economic activity and generate revenue. We cannot continue with business as usual. Social enterprises have proven resilient in the face of economic hardship, but they are failing to achieve their potential. Policy needs to be adapted to recognise that different forms of business not only exist but need specialist support. Recognition of this is the first step towards the creation of a more diverse, vibrant and impactful business community.

The latest Barometer in our Social Enterprise Knowledge Centre depicts a sector broadly optimistic for the year ahead, persevering in the face of economic uncertainty despite gaps in local and national government support. Every quarter we publish new findings from our Social Enterprise Advisory Panel to give a snapshot of key sector issues and trends across the UK. This latest survey explored social enterprises’ overall expectations for 2024, from reserves and profit making to staff numbers, as well as the potential impact of ongoing economic uncertainty amid recession headlines and the cost of living crisis. Social enterprise business expectations for the year are broadly positive; 64% expect turnover and staff numbers to either grow or remain the same, compared to just 50% of small businesses as a whole, and the vast majority expect demand for their goods and services to rise. However, many social enterprises are experiencing uncertainty, with local and central government income highlighted as a significant factor affecting their growth expectations. Many are unaware of and ineligible for support provisions like the Community Organisation Cost of Living Fund or VCSE Energy Efficiency Fund, and around half say their local authority offers no support for their business. We know that social enterprise is more resilient than other forms of business, as demonstrated in recent economic crises – but they also contribute more to society, so they need to thrive, not just survive. We’re calling for targeted government support to help social enterprises develop and expand, generating economic growth and shared prosperity. Creating an environment for social enterprise to thrive requires appropriate policy development. As part of our work in the Future Economy Alliance, we’re campaigning for a dedicated minister to lead bold reform and join up relevant policy areas, so the government can better support social enterprises and unlock our full potential. Click here to read the full report

The social enterprise community was shocked and deeply saddened to hear of the death of Dai Powell OBE, who passed away earlier this month. Dai was a true social enterprise pioneer and is probably best known for his time heading up HCT Group as chief executive, transforming it from a small community transport provider to a national social enterprise running bus routes and accessible transport services across the country. A proud Welshman and former coal miner, Dai joined HCT as a bus cleaner and worked his way up through the business, which grew more than a hundredfold over his 29 years there. Dai helped to show how a social enterprise can deliver public services at scale without losing sight of the business’ mission to support the community. The revenue from HCT’s commercial routes was used to fund transport services for the elderly and those suffering from social isolation, as well as to provide training and work opportunities for the long-term unemployed and people at the margins of our society. Dai was heavily involved in our work at Social Enterprise UK as a passionate advocate for the social enterprise movement. He played an active and important role on our board for six years and, up until his death, was actively involved in our governance. He was the Chair of the Disabled Persons Transport Advisory Committee from 2009-2014 and also chaired the Community Transport Association. In 2006, he was awarded an OBE for services to disabled people. Commenting on Dai’s huge contribution to our sector, our chief executive Peter Holbrook said: “Dai was someone who was deeply invested in social enterprise, Social Enterprise UK and growing our movement into a global force. He exemplified the values of social enterprise throughout his long career in the sector. He was revered and will be remembered both as an icon and founding father of modern social enterprise. He will be celebrated, remembered and missed. He was a real friend to so many people and respected hugely by those he met. He was joyful, insightful, easy and witty company.” Our thoughts are with Kate Markey, Dai’s partner, who we know will be suffering terribly in the wake of Dai’s sudden and premature death. We are forever grateful to Dai for the contribution and inspiration he gave to our movement over so many years.

