ࡱ>  Vubjbj Y>  8StLU(;;;; " .\U^U^U^U^U^U^UY9\j^U96" 66^U;;U!!!62;;\U!6\U!!TOS;A%gYhP:HUU0UQ\D6\XSS\dT66!66666^U^Uz 666U6666\666666666 :   Thorn House 5 Rose Street Edinburgh EH2 2PR 0131 243 2654 HYPERLINK "http://www.ssec.org.uk/"www.ssec.org.uk Scottish Social Enterprise Coalition submission to the Scottish Labour Party policy Consultation This paper is the Coalitions policy submission to the Scottish Labour Party ahead of the 2011 Scottish Parliament Election. The document highlights some of the main issues affecting social enterprises in Scotland. Should you wish explanation of any points please contact Callum Chomczuk in the first instance. (email: callum.chomczuk@ssec.org.uk). Antonia Swinson Chief Executive Key Messages Social Enterprise can address the challenges facing Scotland Social enterprises are businesses that trade to deliver social and environmental purposes. Social enterprises exist to make a profit just like any private sector business. However, instead of being driven by the need to maximize profit for shareholders or owners, social enterprises exist to address market failure with any profits or surpluses made reinvested into social and environmental purposes; for example providing employment opportunities to the long term unemployed. Without making a profit, social enterprises cannot meet their social and environmental objectives; they must trade to be sustainable. Profit " Shareholders Social benefit " Trading " The Scottish Social Enterprise Coalition is the national collective voice for social enterprise in Scotland and we champion enterprising activity across the third sector. We are a membership-led organisation, representing the needs and views of a wide range of social enterprises, emerging social enterprises, their networks and trade bodies. Latest estimates are that there are approximately 3000 social enterprises in Scotland providing a combined turnover of around 2bn including co-ops, housing associations, development trusts, social firms and credit unions. Key sectors include culture, food, housing, recycling, retail and tourism. Financial and the Economy Background More than profit financial institutions such as credit unions and community development finance institutions (CDFIs) have seen a sharp rise in both the number of applications for business finance as well as a rise in the number they decline; while Coalition members tell us they find it more difficult to get overdrafts and loans from traditional credit providers. This is especially true for existing businesses with tight cash flow, start-ups and growth companies where the directors are asset-less. If an overdraft is being used on a regular basis this is termed hardcore. Banks are reducing hardcore overdrafts sometimes with only a months notice. Overdraft renewals are not automatic and high fees and a desire for more security to back the overdraft is prevalent, while those offered loans are finding the rates prohibitive. Furthermore, social enterprises that have factoring HYPERLINK "" \l "_edn1" \o ""  plus an overdraft but want to move their factoring to another cheaper provider can be told to repay the overdraft as the factored product partially secures their overdraft. This can make it difficult for businesses to get the best deals as well as reducing the overall choice of finance products available to the client. Supporting Scotlands Financial Sector Scotland has an extensive skill base in the financial sector that is not consolidated in our high street banking sector. The gradual move from Scotland of many of the decision makers (weakening of head quarters) could have negative long term affects for the Banking and Financial Sector in Scotland; however. The Government has a role in rebuilding Scotlands reputation as a financial sector by promoting ethical alternatives such as mutuals and credit unions. Scotland has 500 commercial co-operatives, co-owned businesses and mutuals with a combined 4.6bn turnover, 22bn of assets, 27,000 employees and more than 2.1 million members. Scotlands Credit Union sector has high growth potential and it must be supported to meet the growing demand that exists for community led banking for all Scots. The financial crisis has increased the demand for ethical banking with Credit Unions experiencing an increase in both membership and loan application, in particular middle & higher-income earners using credit unions for the first time. Public procurement In its 2008 Action Plan for an Enterprising Third Sector, the Scottish Government identified Community Benefit clauses as a key element of its policy of developing a sustainable third sector. The Scottish Social Enterprise Coalition sees Community Benefit Clauses (CBCs) as key to embedding social enterprises in public service delivery. CBCs are social clauses that can be included in public contracts to deliver a wider public benefit. For example, a construction contract may stipulate an apprenticeship or employment element. Public bodies such as housing associations are increasingly using their spending power to add value for the communities and citizens they serve, achieving added value through purchasing decisions and delivering on multiple outcomes. We very much welcome Glasgow City Councils adoption of CBCs in its 2014 Commonwealth Games infrastructure procurement process. We have been further encouraged by the Councils commitment to see CBCs spread across the rest of the Councils procurement delivery. All public bodies should work to raise the profile of CBCs with a long term view of central and local government to allocate 10% of the value of all procurement contracts for CBCs. In particular we are calling on parliament to support Introducing pilot contracts with CBCs (with social return on investment evaluations (SROI) undertaken as a prerequisite) in two or three key high profile annual events run by Business Club Scotland members to raise the profile of community benefit clauses. Working with the Scottish Procurement Directorate and ensure that all public sector purchasers have appropriate and regular training in the use of CBCs and Increase procurement officers' knowledge about the added value third sector providers. (A recent MORI poll comissioned by the Colaition found that over two thirds (67%) of people agreed that social enterprises should have a role in the delivery of public services, while a fifth (20%) disagreed.) Work with groups in council adminstration to make social enterprise explicit in their Single Outcome Agreements (SOAs); linking the procurment process to outcomes in SOAs. We also call for on all public bodies to meet the standards set by the Scottish Government and ensure all contracts should be paid within 10 working days.  