Out with the old, in with the new

2011 was a big year for social enterprise. It was the year when it became clear that the party really was over for us, too. That for all the coalition government’s warm words about social enterprise that warmth was not going to translate into cash – either in terms of direct funding for social enterprise support or in terms of interventions to tilt the public sector market in our favour.

One way or another, New Labour put a reasonable chunk of money into supporting and promoting social enterprise. That money may not always have been spent on the most useful things but there’s no doubt that it played a big role in building the profile of the sector over the last ten years. Now most of that money’s gone and what’s left will soon be gone too.

The effects of the wind-up of Regional Development Agencies began to become clear in the South West, where Rise became the first regional social enterprise support agency to take the decision to close.

The difficulties for social enterprise in the new public sector marketplace were shown in Surrey, where NHS commissioners dished out a £500 million contract to a private provider backed by Virgin rather than Big Society award-winning social enterprise, Central Surrey Health.

A possible glimmer of hope was the slow procession through parliament of Chris White MP’s Public Services (Social Value) Bill – backed by the government once the words ‘Social Enterprise’ had been taken out of the title. When it becomes law, the Act will encourage commissioners to consider wider social value in the decision-making.

The government’s failure to back social enterprise as an organisational structure in law was an added frustration at the end of a difficult second year in the life of the Social Enterprise Mark – which faced challenges from academia, the co-operative movement and social businesspeople, while ending its relationship with Social Enterprise UK, the umbrella organisation that had started the year as the Social Enterprise Coalition.

In a good year for social enterprise research, Social Enterprise UK’s 2011 State of Social Enterprise Survey, Fightback Britain, uncovered a social enterprise sector more likely to be based in deprived areas than conventional small businesses, and more likely to be start-ups. That’s a combination of characteristics that will increase the pressure for social enterprises in 2012 as the full effects of public spending cuts hit home in areas where residents are heavily dependent on the state.

Many in the sector, including me, have spent substantial parts of the last year chanting the mantra ‘challenges and opportunities’. That is the thread running through Better Mental Health in a Bigger Society?, the thinkpiece that my social enterprise, Social Spider CIC, produced in 2011 and which was published by Mental Health Providers Forum in December.

The problem is that, for many social enterprises, the challenge of having no money risks seriously inhibiting our ability to take the opportunity to fill some of the gaps in social provision left by the retreating public sector which will not be filled by the private sector.

So 2012 is a year of possibilities but one we enter with a slightly uncomfortable mix of excitement and trepidation. The big step the government did take during 2011 was the setting up of the organisation now known as Big Society Capital. 2012 will see the wholesale finance institution begin the process of injected £600million into the social finance sector. Given the social finance sector’s persistent difficulties in living up to its own relentless hype, it’s likely to make a significant impact.

Big Society Capital – working through new and existing investment organisations – will be provided investment that will enable social enterprises to get started and (primarily) to scale up and grow. That investment is welcome but it’s not going to solve the biggest problem faced by many social enterprises this year – getting enough people to buy the things we’re selling and/or coming up with different things to sell. It’s not going to be easy. Good luck!

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5 Comments

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5 responses to “Out with the old, in with the new

  1. @ethicaljourno

    Thanks for the roundup, a good read. Can I also mention that I did a couple of roundups of socent products last year and found socents can be quite bad at promoting what they sell. I’m doing a new regular piece for guardian promoting se products, so get in touch if u have something to sell, particularly if it’s suitable for general public.

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  2. Beanbags admin

    Thanks, Claudia. I’ve got a magazine to sell: http://www.oneinfourmag.org/index.php/subscribe-to-one-in-four/

    Like

  3. The great problem of selling social enterprise products in our experience has been getting media interest. I’d spent nearly £1000 to be ‘verified’ for one ethical business directory and it yielded not one enquiry before the subscription ran out.

    Our core revenue derives from corporate supply chains, but the application of our ‘profit for purpose’ model to renewable energy initiatives should be of considerable interest to the public:

    http://www.theplacestation.org.uk/place/parkends-derelict-shop

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  4. Pingback: 6th January: Transition Institute's Weekly Roundup!

  5. We provide funding and business expertise from 6 major corporates to successful social enterprises who are looking to grow. A strong business model and good track record needed – contact me if you would like to find out more. We would love to invest in a great UK SE selling on the high street.

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