A leading social investor, Key Fund, is actively seeking to support social entrepreneurs from ethnic minorities. Key Fund, which operates across the North and the Midlands, offers investment (loans and grants) between £5,000-£300,000 to social enterprises in some of the most deprived communities. The move is in response to ongoing research from the Black United Representation Network (BURN) that shows only a fraction of ethnic minority businesses in Manchester are accessing and securing investment. The groundbreaking study concluded productivity could be boosted by almost £4bn in the Manchester region alone, if steps were taken to dismantle the barriers Black and Asian business leaders face. One million of the six million businesses in the UK are minority owned, yet people from minority groups face greater exclusion from the financial system, according to the Minority Businesses Matter Report*. Key Fund began in South Yorkshire in 1999 in response to the collapse of the coal and steel industries. A social enterprise itself, it was founded by like-minded social entrepreneurs and philanthropists to breathe life back into its communities, by supporting new enterprise. Matt Smith, CEO of Key Fund, said: “Key Fund has a long history of reaching the most disadvantaged places, but we’re aware the most marginalised groups in these places have traditionally been unable to access finance. Our mission to create successful communities can’t work if there are people still left behind. There is a profound need, and we have to step up to meet it.” Key Fund supports social or community organisations who work to create positive social or environmental impact, as well as profit. To date, Key Fund has awarded £49.4m in loans and £23.3m in grants, creating or sustaining 3,000 businesses, and over 4,000 jobs, with a total £370m impact. Matt added: “At Key Fund, we pride ourselves in getting the right money, into the right hands, at the right time. We need to do more to address shocking discrimination. If you’re a social entrepreneur who has been turned down by your bank, or struggled with cultural or language barriers, our door is open. Please talk to us.” Barriers include discrimination, and the lack of customised business and application support, delivered by diverse providers. Dr Marilyn Comrie OBE, an award-winning social entrepreneur and founder of BURN, said: “Understanding the specific barriers that ethnic minorities face is a crucial first step in creating solutions that can overcome long-standing racial inequities. We’re thrilled Key Fund as leaders in the social investment sector, has recognised this issue, and look forward to working with them to help our economy be one where all can thrive.” Key Fund’s commitment to inclusivity will feature a series of workshops aimed at ethnic minority social entrepreneurs, offering translation services as required. It is actively championing its existing BAME clients in the hope to inspire others. Key Fund investees in the last year include Highway Hope in Manchester, which has grown into a social enterprise hub, with discount food stores, a beauty salon for ethnic minorities, IT hub, re-use furniture store and educational programmes. Key Fund invested £19,200 in loan and £5,800 grant in 2023 to help its CEO, Esther Oludipe, develop its community café. It also invested in Toranj Tuition to allow them to purchase their own building and become more sustainable. Established by three Iranian nationals in Hull twenty years ago, it supports qualified migrants to re-enter their professions in the UK, and runs educational programmes for children from deprived backgrounds. Other recent investees include Newcastle’s Africawad, founded by asylum seeker Afi Dometi, which supports over 20 women into education or employment in the UK each year, and saves 300,000 kilos of unwanted clothes from landfill thekeyfund.co.uk * MSDUK (minoritybusinessesmatter.org) To access the BURN Barriers to Inclusion report for Greater Manchester go to: BarierstoInclusionReportJanuary2024.pdf - Google Drive

NOAH Enterprise is a charity supporting people struggling against homelessness and exclusion, with services across Bedfordshire working to find and help people with nowhere else to turn. Founded in the late 1980s by a nun, Sister Eileen O’Mahoney, the charity initially operated out of a block of condemned flats but has since grown significantly in scale and impact. NOAH now includes an outreach service to help people off the street, work experience and skills training to get people into employment, and social enterprise shops to raise money for the cause. Its welfare centre also offers warm meals, medical and dental care, accommodation support, clothing and laundry facilities, immigration advice and much more. In the last year, NOAH has supported 1,038 people at the welfare centre and 466 people on the streets, as well as helping 284 people into accommodation and 20 people into employment. How does NOAH work with government departments? NOAH’s primary work with central government departments is with the Department for Levelling Up, Housing and Communities (DLUHC) for which it delivers street outreach services under the Government’s Rough Sleeping Initiative. Winning this contract has allowed NOAH to expand this element of its work into central Bedfordshire and central Luton. NOAH has also worked on contracts with the Home Office to provide EUSS advice and, outside of central government commissioned services, is also working on a pioneering hospital discharge project with Bedfordshire Hospitals NHS Foundation Trust. How did NOAH succeed in winning the contract? Paul Prosser, Head of Welfare Services at NOAH, believes that core to the charity winning this DLUHC contract was its proven track record of transforming lives. The way NOAH operates means that they can “build trust, get to know people and work with them to create bespoke solutions”. Being an independent provider also has its advantages, as people are more likely to seek support from organisations they have a personal relationship with than bodies like the local council