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A competitive, confident and credible social economy

This case study was presented at the EQUAL conference Social economy; a model for inclusion, enterprise, and local development held in Warsaw on 10-12 May 2006. Full documentation is avaialble at http://ec.europa.eu/employment_social/equal/activities/200604-se-etg2_en.cfm

See also: Action learning set

Bristol City Council in southwest England wants to improve its partnership with the social economy by helping it to be more competitive, confident and credible. Building these '3 Cs' depends on social enterprises valuing their own strengths and weaknesses, and on presenting themselves and the benefits they create effectively. From the council’s side, assessing these benefits more accurately could transform both procurement and asset transfer policy.

Developing the social economy is a key part of Bristol’s regeneration strategy, which revolves around four axes: business invest-ment and growth, the environment, innovation and creativity, and economic inclusion and neighbourhood renewal. The city already benefits from a large social economy, consisting of over 1,000 organisations trading on a 'not for personal profit' basis, such as community businesses, co-operatives and local self-help or interest groups. They play a key role in countering the exclusion of disadvantaged people, as over half are based in recognised disadvantaged areas, and a third are owned and led by black and minority ethnic people, disabled people and women. Their activities and services range from housing and property management, culture and sport to manufacturing, care and the arts. The sector accounts for 4.3% of the city’s GDP and provides more than 7,000 jobs.

What motivated the project? “Our work is based on what must be the most thorough survey of the needs of the social economy ever carried out,” Mr Fowler claims. “In 1999 we surveyed over 1,000 organisations (getting a 37% response rate), and followed up with structured interview of a sample of them. The survey [1] told us that the salient problems the social economy was suffering from were how to attract and retain good staff, how to raise money, and how to reach new markets.”

Through EQUAL, and in partnership with the leading local support organisations for the social economy, the council therefore set about remedying these problems. The aim is to develop a stronger identity for the social economy, associated with high-quality products and jobs. This depends on finding and adopting quality assurance models that suit the social economy’s needs.

But its aims are even broader. “Our idea is that everything we do for social enterprises is equally applicable to other small businesses, and especially micro-enterprises of less than ten people,” says project co-ordinator Ted Fowler, who works as an Economic Regeneration Officer for the council.

PERform - a diagnostic workbook

Regarding quality management, the partnership observed that most business support focuses on crisis management, business planning and finance, rather than on broader issues. It wanted to encourage a more holistic approach, and put it into practice in the form of a simple diagnostic workbook called PERform – (performance, evaluation, review). It is based on the European Foundation for Quality Management’s EFQM Excellence Model. http://www.efqm.org This tool is published in the form of a short 16-page booklet which is downloadable from the C3 website http://www.c3partnership.org.

It takes the user through 45 short statements divided into nine sections: leadership; policy and strategy; people; partnerships and resources; processes; customer results; people results; society results; and key performance results. In each case, the user is invited to write down one thing the organisation does well, one thing it could do to improve matters, and then to enter scores for performance now and performance desired in 12 months’ time. At the end, this can be summarised to form an action plan.

The workbook has other benefits: it is designed to generate dialogue among staff members, to help prioritise actions and to provide a way of measuring progress. It can also be the basis for obtaining other forms of certification, such as ISO 2000, Investors in People or certification as a childcare provider.

But why encourage social enterprises to examine their own performance? As someone who has been in business himself, Mr Fowler takes a businesslike approach to the social economy. He believes that contractual relationships are healthier than grant dependency: “Grants tend to instrumentalise, whereas contracts empower,” he says, “so we help organisations to treat their funders as customers. By analysing the benefits they create for the customer, they can turn round the idea of performance monitoring, which they often feel to be an imposition, and make it into a sales proposition. Then they can expand into new business areas.” It is not always plain sailing. “At ground level it can be hard work, particularly with the smallest organisations. Like microbusinesses in general, a lot of organisations in the sector are neither very credible nor very confident, and they are often hesitant to go outside their comfort zone.”

