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CHAPTER 5 COMPARATIVE APPROACHES
5.1 This chapter examines the system of social enterprise start-up support in other parts of the UK. The discussion that follows is not designed as an exhaustive description of support initiatives elsewhere, rather it provides an overview of key approaches to delivering start-up support (further examples of targeted initiatives are provided in the next section).
England
5.2 Support for social enterprises in England has moved into a second phase of development with the publication of a Social Enterprise Action Plan by the Office of the Third Sector 24. This broadly mirrors the priorities set out in the Scottish Strategy.
5.3 Within this, start-up support is organised on a regional basis, under the auspices of England's nine regional development agencies ( RDAs). As part the Action Plan the RDAs have been tasked with encouraging new entrants to the sector by, for example:
- embedding social enterprise in existing entrepreneurship and leadership programmes;
- influencing partners to ensure that they are able to offer appropriate advice to social enterprises in pre-start or start-up stages; and
- promoting sustainable models of infrastructure and intermediary support for potential new entrants to social enterprise.
5.4 Mainstream business support to social enterprises is provided through a process of Information, Diagnostic and Brokerage ( IDB), under the regional Business Link structure. This involves an initial contact with a business advisor and the brokering of support from appropriate local providers.
5.5 Within and parallel to this, and common to Scotland, all regions have a variety of specialist social enterprise business support services, intermediaries, training providers and funds. Again, as in Scotland, most if not all providers offer some form of assistance to formative social enterprises, albeit often not as a specific priority.
5.6 There is currently considerable variation and experimentation around the co-ordination and delivery of support to social enterprises 25. Within this there seem to be a small number of main drivers:
- simplification - the focus is on simplifying business support to the sector and reducing confusion, while also improving the efficiency and effectiveness of the support;
- rationalisation - in part due to the declining availability of funding (e.g. EU, Phoenix Fund etc.) there is increasingly less scope for small, short-term, and one-off initiatives to promote start-ups; and
- client choice - reflecting the scope of provision available, some areas are introducing voucher or credit systems to enable social enterprises to directly purchase support from a provider of their choice.
5.7 The reconfigured business support system being introduced in the East Midlands (see Box 5.1) provides a window into the support being developed across England. The principal focus is on making the mainstream IDB business support process more responsive to the sector (both new and growing).
Box 5.1: Social Enterprise Support in the East Midlands |
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The Regional Economic Strategy for the East Midlands identifies social enterprise as one of the priorities for business support and East Midlands Development Agency ( EMDA)'s corporate plan includes as a key performance indicator the number of new social enterprise start-ups. Social Enterprise East Midlands ( SEEM), with EMDA and Business Link Leicestershire piloted a specialist IDB service for social enterprises. This found the diagnostic process to be inappropriate for start-ups, who also required brokered access to ongoing and specialist business support. Championed by the Office of the Third Sector, and with ESF funding support, SEEM and EMDA are now set to run a two-year £1m programme. In part, this aims to embed social enterprise start-up support into mainstream provision through for example: - tailoring diagnostic tools to better support social enterprises;
- awareness-raising activities and workshops aimed at pre-starts and start-ups;
- a freephone signposting service aimed at groups or individuals who need help starting up or developing social enterprise;
- grant support for social enterprises to purchase specialist business support in line with diagnosed requirements;
- sessions to facilitate improved partnership working between Business Link and specialist social enterprise networks; and
- awareness-raising for business advisors and support to gain an accredited qualification in social enterprise business support.
Source: Social Enterprise East Midlands |
Wales
5.8 The Welsh Social Enterprise Strategy (see Box 5.2) was introduced in 2005, and similar to Scotland sets out four strategic objectives, to develop the sector through: 26
- creating an enabling environment;
- making social enterprises better businesses;
- establishing the value of social enterprises; and
- encouraging the development of new opportunities.
5.9 The Strategy was based on research that identified some 620 established social enterprises in Wales, to which could be added another 438 emerging or potential social enterprises 27. Unlike Scotland, the Welsh strategy sets out an explicit target of forming 80 new social enterprises over the period 2005-2008.
5.10 The creation of new social enterprises is supported nationally by various intermediaries and support services, supplemented locally by local enterprise agencies, County Voluntary Councils/Services and local authorities. Start-ups are also stimulated through targeted funding programmes (Coalfields Regeneration Trust) and support initiatives (e.g. the Communities First). This is a similar mix of provision to Scotland.
5.11 Wales-wide, support providers are brought together as part of the Social Enterprise Network. This provides a representative voice for the sector and supports the joined-up delivery of the Social Enterprise Strategy.
5.12 Mainstream business support is offered by Business Eye for Wales (broadly equivalent to Business Gateway in Scotland). This provides a gateway to all publicly funded services within a single contract framework for business support ('General Support for Business'). Some initial steps have been taken to raise the awareness of Advisors within Business Eye and to equip them to diagnose the needs of social enterprises.
5.13 Despite a rationalisation of business support arrangements, start-up support to social enterprises across Wales continues to be delivered as a stand-alone contract by the Wales Co-operative Centre. This offers one main source of publicly funded advice, training, and support for start-ups. This reflects the distinct and specialist nature of start-up support required by the sector.
