Thought Leadership

More diversity at leadership level could mean more money for the economy. Our latest report found that social enterprises are playing their part – particularly those led by women.  Whatever your views on the diversity of Britain's workforce, there's a good reason to consider the findings from our last State of Social Enterprise report: it's been estimated that better gender and ethnic diversity in executive teams would be good for the economy.  For example, the business charity Business in the Community has worked out that race equality could boost the UK economy by £24 billion per year, which works out at an incredible £481 million a week. For anyone interested in economic growth like this, our deep dive into diversity amongst social enterprises should make for interesting reading.   Beyond the bottom line, more diversity can help stimulate a culture that draws on the experiences, perspectives and knowledge of different groups. Embracing different views and nurturing talent, while combatting biases and prejudices that can hold a business back, can contribute to a better business culture and enhance performance. When we interviewed more than 700 social entrepreneurs, their answers around the diversity of their businesses were incredibly revealing.  Social enterprises lead the way when it comes to representation on staff and leadership teams. More social enterprises are led by women and people from ethnic minority backgrounds than is the case for the wider business community. More than half of social enterprises are run by women (59%) and they’re making more than double the money of their male counterparts; average reported profits among women-led social enterprises are £160,000 compared to £70,000 by those led by men. For comparison, in the wider business community, just 18% of SMEs are run by women.   Another result that leaped out from the report is that one in every 20 businesses run by someone from an ethnic minority background in the UK is a social enterprise. Social enterprise leadership is closer to representing the national ethnicity makeup of the UK than the rest of the business world. The UK’s last census (in 2021) found that 18% of the population is from an ethnic minority background and our research found that 13% of social enterprise leaders identify as being so. In the wider business community, just 6% of leaders are from an ethnic minority background.  Social enterprises strive to address different social challenges and lead the way when it comes to representation on staff and leadership teams. Further, a substantial proportion actively tackle issues of gender and racial discrimination as their core social mission.  While there are several reasons to be optimistic about the contribution social enterprises make to a more diverse and representative workforce, challenges remain. As with all businesses led by women and people from minoritised groups, there remain concerns that certain social enterprises can face persistent barriers that hold their business back. The Adebowale Commission on Social Investment, for example, found that Black-led social enterprises faced a disproportionate struggle to access and secure financial support from social investment firms.  Black female-led social enterprises are significantly less likely to raise finance sought than the average, and female-led social enterprises are less confident that their organisations have the required skills to secure finance and investment.  It is critical that we improve our understanding of the challenges experienced by different groups within the social enterprise community. Through improving diversity and representation across social enterprise, economic gains can be made, and the ability of social enterprises to recognise and meet the needs of the communities they serve can be strengthened.   This report explores data collected by the Social Enterprise Knowledge Centre – in particular the State of Social Enterprise, the largest UK survey of social enterprises. It maps the demographic profile of social enterprises and explores differences in performance and experiences for women-led and ethnic minority-led businesses.  We’d really love your help with the next State of Social Enterprise, which we’ll be compiling this year. In February we’ll be launching our biannual survey, which is open to all social enterprises. It will give us more valuable data to help showcase the difference social enterprises are making. If you’d like us to send you the survey, let us know here.  

