Greater Manchester: Social Enterprises

Social Enterprise Lead at New EconomyAngeliki Stogia

Today we will cover

• Key challenges in Greater Manchester (GM)• GM Social Enterprise research: key findings

Mini break

• Social Innovation Driver tendering opportunity

Impact of financial downturn

• The recession had a significant impact in GM:• Increased unemployment• Increased demand for public services

• Yet there remains significant problems from pre-recession:• Economic inactivity• Poverty• Skills gap• Poor health• Lack of joined-up services

The Greater Manchester Strategy

GM – currently a cost centre for UK - £22bn public spending Vs £17bn tax generated – ambition to close then reverse gap. Long-term economic growth and ensuring residents able to contribute to and benefit from growth are critical.

“By 2020, the Manchester city region will have pioneered a new model for sustainable economic growth based around a more connected, talented and greener city region where all our residents are able to contribute to and benefit from sustained prosperity”

The new economic reality

Researching Social Innovation

• Particular focus on social enterprise• What is the scale and nature of opportunity to deliver GMS?• What are the resources to realise opportunity?• What has been achieved elsewhere and transferrable

experience• Supporting PSR• Scale and ambition

How can we maximise the contribution of social enterprises and social entrepreneurs to delivering the GMS?

Definition: social enterprises supported must

• Have explicit social aims and ethical values • Principally re-invest in the business/community rather than

distributed to owners/shareholders• Be enterprise oriented • Have social ownership • Be accountable to their stakeholders and the wider

community for their social/enviro/economic impact• Be subject to an 'asset lock'

Community enterprise

Serving a particular geographical community or community of interest

Social Firms

Integrating people who might otherwise find it difficult in the mainstream job market

Co-operatives

Organisation owned, controlled, and run for the benefit of their members

Public sector spin-outs

Independent social enterprises set up to deliver services that were previously provided by public sector organisations

Trading arms of charities

Enterprise started by charity or non-profit that generates revenue for the organisation

Business with social mission

Provides products/ services for community good

Business with social objectives

Hires marginalized people in good employment opportunities

Business with social objectives

Businesses with social objectives as central as their economic objectives

Business with social objectives

Businesses with social objectives as central as their economic objectives

Methodology• Literature review• Social enterprises in GM

• Telephone surveys• Face to face interviews • Social investors survey• Review of infrastructure support

• Financial analysis of social enterprises in GM• Social investor surveys• Data sample analysis

• Support model analysis• Best practice nationally and internationally• Site visits, interviews, 1-2-1s

Emerging GM profile (literature review)

• Employs 23 FTEs• Heavily reliant upon volunteers for day-to-day activities• Half turnover more than £100,000 per year• Earns 75%+ income through trade (with consumers, public

agencies, other businesses and other social enterprises in that order) – in a large minority of cases topping this up with grants and donations

• Led by a management/governance team that reflects location in which the enterprise is based and provides products that meet specific local needs

• Makes efforts to measure social impact

Social Enterprise survey: SWOT

Flexibility to innovate, supportive local links, skilled and committed staff, SMT and directors

Lack or resource/ capability, firefight Vs plan development, low profile of networks and clients

Expanding to cover new areas, new client base, geographical coverage, work more with private sector

Funding cuts, competition (socent/private sector)

S

W

O

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Social Investors Survey

• Number and range of investment funds is increasing rapidly • Variety of investments on offer (grants, loans, equity or

quasi-equity)• Gap in relation to the provision of unsecured loans below

£50,000• Vast majority (90%) of lending in form of secured loans• Investor activity in GM appears to average 10-20

investments per year• Limited evidence available on the demand for investment

Existing social enterprise ecosystem

• Multitude of initiatives/actors at national, regional, GM level• Varying issues to address, places to get support

• National bodies/initiatives/organisations, regional, GM and local• Growing number of stakeholders interested in the agenda• Tried tested approaches: e.g. workspaces, hosted startups• Traditional business support services, VCS, Universities, RPs• Consultancies, legal firms, accountancies, feelancers etc

Social enterprise support in GM:fragmented, patchy, unfocused, generic, bog standard, ignorant

GMCVO social enterprise business support focus group

Key findings• Social enterprise comes in different shapes, sizes and stages of

development• Higher proportion of enterprises constituted as coops or

community benefit organisations and more CICs in GM than elsewhere in the NW

• Majority of social enterprises very much smaller than headline figures usually quoted would suggest

• Excluding larger social enterprises the first decade of life appears to be a key barrier to get through for smaller social enterprises

• Excluding larger social enterprises, median income in GM is only one third of the £50K average for the NW with accumulation of fewer assets

Implications for GMS delivery

• Lack of an overall picture of capacity/capability of social enterprises

• Lack of understanding and strategic direction• Duplication of effort, overlap of activity• Limited opportunity for collaboration• Fragmentation

Examples of support

The opportunity: Social Innovation Driver

Coordinated support for social enterprise in GM• Scale the impact of social enterprise in GM

• Develop an offer for social enterprise business support in GM• Enhance capacity of social enterprises to develop innovative solutions• Coordinate, collaborate, advocate

SID: Inclusive social enterprise support partnership that will be financially self sustaining• Coordinate and enhance the quality of business support• Support high quality learning that meets the needs of social

enterprises/entrepreneurs• Leverage structured support and infrastructure creating real

opportunity

Caveats….

• European Commission sign off the EU programme• Delays starting the programme

• Different managing bodies (DWP/DCLG)• Must be tendered separately (ERDF and ESF elements)

• Capacity to process the Invitations to Tender • Delays on the tendering timetable

Stakeholders engaged

Stakeholders engaged

SID activity (ERDF)

• £1m ERDF in GM*• Provision of advice and specialist support services to social

enterprises in GM• Business support specific to the needs of social enterprises• Supporting social enterprises to measure and evidence impact

of innovative solutions• Support in contract, procurement and investment readiness,

prototyping and support in accessing social investment• Clusters for smaller social enterprises

SID activity (ESF)• £2m ESF in GM*• Learning and training opportunities that improve the skills and

productivity of the social enterprise workforce• Leadership and management training and activity to encourage new

social entrepreneurs • Funding to support social enterprise volunteers through ILMs and

accredited or non-accredited training • Mentoring, peer support, support for value based partnerships and

coaching• Promoting social enterprise and raising its profile in GM

* Applicants need to provide their own match funding for the activity. Match must be identified and secured before European funding is awarded

OutputsERDFIntermediate and intensive business support 50Social enterprises signposted to existing provision 200Social enterprises engaged with 400

ESFParticipants engaged with* 1000Unemployed 400Economically Inactive 400Young People 15-25 300Employed 200

* participants can fall in more than one category

Indicative Timetable

Launch of CallStage 1 from submissionConfirmation of Stage 1 outcomeStage 2 applications invitedStage 2 submissionsConfirmation of Stage 2Activity can commenceProject activity end date

• Informal agreement of the OP likely in February

• OP programme sign off June 2015 (earliest)

• Theoretically can launch calls in March and agree projects, at risk

• Contracts formally issued after formal adoption of the OPs

Questions..

• Further ideas to tackle the challenge?• Missing out any key activity?• How can you engage with the social innovation driver?

Thank you!

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