Press Story

The report, Growing the Big Society: Encouraging success in social and community enterprise in deprived communities warns that there is a significant gap between the expectations of the Big Society and the current capacity of the sector. It argues there are not sufficient numbers of 'enterprise ready' organisations looking to contract with the public sector.

Despite these concerns, the report, which was commissioned by North West Together We Can, highlights some examples of some of the best practice in the North West region. St Peter's Partnership in Manchester has an annual turnover of £2 million, earned by their willingness to take risks and the talents of their committed team. But such examples are few and far between.

The research reveals many organisations claiming to be community or social enterprises are currently relying on grants and public sector funding. In an online survey conducted by ippr north with social enterprises in the North West, grant funding had been the primary port of call for over 70% of respondents in the last 12 months. The report argues that with such a strong preference for grants, even amongst those claiming to be community and social enterprises, there is a long way to travel before voluntary and community organisations can become fully fledged social enterprises. It is going to require significantly more intellectual and financial investment and coordination, particularly at the local level, if the Big Society is going to take off.

ippr north director Ed Cox said:

Public sector contracts are a key route to sustainability for social and community enterprises but the drive for efficiencies means contracts are increasing in size. This makes it more difficult for social and community enterprises to win contracts as they're often small and locally focused. If we're not careful this drive for economies of scale will be at odds with the best intentions of the Big Society. Organisations need support to make the transition from being aspirant community organisations to fully fledged social enterprises. But the support on offer to them is complex, confusing and unhelpfully competitive.'

The report recommends:

urgent, robust and frequent dialogue between national policy-makers, regionallyand locally-based representatives of the third sector, local authorities and other support agencies in order to address concerns about capacity and funding.
money coming to the sector through the Big Society Bank, the Communities First Fund and any local authority discretionary spend should be targeted at the areas of greatest need. Investment should focus on securing sustainability and supporting start up organisations in areas where they are absent.
Aspirant social enterprises should undergo an organisational review, focussing on core mission and future financial sustainability in order to facilitate a genuine transition to a more enterprising approach.
Local authorities and other public service providers review their commissioning and procurement processes to ensure they are accessible to the social and community enterprise sector. This should then move quickly from developing strategies and planning to concrete action.
Better co-ordination between the myriad of support agencies in the so that more coherent support can be offered to existing and aspiring community and social enterprises in the region. This should be based on a 'life-cycle framework'.

Notes to editors:

This report has been compiled by the Institute for Public Policy Research North (ippr north) and Manchester Business School Incubator for North West Together We Can, the Empowerment Partnership in the North West.

The report draws on a variety of research methodologies including:

an overview of the policy context for community and social enterprise, and a review of the relevant literature.
detailed case study research conducted with five social and community enterprises in the North West, charting the journey they have been on and identifying key turning points, critical success factors and support needs at different stages of organisational development.
an online survey conducted with social and community enterprises in the North West, which provided an opportunity for a wider range of organisations to give their views on the critical success factors and support needs of social and community enterprise.
interviews with key decision makers and support providers at the regional and local level
a workshop held with individuals working in social and community enterprise, those working in infrastructure organisations and representatives of local and regional government in the North West.

Definitions:

A social enterprise is a business with primarily social objectives, whose surpluses are principally reinvested for that purpose in the business or community, rather than surpluses being used to maximising profit for shareholders or owners.

Community enterprises have exactly the same principles as social enterprises. However, they are different in that they seek to benefit a particular geographic area or community of interest and are often run by people from within the community they serve. (CLG 2010)

Contact:

Tamsin Crimmens, Media and Events Officer: 0191 233 9051 / 07800 742 262 / t.crimmens@ippr.org