Towards mission-driven procurement systems Our Social Value Leaders’ Summit on Wednesday 26 March in central London, brings together senior leaders and decision-makers from across the public, private and social enterprise sectors to discuss, debate and shape the future of social value. With the Procurement Act now live and the new National Procurement Statement (NPPS) giving social value an important role in the contracting process, this year will see the biggest changes to how government spends its money in a generation. The NPPS calls on public bodies to “maximise procurement spend with VCSEs (voluntary, community and social enterprise organisations)” and the Summit will look in depth at how these organisations can drive growth and deliver transformative change on a local and national level. Programme and speakers Our keynote speakers have both been instrumental in the passing of the Act. Georgia Gould MP, Parliamentary Secretary to the Cabinet Office, will be delivering an interactive session with the opportunity to ask questions and Gareth Rhys-Williams the Chair of National Highways and former UK Government Chief Commercial Officer will set out a vision of how procurement can deliver a fairer, greener and stronger economy.  There'll also be mix of insightful panel discussions featuring cross-sector speakers focusing on: The role of VCSEs in delivering mission-driven procurement How social value can deliver economic growth Improving public services Tackling regional inequalities In between discussions, there will be interactive roundtables looking in more depth at what mission-driven procurement means and whether the new procurement landscape represents an evolution of the established system or a revolution. View the full programme The Summit is an invite-only event for leaders in the social value space. If you’re looking to increase the positive social and environmental impact of the goods and services you procure, or are a VCSE with a track record of social value delivery you can express your interest in attending by filling out this form. The Summit forms part of our Social Value 2032 programme and is supported by our Partners: Anthony Collins, Jacobs and PwC. This ambitious project looks at how we can embed social value across all public sector procurement and influence the spending of the UK’s largest companies. If you are interested to know more about the partnership or Summit sponsorship please contact jennifer.exon@socialenterprise.org.uk

Katharine Sutton is Chief Executive of Aspire Community Works, a social enterprise provider of public services whose #BetterForUs campaign advocates a wellbeing approach to the economy. The vast amounts of public funds allocated through procurement can shape community well-being, support fair employment and strengthen local economies – yet all too often, this potentially transformative spending is reduced to a technical purchasing process. At best, the cheapest price is prioritised over the quality of public services, but at worst it can mean large-scale corruption and the collapse of get-rich-quick companies such as Carillion. A new mission-led government, a new Procurement Act (due to take effect in February 2025) and new National Procurement Policy Statements (in England and Wales) provide opportunity for bold reform to ensure the system is people-led rather than profit-led. This blog explores various practical ways in which public procurement can be made to work for the public, not against it. Make fair wages and good working conditions the standard Every public contract should include a commitment to paying the Real Living Wage. Workers deserve fair compensation that enables them to support themselves and their families. Setting fair wages as a standard can reduce poverty, lessening reliance on health and welfare services. Fair pay fosters health, stability and productivity, creating a more resilient and engaged society. All public contracts should also promote decent working conditions through the inclusion of Good Work standards certified by independent bodies. This will ensure workers have security, dignity and opportunities to develop, ultimately supporting the well-being of employees and wider communities. This is particularly important in sectors with low pay and high turnover to improve staff satisfaction and retention,  in turn generating higher quality services that the race to the bottom simply cannot sustain. Support local economies with targeted investment At least 1% of public procurement budgets should be allocated to organisations committed to supporting people facing barriers and disadvantage in the labour market. Directing procurement funds towards these “Good Works” organisations could help stimulate alternate local economies, create sustainable employment for individuals who might otherwise be excluded from the workforce, and tackle existing labour shortages. Aspire estimates that such an investment could generate over £3.9 billion for local economies, strengthening communities and fostering inclusion. Align procurement with wider values and goals Public procurement can and should be aligned with the UN’s Sustainable Development Goals (SDGs), leveraging each contract as an opportunity to support sustainable development and addressing issues such as inequality, inclusive growth and climate change. We consider these to be the golden thread linking procurement to community, domestic, international and corporate goals. While social value is an increasingly common part of procurement, we recommend a shift towards public value - linked to the SDGs - with the purpose of maximising public benefit. Social value often becomes a checklist, narrowly focused on short-term results, whereas public value encompasses a commitment to addressing long-term issues like inequality and resilience as well as mission-led public policy. Reframing procurement with a public value approach would enable public funds to support sustainable, community-centred, people-led goals. Such a shift would require contractors to align their objectives with government priorities, creating a more cohesive and impactful procurement strategy both at a national and local level. Put the public back in public procurement We must move beyond just listening to really actively involving local communities in the commissioning and procurement process, using the voice of lived experience to co-create services that are relevant and resonate with the people who will be relying on them. Investing in people-led procurement is a crucial part of investing for our future. Inclusive growth may be a buzzword for those who have wealth – but for those of us without, it is a necessity. As businesses and investors look for models of sustainable growth, the principles of social procurement align with a growing demand for economic resilience and accountability. This is an opportunity for the UK to lead, not just in fiscal responsibility but in responsible, impact-driven investment of public funds. At a time when economic value and social value need not be mutually exclusive, public procurement could become a cornerstone of the UK’s economic renewal. Over the next couple of months, our new government has the opportunity to direct public procurement to work for the public benefit and not against it. Will it seize the opportunity? We can only hope so.