Creating a stronger identity for the social economy

  • A trade association

C3 has set up a trade association to develop a stronger identity for social economy enterprises in southwest England, based on a quality standard. It will support networking, particularly within trade sectors such as childcare and retailing, keeping members in touch via a newsletter, web forum and meetings. It will create a common logo and conduct marketing campaigns at sector level. It will lay on training events, offer advice and co-ordinate strategy.

  • A business directory

“On the marketing front, every year we publish a 20-page glossy directory entitled Your Guide to Social Business which lists around 200 social enterprises in the Bristol area. It is mailed out with the Venue listings magazine, and thus reaches several million potential customers,” says Mr Fowler. It is supported by an online directory http://socialeconomybristol.org/content/bacen_2005.pdf.

  • Consultancy support

Targeted particularly at rural parts of the region, the Social Enterprise Hub is a small unit that will provide social economy organisations with a detailed diagnosis of their business support needs. It will review the outcome of the PERform diagnosis, and then commission appropriate support.

Transferring underused assets

An important reason to make progress in assessing the impact of the social economy is to improve the use of the council’s stock of property and land.

Through historical circumstances connected with the monasteries and the city’s early role as a port, Bristol City Council has accumulated huge property holdings, and now owns over one-third of the land within the city boundary. This is a two-edged sword. On the positive side, the land and property is a resource which is within the council’s own control – unlike, for instance, its Council Tax revenue, which is determined by central government. But on the other hand it is also a massive liability, as a lot of the property is listed as of historical value, and so cannot be converted, while much of the rest consists of out-of-date buildings like schools, which are difficult to use for other purposes.

In 2005, the council commissioned a report on its asset transfer policy. The consultants found that in the past a number of pieces of property had been transferred to social economy organisations. One example is in Southmead, where a piece of land was sold for £1.5m (€2.2m) and the proceeds given to the Southmead Development Trust. This enabled it to be financially independent and to raise match funding from external sources. In Southville, the council sold 60% of a site to a housing association, and used the money to build a community centre on the remaining 40%. Altogether, about 100 properties with an annual rental value of £0.5m (€0.7m) are being used under concessionary leases – that is effectively for free.

However the report also found that the transfers had taken place on a case-by-case basis, and thus many potential benefits were being missed. By providing a stable financial base, owning a building is an important means of helping a social economy organisation to escape dependency on grant aid and become self-sustaining. It can be used as security for loans.

Transferring an asset can also be linked to the provision of a service by the organisation in question. The report therefore recommends a move to a more systematic way of assessing the added value of working with the social economy. One caveat is that the whole exercise could backfire if it results in an additional layer of scrutiny, and constitutes yet another barrier to socially aware procurement. Another is that it makes no sense to dispose of a dilapidated building to a community organisation if it does not have the money to repair it.

British local authorities have the power to undertake actions that they consider are likely to achieve the economic, social or environmental well being of their area, and can dispose of property for less than its commercial value if the difference is not more than £2m (€3m). “It makes a lot of sense to hand such properties over to other organisations so that they can find a new use of benefit to the community,” says Mr Fowler. "However we need to make a credible case to surveyors and procurement officers. In the C3 project we are therefore working with the New Economics Foundation (NEF) to apply the Social Return on Investment (SROI) method. This will help organisations both to understand the added value they create, and to increase it. The big problem with the way social enterprises talk about their added value is that they do in ways that other people cannot account for.” The project is therefore focusing on those aspects that can be expressed in monetary terms.

A second aspect of the project’s work is to bring different departments of the Council – for instance those dealing with property and community development – on board the asset transfer strategy, as well as influencing professional bodies such as the Royal Institution of Chartered Surveyors (RICS) and the Society of Procurement Officers in Local Government (SOPO). It intends to do this through testing and developing good practice and publishing guidelines.


DP name: C3 – A Credible, Competitive and Confident Social Economy
DP ID: UKgb-147
Contact: Ted Fowler
Economic Regeneration Officer
Bristol City Council
Brunel House
St. George’s Road
Bristol BS1 5UY, UK
Tel: +44 117 922 2257
Fax: +44 117 922 2954