who they may have had a negative experience with. NOAH’s broader holistic support offer was another contributing factor in its DLUHC bid success, as people helped through the street outreach programme can also access the wider services provided by its Welfare Centre. Whilst the centre is not statutorily funded, the ability to co-locate services around a central hub adds value to the contract. When the service was put out to tender, NOAH’s application included a supporting letter from the local authority highlighting the charity’s expertise. What were the benefits to DLUHC of working with you? NOAH brings additional value to the contract through its commitment to impact and its proximity to the frontline. The charity’s years of being embedded in the local area mean that the community really believes in its work, meaning that the charity can work with volunteers who are passionate about delivering on its mission whilst also keeping down costs. Paul believes that commissioners now have a “greater risk appetite for embedding lived experience”, a core tenet of many VCSEs, which can be lacking in local authorities and private sector providers, who are driven by minimising costs and maximising shareholder value. What tips do you have for other social enterprises and charities who want to work with central government? A key tip from NOAH for other VCSEs is to use your existing knowledge, and the strong relationships you have built with the people you are set up to support, which is often a key differentiating factor between VCSEs and other providers. Paul also advised to not be afraid of proposing innovative solutions to funders, stating that: “VCSEs are in a strong place because they know what people are saying to them and they know what’s needed. They can be brave and test concepts with people and can go back to statutory funders and suggest new ideas and pilots. Sometimes there’s a willingness to try to new things.” While acknowledging there may be a degree of guesswork in establishing whether a statutory body is willing to test and trial new things, Paul’s experience with NOAH is that “where pilot projects have been co-produced with people who are experts by experience, that carries a lot of weight”. Based on a conversation with Paul Prosser, Head of Welfare Services at NOAH Enterprises noahenterprise.org

NOAH Enterprise is a charity supporting people struggling against homelessness and exclusion, with services across Bedfordshire working to find and help people with nowhere else to turn. Founded in the late 1980s by a nun, Sister Eileen O’Mahoney, the charity initially operated out of a block of condemned flats but has since grown significantly in scale and impact. NOAH now includes an outreach service to help people off the street, work experience and skills training to get people into employment, and social enterprise shops to raise money for the cause. Its welfare centre also offers warm meals, medical and dental care, accommodation support, clothing and laundry facilities, immigration advice and much more. In the last year, NOAH has supported 1,038 people at the welfare centre and 466 people on the streets, as well as helping 284 people into accommodation and 20 people into employment. How does NOAH work with government departments? NOAH’s primary work with central government departments is with the Department for Levelling Up, Housing and Communities (DLUHC) for which it delivers street outreach services under the Government’s Rough Sleeping Initiative. Winning this contract has allowed NOAH to expand this element of its work into central Bedfordshire and central Luton. NOAH has also worked on contracts with the Home Office to provide EUSS advice and, outside of central government commissioned services, is also working on a pioneering hospital discharge project with Bedfordshire Hospitals NHS Foundation Trust. How did NOAH succeed in winning the contract? Paul Prosser, Head of Welfare Services at NOAH, believes that core to the charity winning this DLUHC contract was its proven track record of transforming lives. The way NOAH operates means that they can “build trust, get to know people and work with them to create bespoke solutions”. Being an independent provider also has its advantages, as people are more likely to seek support from organisations they have a personal relationship with than bodies like the local council who they may have had a negative experience with. NOAH’s broader holistic support offer was another contributing factor in its DLUHC bid success, as people helped through the street outreach programme can also access the wider services provided by its Welfare Centre. Whilst the centre is not statutorily funded, the ability to co-locate services around a central hub adds value to the contract. When the service was put out to tender, NOAH’s application included a supporting letter from the local authority highlighting the charity’s expertise. What were the benefits to DLUHC of working with you? NOAH brings additional value to the contract through its commitment to impact and its proximity to the frontline. The charity’s years of being embedded in the local area mean that the community really believes in its work, meaning that the charity can work with volunteers who are passionate about delivering on its mission whilst also keeping down costs. Paul believes that commissioners now have a “greater risk appetite for embedding lived experience”, a core tenet of many VCSEs, which can be lacking in local authorities and private sector providers, who are driven by minimising costs and maximising shareholder value. What were the main challenges in applying for government contracts? Although NOAH’s experience applying for the DLUHC contract was a positive one, Paul states that when applying for government contracts there can generally be difficulties in understanding what is being prioritised. He highlighted the tension between showing innovation as a provider without scaring the commissioner, stating that “it can be a little unclear as to how much innovation to try compared to how much risk the funder is trying to take”. Other challenges include “trying to clarify why we are the most appropriate provider”, as well as complicated portals adding delay and difficulty to the application process, with VCSEs sometimes having to pay external fundraising consultants for support. Based on a conversation with Paul Prosser, Head of Welfare Services at NOAH Enterprises noahenterprise.org