Groundwork is a federation of 15 charitable organisations operating across the UK. It runs programmes and activities to help people improve their prospects, working with communities facing multiple challenges, in places that lack social infrastructure and economic opportunities. It combines environmental and social impact, building the green economy while supporting communities to connect with nature and adapt to the climate crisis. From creating green jobs to supporting people with energy bills and retrofitting homes, it works to build a fairer and greener future in which people, places and nature can thrive. Working with government departments Groundwork UK (the national body of the federation) distributes grant funding for the UK Government, acting as an intermediary to make sure public money is invested in communities at a grassroots level. This involves bidding for contracts with central government departments and acting as an outsourced intermediary provider of grant management services. It’s worked with the Ministry of Housing, Communities and Local Government to get groups  such as parish councils involved in local planning, and with the Home Office to support charities tackling extremism. It’s also been contracted by the Department for Culture, Media and Sport to run the Voluntary Community and Social Enterprise (VCSE) Energy Efficiency Scheme - a £25m programme, largely distributed through grants. So far it has funded 1,100 organisations to carry out energy assessments to help them improve the efficiency of their buildings. The benefits of working with a VCSE organisation Groundwork UK’s position of having national grant management capability but also being able to leverage connections through its federation members allows it to promote grant programmes at a local level, supporting organisations to navigate through complexity and access funding they may not have been aware of. Chief executive Graham Duxbury states that government outsourcing this kind of work aims to ensure grants are accessible to smaller, local organisations that are often volunteer-run. He said: “Having knowledge of that sector and that space is hugely important in terms of designing the service. You’ve got to be aware of capacity restraints and limitations, you’ve got to understand how volunteer-led organisations work and how to communicate with them as well as what to expect in terms of their capability to manage due diligence processes.” This close knowledge of the VCSE sector has allowed Groundwork UK to develop a good understanding of what’s proportional when it comes to distributing money, which means it can give the contracting body a clearer idea of what money can deliver when directed to organisations of various sizes and capacities. The second major benefit of working with Groundwork is that it’s “really good at bringing together partnerships”, as it knows where the “deep pockets of expertise are in the sector”. Graham points out that the energy efficiency programme would not have been possible without the support of specialist organisations such as the Centre for Sustainable Energy, the Energy Saving Trust and Locality. Thirdly, working with a VCSE provider helps create broader impact, with “cross fertilisation being what you get from the sector”. Combining the social and the environmental is at the heart of Groundwork’s ethos, and the funding it distributes  can create other opportunities for VCSE organisations. As Graham phrases it: “A grant programme may allow them to do one thing, but we may be able to communicate to them other opportunities and provide them with added value; so when we’re managing grants focused on a social issue we can signpost local grantees to other forms of funding and provide advice that might encourage them to think about their environmental impact too.” What were the main challenges in applying for a central government contract? One of the main challenges Graham identified was bidding timescales, with it being tricky to “be able to drop everything and jump on a bidding process for sometimes as little as three weeks”. This can make forming partnerships to deliver contracts difficult because “partnerships take time to develop, build and form - and very few VCSEs have those bidding resources, even relatively large ones like us”. Other challenges identified are issues around negotiating risk levels on contracts, as government contracts involve public money, with Treasury rules to “rightly focus on money being sensibly spent and looked after”. When it comes to grant management services, like those managed by Groundwork UK, these can lead to there being an over-specification on the part of the ultimate recipient of the money: “We’re sometimes caught between government machinery which wants all this assurance and protection and risk management, and a small voluntary sector organisation which doesn’t have the capacity to do that. If you put too much on them, they won’t engage - and that’s counter to the purpose of the grant programme, which is to get small-scale voluntary organisations funded to deliver.” The biggest challenge Groundwork faces on some grant programmes is down to annualised budgeting within Government, which can affect frontline organisations if delivery time slips and “potentially means that money disappears if delivery needs to extend into the next financial year”. Before VCSE organisations even get to bid to run a government service, the department in question has to bid to the Treasury as part of a Budget or Spending Review process. Once granted, “there’s a clock ticking”, with the design work and procurement exercise needing to be carried out - so the actual window for the delivery of the services can be “really concertinaed at the back end”, especially if the funding is only secured for a year.  