Box 5.2: Wales Co-operative Centre: Social Enterprise Start-Up Contract |
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The Wales Co-operative Centre was established in 1982, and has developed into a leading provider of support to the social enterprise sector in Wales. It employs more than 60 staff based around Wales. In 2005 the Co-operative Centre secured a contract to deliver business start-up support to social enterprises and co-operatives in Wales. The contract, which runs up to 31 March 2008, initially formed part of the New Starts Business Advice programme of the Welsh Assembly. The start-up contract sets a target of 40 start-ups each year and stipulates the form and process of eligible start-up interventions. This is regularly monitored by the Welsh Assembly. The start-up service adheres to a rigid three stage process, with enquiries dealt with through Business Eye (Stage One), and with initial diagnostic, advice, and workshops (Stage Two) and in-depth business support (Stage Three) provided through the Co-operative Centre. The start-up services of the Co-operative Centre have been co-financed by European Structural Funds as part of a funding package exceeding £2m. This has significantly enhanced the scale, flexibility, and scope of start-up advice available under the New Starts Contract. This funding package part funds a Business Support Team consisting of ten members of staff, who help to support and develop social enterprises across Wales. Since the start of the initiative, 226 social enterprises and co-operative businesses have been registered, 452.5 jobs have been created, and 1,220 jobs have been safeguarded. Over 670 new, pre-start and post-start businesses have received help from the Business Support Team. Source: Wales Co-operative Centre |
Northern Ireland
5.14 The Northern Irish strategy for supporting the social economy sector was set out in late 2004 28. This three-year plan outlines three strategic objectives, to:
- increase awareness of the sector and establish its value;
- develop the sector and increase its business strength; and
- create a supportive and enabling environment.
5.15 The Department of Enterprise, Trade and Investment ( DETI) takes the lead in creating an integrated approach to the sector's development as a priority within the overall framework for enterprise development in Northern Ireland.
5.16 A recent study produced by the DETI has identified a wide and diverse social enterprise sector in Northern Ireland 29. This builds on earlier work that highlighted a large number of small, new start enterprises that required various types of financial and technical support and which needed to be progressed towards more mature and self-sustaining forms 30.
5.17 At the pre-start stage, awareness raising and capacity building support for potential social enterprises has been widely available across Northern Ireland. The majority of this support has been localised rather than nationwide, with provision largely through the Local Strategic Partnerships ( LSPs) and via the EU-supported Peace II programme.
5.18 At the post-start stage there has been increasing national provision:
- like Scottish Enterprise, recent actions have been taken by Invest NI (the national enterprise agency) to ensure that social enterprises access mainstream business development support on a 'level playing field' basis, through the Invest NI Business Development Solutions ( BDS) portfolio; and
- an £18m three-year Modernisation Fund, administered through the Department for Social Development ( DSD), was introduced to support voluntary sector and social economy organisations to become more enterprising, more sustainable, and more active in service delivery.
5.19 With active provision identified at pre and post start stages, the main gap identified relates to support to start and develop a social enterprise within the first year of trading. This has provided the rationale for the development of the national Social Entrepreneurship Programme. There is no comparable programme in Scotland.
5.20 The Social Entrepreneurship Programme (described in Box 5.3) was launched in June 2006 to provide an integrated package of technical and financial support for groups wanting to establish a social enterprise. It is a niche programme consistent with the segmentation of target groups under Invest NI's Entrepreneurship Strategy.
5.21 The Social Entrepreneurship scheme follows on from, and is a refinement of, the Community Business Start-Up Programme, which operated in Northern Ireland since the early 1990's. This scheme demonstrated encouraging economic impacts and high survival rates for start-up social enterprises. 31
Box 5.3: The Social Entrepreneurship Programme ( SEP) |
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The SEP has been set up to facilitate the establishment of 60 new social enterprise start-ups over the course of two years (to March 2008). Support is available to constituted groups that have accessed some form of pre-start support and are likely to have a well defined business idea. There are two main components to the SEP: - Financial support - a start-up grant of up to £5,000 per start-up, with access to loan finance of up to £25,000 from the Ulster Community Investment Trust (subject to due diligence); and
- Capability support - a set mix of modular training and one-to-one advice, including Business Plan Development, Start-Up Support, Post Start-Up Aftercare, and Post Start Mentoring.
In addition, the programme has a separate post-start 'capability development stream' to enable the transition of voluntary groups taking on social enterprise activity supported by the DSD Modernisation Fund. The programme is managed by Enterprise NI (two staff posts) and delivered by existing Social Enterprise Advisors across its network of 32 independent Local Enterprise Agencies (themselves social enterprises), with support from a pool of experienced post-start mentors. The overall SEP targets are for 60 start-ups to be supported, achieving a survival rate of 70% (three years after assistance). It aims to achieve a conversion rate of 50% 'pull through' to Invest NI's mainstream/ BDS portfolio and to assist 40 groups linked to the DSD Modernisation Fund. Source: Invest NI |
Key Points
5.22 This section has highlighted a number of main points about the start-up provision delivered elsewhere in the UK:
- each of the areas examined has explicitly recognised the importance of encouraging new entrants to the sector;
- there is as yet no accepted model or framework emerging for start-up support, with much experimentation still evident;
- much of the emphasis elsewhere has been on organising, simplifying, and integrating support provision into a more coherent offering to start-up enterprises; and
- overall, the emphasis on, and approach to, supporting start-up enterprises in Scotland does not compare favourably to other parts of the UK.
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