The Nelson Trust is a charity set up to support people with complex needs ranging from trauma and addiction to experiences with the criminal justice system. It has provided residential addiction rehabilitation support since 1985 - but in the mid-2000s it emerged that women in treatment centres weren’t having as good outcomes as men, leading the charity to look into their specific needs and establish a new trauma-informed gender responsive service with an all-female staff team. At the same time, a review into the female prison estate by Baroness Corston[1] found that women should be rehabilitated in the community as they tended to be serving short sentences for non-violent crimes. This enabled the Nelson Trust to win funding that led to it now running seven women’s centres across the South West and Wales. How does the Nelson Trust work with central government departments? On opening the first women’s centre, most of the Trust’s income was derived through grants, but in recent years the charity has moved into public sector tendering. The main central government department the Nelson Trust works with is the Ministry of Justice (MoJ) and, through them, His Majesty’s Prison and Probation Service. The charity has also received money from the Home Office. What kind of work does the charity do with central government? In 2022, the Nelson Trust led a partnership bid with nine other organisations to work on a prison leavers pilot for a contract created by the MoJ, based at Eastwood Park in South Gloucestershire. There were no specific delivery terms, other than improving outcomes for prison leavers so the charity could use its creativity and years of experience to create an innovative way of meeting the contract. It saw that services to support women both in prison and on release were fragmented; for example, – women from Wales serving time at Eastwood Park receive NHS England care but aren’t entitled to some ‘through the gate’ services (such as ‘reconnect’ which supports prison leavers access health care services) that they would be if they lived in England, as justice is centrally funded but health is devolved across the Home Nations. It also noticed a lack of integration meant women often had to share trauma-inducing stories repeatedly to different organisations, and so wanted to join up the system. As Christina Line, Chief Operating Officer at the Nelson Trust, states: “One woman told us she’d been asked if she was pregnant nine times through her induction into the prison. We wanted to co-ordinate a package of support so that a woman has one lead keyworker, has to tell her story once, has one assessment, we all work from one case management system and we broker in the other support services as she needs them.” The Nelson Trust led the work in partnership with other organisations including housing providers, organisations supporting women to re-unite and maintain ties with their children, a substance misuse specialist, and a domestic violence support provider. Prison officers also worked to bring women into the centre and aid systemic work within the prison for internal processes to be trauma-informed. Central to the whole project was one case management system, which all organisations could log into, preventing women having to tell their stories over and over again. This new system was funded as a pilot programme for 15 months and is currently being externally evaluated. Initial data from the project is showing that, as a result of this intervention, the rates of women going back into prison have significantly reduced. What were the benefits to the MoJ of delivering this contract? Christina Line believes that a core benefit of working with the Nelson Trust is the savings that such an approach to criminal justice and the wider system brings to the public purse. It costs the government around £1,500[2] to rehabilitate a woman through the Nelson Trust, but the cost of sending someone to prison is around £46,696 a year.[3] The way the charity is set up means that “we don’t close the door on women, and our support will continue long after the MoJ have finished paying”. The holistic help provided - from supporting people out of addiction and disadvantage to support finding work - also means that they are reducing costs in other ways, such as welfare benefits or ambulance and police call-outs. Christina says the voluntary, community and social enterprise sector (VCSE) is markedly different from larger profit-driven service providers in its dedication to “get on with the job”, explaining that “people work because they want to make an impact”. What are the main challenges in applying for government contracts? One of the main challenges identified by the Nelson Trust is the lack of capacity faced by many VCSEs, with some not having a dedicated business development team. This often means a lack of resources holds organisations back, even though they may be capable of effectively delivering contracts. There can also be challenges in the complexity of certain contracts, where “the level of detail required isn’t always commensurate with the financial contract”. Christina pointed out that contracts for women’s prison services worth around £100,000 can require the same level of detail as men’s prison services worth millions. Unless contracts are simpler, Christina believes that the whole contracting process can “tip the scales in favour of larger organisations”. Based on a conversation with Christina Line, Chief Operating Officer at the Nelson Trust nelsontrust.com [1] https://www.nicco.org.uk/directory-of-research/the-corston-report [2] What the Nelson Trust are paid on their contract annually [3] https://prisonreformtrust.org.uk/wp-content/uploads/2023/06/prison_the_facts_2023.pdf