As Graham puts it: “As an intermediary in the process you know sometimes you’ll have to put pressure on organisations to deliver in a less than ideal timeframe because funds can’t easily be moved from one year to the next.” Graham acknowledges that it is “hard to get the right balance between due diligence and not overburdening VCSEs”, but feels there could be solutions around “expanding those timeframes; thinking about multi-year commissioning processes to bring about more long-term certainty.” Another challenge faced by VCSEs is the still significant weighting on price as a deciding factor in who is awarded a contract, which can skew the process towards organisations able to offer the biggest discount, which may not be beneficial to the service being delivered. Graham asks: “If a department has secured funding from the Treasury for a particular piece of work, they’ve secured the money, so why put the additional stretch in there in terms of who can do it the cheapest?” Based on a conversation with Graham Duxbury, chief executive at Groundwork UK groundwork.org.uk

Groundwork is a federation of 15 charitable organisations operating across the UK. It runs programmes and activities to help people improve their prospects, working with communities facing multiple challenges, in places that lack social infrastructure and economic opportunities. It combines environmental and social impact, building the green economy while supporting communities to connect with nature and adapt to the climate crisis. From creating green jobs to supporting people with energy bills and retrofitting homes, it works to build a fairer and greener future in which people, places and nature can thrive. Working with government departments Groundwork UK (the national body of the federation) distributes grant funding for the UK Government, acting as an intermediary to make sure public money is invested in communities at a grassroots level. This involves bidding for contracts with central government departments and acting as an outsourced intermediary provider of grant management services. It’s worked with the Ministry of Housing, Communities and Local Government to get groups  such as parish councils involved in local planning, and with the Home Office to support charities tackling extremism. It’s also been contracted by the Department for Culture, Media and Sport to run the Voluntary Community and Social Enterprise (VCSE) Energy Efficiency Scheme - a £25m programme, largely distributed through grants. So far it has funded 1,100 organisations to carry out energy assessments to help them improve the efficiency of their buildings. The benefits of working with a VCSE organisation Groundwork UK’s position of having national grant management capability but also being able to leverage connections through its federation members allows it to promote grant programmes at a local level, supporting organisations to navigate through complexity and access funding they may not have been aware of. Chief executive Graham Duxbury states that government outsourcing this kind of work aims to ensure grants are accessible to smaller, local organisations that are often volunteer-run. He said: “Having knowledge of that sector and that space is hugely important in terms of designing the service. You’ve got to be aware of capacity restraints and limitations, you’ve got to understand how volunteer-led organisations work and how to communicate with them as well as what to expect in terms of their capability to manage due diligence processes.” This close knowledge of the VCSE sector has allowed Groundwork UK to develop a good understanding of what’s proportional when it comes to distributing money, which means it can give the contracting body a clearer idea of what money can deliver when directed to organisations of various sizes and capacities. The second major benefit of working with Groundwork is that it’s “really good at bringing together partnerships”, as it knows where the “deep pockets of expertise are in the sector”. Graham points out that the energy efficiency programme would not have been possible without the support of specialist organisations such as the Centre for Sustainable Energy, the Energy Saving Trust and Locality. Thirdly, working with a VCSE provider helps create broader impact, with “cross fertilisation being what you get from the sector”. Combining the social and the environmental is at the heart of Groundwork’s ethos, and the funding it distributes  can create other opportunities for VCSE organisations. As Graham phrases it: “A grant programme may allow them to do one thing, but we may be able to communicate to them other opportunities