John McMullan FRSA, believes that social enterprise will play a significant part in our economic recovery but in a unique role that places social impact and social values at the heart of service delivery.
“Simplezz”: to quote that ubiquitous meerkat who appears frequently on our television screens: social enterprise is the application of a traditional business model to support the achievement of social goals. It integrates the desire to achieve a social purpose with sensitive and ethical commerciality.
It is not new; it is just that its application is gaining critical mass, so much so that it now forms a central platform within the Coalition’s’ ‘Big Society’ idea. The Prime Minister has publicly acknowledged the contribution made by over 55,000 social enterprises in the UK turning over £27bn per annum.
This growth is replicated in the economic fabric of Northern Ireland. The Northern Ireland Social Enterprise Network estimates that there are over 1,000 social enterprises providing 5% of Northern Ireland’s economic activity. The Northern Ireland Council for Voluntary Action’s State of the Sector Report estimated third sector income (2006/07) at circa £600m and employing over 26,000 people.
Bryson Charitable Group is Northern Ireland’s leading social enterprise pursuing a challenging modern vision ‘to be leader in creating a just and sustainable society’. Bryson has become a significant part of the economic and social fabric and on a typical day will provide over 24,000 services, working with families to avoid children going into care; installing insulation measures; providing energy advice; providing benefit checks; assisting asylum seekers; collecting recycling from doorsteps and delivering training for employment.
The UK is in challenging economic times, affecting in equal measure the public, private and voluntary sectors. The next few years of fiscal austerity challenge us to find new economic paradigms and new organisation shapes to take us forward. That duopoly of old economic analysis, private sector/good and public sector/bad with no place for social enterprise has lost relevance in the emerging economy.
The UK Social Enterprise Coalition recently published statistics that show more Social Enterprises are experiencing growth (58%) compared to private sector SMEs (28%), which suggest something new is emerging in our economy. If a rebalancing of the way we deliver public services is inevitable then the real challenge is building a culture of enterprise into how we do business; public, private and social. Our priority must be the creation, through careful strategic investment, the conditions for enterprise to blossom in all sectors in order to navigate difficult economic conditions.
So what of our economic future and its challenges? Perhaps, not so ‘Simplezz! Have we have created a public sector racked with tiers of bureaucracy that have bloated its costs and neutered its effectiveness? Has our private sector really performed better and does it demonstrate the zeal for enterprise we need to radically reshape our economy towards 21st century enlightenment? Social enterprise is an emerging model, which may be more significant than we yet recognise. If its philosophy is rooted in the social objectives of our voluntary and public sectors then its economic model takes the best of enterprise from our private sector. There is also a real challenge to our third sector, requiring those who wish to walk this path to remove the comfort blanket of grant aid and commercialise their funding streams: competitive tendering, sales income, debt financing, raising bonds will be aspects of this new social commercialism.
If this change comes to pass then what will we get for our money? I believe, we will see a new vibrant part of the third sector playing a leading social and economic role: creating jobs; delivering cost effective services that are actually tailored to local need and a new element of our economy, not driven by profit but driven by delivering service excellence with profitably. Successful social enterprise is liberating, freeing an organisation from the restriction of grant aid but more importantly delivering real independence to deploy profits for social good without the restriction of political consent.
Bryson works across rural and urban Northern Ireland employs over 650 staff, 95% of revenue comes from service contracts, last year Bryson achieved 22% growth in turnover (£24.2m) and expects turnover to rise to £29-£30m in 10/11. Most significantly of every £1 that Bryson spends, 95.5 pence goes directly back into service delivery and development.
It is just one of an increasing number of traditional third sector organisations that have made the change and like many others has done so successfully and continues to grow. Social enterprise is not without difficulty or risk, some will fail, some will grow, but that is the same for the other sectors and is it not Darwin’s principle of survival that drives success?
John McMullan is the Chief Executive of the Bryson Charitable Group.