and provide them with added value; so when we’re managing grants focused on a social issue we can signpost local grantees to other forms of funding and provide advice that might encourage them to think about their environmental impact too.” What tips would you have for other VCSE organisations looking to work with government? A key tip Graham has for VCSE organisations is to “be visible to the departments to whom you think you’re relevant”, with an important part of this being to get on a government procurement framework. These are pre-procurement portals through which organisations enter their credentials and effectively write a bid to showcase what they provide and their ability to deliver. Groundwork is on a government framework on grant management services. Many departments use frameworks - with some, like the Department for Work and Pensions, referring to them as dynamic purchasing systems (or DPS). Often, if you are not on a framework, you cannot bid; they are effectively a pre-qualification process, so prospective VCSE suppliers should “find out if there are relevant frameworks for the kind of service that you look to offer”. The second main tip for VCSEs wanting to work with central government departments is to not forget that you can negotiate around certain terms of a contract. Groundwork has successfully had things amended in the terms and conditions of contracts, such as questions around payment. As Graham puts it: “Big businesses do this all the time, and we forget that, so we should have confidence that we can negotiate too and get a deal that’s right for us. Some things will never change but some things can and do.” Finally, Graham emphasises the importance in building a human relationship with the contracting department: “Remember that when dealing with government you are dealing with people. All good contracts are built on relationships so once you start to get to know the people on the other side of the fence and understand the pressure they’re under, such as managing public money and the finance and risk committees they need to report to, you get a better understanding on why things are done the way they are and what can and can’t be pushed back on. Never forget that any government contract is just a bunch of individuals trying to get something done.” Based on a conversation with Graham Duxbury, chief executive at Groundwork UK groundwork.org.uk

Our chair Lord Victor Adebowale founded the Commission on Social Investment, which published a landmark report on how it could better enable the growth of social enterprises. Three years since this independent group found a major unfulfilled opportunity and called for change, the Commission’s recommendations have been reviewed to identify what has changed and what has not - taking into context economic factors such as rising inflation and interest rates, the cost of living crisis and changes in government. Stress points in the original report included the deprioritisation of social enterprises over the past decade and the inequitable serving of social investment across the UK. The structure of the social investment market itself was pinpointed as the root of these problems — particularly the lack of patient, concessionary capital, and lack of flexibility in the structure of key institutions. New analysis broken down into a ‘report card’ recognises some signs of progress but also highlights concerns in areas such as government strategy, key market institutions and access to funding products. Looking ahead, the report recommends more interactions with this new mission-led government, which has already shown an interest in the social impact sector. It also proposes a shifting of expectations from social investment stakeholders, as well as addressing the diversity gap in the social enterprise sector. Overall, this marks a renewed call for structural reform, scrutinising the social investment ecosystem created over the last decade and considering how it might be better unleashed for more transformative impact - across all communities in this country, but especially for those where the need is greatest. Peter Holbrook, Chief Executive of Social Enterprise UK, said: “Over the past decade, the social investment sector has made slow and disappointing progress in reaching its true potential to support social enterprises and charities in very turbulent times. Despite clear recommendations for transformative change, this report suggests not enough has been done to capitalise on the opportunity created through dormant assets, too often mirroring the status quo of investor-first finance. The lack of imagination, from both the previous government and institutions within the sector, has been frustrating. “For the ecosystem of social investment to stay relevant for its intended beneficiaries, its leaders must look at what they can do to further dismantle the ongoing barriers to access that too many experience.  Mission-led businesses have a new opportunity from our new mission-led government. The social investment sector has the potential to embrace a shift toward greater accountability and innovation, but it will take leadership, an appetite, and ultimately some risk. But now is the time to act with purpose and focus.”

At its recent AGM in the City of London, social enterprise cleaning company Clean for Good announced that it was sharing 50% of its distributed profits with its workers. At a time when many employers are concerned about rising employment costs, this social business is showing that by investing in its workers it can deliver a ‘triple win’ – excellent customer service, financial dividends to shareholders and social impact for employees.   Clean for Good is a different kind of cleaning company, established as a social business to provide a fairer deal for cleaners and to drive change in a sector that is infamous for low pay and poor conditions. 50% profits shared with workers Clean for Good is only seven years old but has grown rapidly to a turnover exceeding £1m, employing 75 cleaners. At its AGM on 13th November it announced that it has now made an annual profit for the fifth year in a row, demonstrating that a responsible business can also be financially sustainable. The company also declared a dividend and announced that the company’s profits would be shared out equally between shareholders and employees, with each group receiving 50% of distributed profits. This is in line with the company’s highly unusual Profit Policy which is part of the company’s deep commitment to fair pay. A total of £20,000 of profits was distributed in November. Some 46 cleaning staff received a share of the profits in their November pay packet. A full-time employee will receive £378 of the profit share, with amounts varying depending on the hours worked during 2023-24. Most of the company’s shares are owned by the three founding charities, so most of the shareholder dividends will go to support other charities. Even for these charities, it is a powerful demonstration that philanthropic giving is not the only way to create a positive change. A triple win Clean for Good pays the real Living Wage and also provides better employment terms and conditions for its cleaners than most of its competitors – like occupational sick pay from day one of a cleaner’s employment. This approach has enabled it to deliver a triple win – high customer satisfaction, high employee satisfaction and financial returns to shareholders. A new independently researched Impact Report recently highlighted that the company’s cleaners were likely to have higher job satsfaction than the staff of the offices in which they are cleaning. Many employers in low pay sectors face higher employment costs arising from increases in the Minimum Wage and upcoming reforms to Statutory Sick Pay through the Government’s Employment Rights Bill. This is concerning many employers who see it as a negative, but Clean for Good demonstrates that paying higher terms and conditions is actually good for business. Clean for Good already pays the real Living Wage and offers employee benefits like occupational sick pay, all above statutory minimums already – and this has strengthened the business, not undermined it. What is good for workers can be good for business. Charlie Walker, Clean for Good’s Managing Director said: “At Clean for Good we don’t see our cleaners as a cost that needs to be managed down, but as our greatest asset that needs to be invested in. By sharing our profits we can demonstrate this value tangibly. It is great news for our cleaners but we also believe it is good for the business as staff feel valued, and recognised and this generates a sense of belonging and loyalty within the organisation.” Becky Morris, Finance Director for the Church Mission Society (CMS) and one of the company’s founding charitable shareholders said: “As a shareholder, it’s certainly gratifying to receive a dividend on the investment we’ve made in Clean for Good, because we believed – and still believe – strongly in its purpose and vision. And seeing the company continue to treat its employees fairly and sharing out the profits so equitably makes us feel even better about our investment in this model of enterprise.” Jacqueline Carrion, employed for over 5 years as one of Clean for Good’s cleaners, said: “This bonus makes me feel more valuable and more close to the company. I believe,  in London, that it is the only [cleaning] company that recognizes the values of the employee, by showing this generosity.” cleanforgood.co.uk

Dream Big Sports are thrilled to be able to share access to our Social Value Annual Report 2023-24. We are extremely proud of this comprehensive report which evidences the positive impact we have achieved during the 2023-24 academic year, making a significant difference to the lives of children and young people across the communities that we support. After releasing our very first annual report 12 months ago, our incredible team has been dedicated to exceeding our previous achievements. We are delighted to evidence that there has been significant growth across each of our Key Value Indicators within Education, Holiday Camps and Training in addition to our key focus on Workforce & Employment which has resulted in an increased Social Return on Investment (SROI). Now in our third year of tracking the impact of our provision, we have a sound understanding of what Social Value means to Dream Big Sports and how we commit to reinvesting back into the community alongside our additional Mission: Dream BIG! initiative that has four specific pledge themes and targets to achieve with the support of key partners and stakeholders. Here’s what Director, Dillan O’Connor had to say on the release of our Social Value Annual Report 2023-24:  “As a non-profit organisation, the consistent tracking of engagement, data & feedback and the resulting Social Value Annual Report is a crucial element of our work and perfectly aligns with our company mission. After receiving such an overwhelming response to our first report, we were determined to increase our reach and achieve growth across all areas of the business, which we are delighted to be able to evidence 12 months on. In addition, we were very conscious of our ambitious Mission: Dream BIG! initiative and our capacity to achieve the targets set out for 2023-24 but the team has worked incredibly hard behind the scenes to turn those targets into tangible achievements, providing much added value and support for children, young people and the wider community.”  You can find out more about Social Value at Dream Big Sports and gain access to our Social Value Annual Report 2023-24 by clicking here.