Tender Forms Current local authoritytender form design does not allow for information inclusion on SROI rating, social enterprise status or ability to deliver on Single Outcome Agreement (SOA) indicators. A standard national form that allowed organisations to illustrate SROI rating and how they deliver on multiple SOA indicators would allow social enterprises the ability to demonstrate their added value and in turn allow public bodies to make cross budget efficiencies. Further public authority contracts should be extended where possible to assist longer term planning and security, and re-tendering without proper rationale and consultation should be avoided. Best Value Local authorities have a legal duty under the Local Government in Scotland Act 2003 to improve the services they provide. This is to enable a balance between cost and quality considerations in service provision, whilst ensuring ongoing value for money. Local authorities have proved they have grasped the concept of best value by not selling all available land for housing to private developers but earmarking sites for social housing from which they will receive a lower price. Coalition members report an overwhelming focus on the price of contract during the local authority tendering process. The Coalition recognises the difficulties faced by local authorities to balance the competing claims made by service providers about how they best fulfil obligations relating to best value. Comprehensive social auditing of the third sector and the tender form design suggested above would allow public bodes to readily identify how they can achieve best value in service delivery. Skills and Training Background Unemployment in the UK is now above two million for the first time since 1997. The number of people claiming Jobseekers Allowance is rising at a record rate. Many economists predict that unemployment will go above three million in 2010. However social enterprises are well placed to deliver employment related public services with their focus on beneficiary need over profit and the way the sector can effectively and actively engage with the most disadvantaged groups. They have a track record of developing a wide range of successful welfare to work projects, and help unemployed and economically inactive people to gain the skills and experience they need. Skills and Support Many individuals require extensive personal and practical support during their time on training courses and although this need may reduce during their time on a programme, it increases again once they move into employment. We recommend that Social Enterprise support bodies maintain contact with individuals who move into work for appropriate period of time. There is an urgent need to respond to the steady decline in jobs for those with low or no qualifications. The employment rate of low skilled people has fallen from 51.7% in 1997 to 49.4% in 2006 across the UK. Without continued emphasis on skills development, progression within the labour market is unlikely to be achieved by low skilled individuals. The private sector, with the third sector, must be partners with Government in returning the unemployed back into the labour market. Hence the Coalition believes employers should be incentivised and rewarded for re-skilling and employing the formerly long term unemployed. The Scottish Government must also tackle employers genuine concerns about hiring the low skilled or unemployed. We would welcome extending positive initiatives such as Renfrewshire Council s job rotation scheme which encourages companies to use the long term unemployed people take the place of employees released for training. Financial support is available to cover the salary and training of the unemployed individual as well as the training of existing employees. Tourism Background As many social enterprises are developed in reponse to specific need or as a result of genuine bottom-up community regeneration, they have a level of insight, of huge value to the Scottish Government as it sets out to achieve its key purpose and objective of achieving a 50% increase in revenue from tourism by 2015. There are three key areas were social enterprises can make a difference: Increasing the amount of revenue taken per tourist by offering a wide range of bespoke high value services while minimising the environmental impact. Increasing employee and customer engagement leading to a better quality visitor experience and more visitors from the local community. Ability to work in niche areas and complement the growth of existing public and private tourist offerings. We believe that in rural areas in particular social enterprises are well placed to increase tourism spend by providing bespoke packages, to tourists who value an individually tailored approach to the sharing of local knowledge, and will in turn pay a premium for this service. Additionally any income earned from tourism remains within the community. There is significant scope to build long term relationships with the local and international tourism market by promoting the value add that environmental sustainability and community regeneration provides. Social enterprises are well placed to offer a wide range of services which complement existing offerings from the private and public sectors and can do so while improving skills and service standards provided by staff who act as ambassadors for their area. Problems with Growth The skill set needed to grow the sector is not being adequately delivered by public bodies; further the stigma attached to many tourism based enterprises deters skilled workers from pursing this as a vocation. The tourism industry as a whole must a more attractive destination for skilled workers so that the sector can increase its capacity. Many within the Social Enterprise tourism sector believe the recession is making their organisations meaner and leaner. The drive to reduce costs and impose greater financial discipline has been a tough but invaluable lesson which will allow these organisations to grow and develop once there is an upturn in the market. With the necessary support from public bodies that are established to support tourism in Scotland (including the Scottish Government through procurement opportunities) and by focusing on providing bespoke packages, then we can make great progress towards a 50% growth in tourism spend. Third Sector Support the Third Sector The Scottish Government has invested 12 million in the Third Sector Enterprise Fund to help the third sector to contribute towards Scotland's success. The Fund aims to help established third sector organisations to become more sustainable and increase their capacity and capability. The 30m Scottish Investment Fund helps established Third Sector organisations secure a transformational step change in their capacity, capability and financial sustainability and the 1m Social Entrepreneurs fund is aimed at individuals who want to set up and run a business with a social or environmental purpose. The fund will provide financial and business support to help get new enterprises off the ground. The funding streams are a massive boost to the social economy sector in Scotland; however the opportunities for all of Scotland to prosper through increasing sustainable economic growth will only happen if there is continued support for an enterprising third sector. Promote democratic business models such as co-ops and mutuals Scotland has 500 commercial co-operatives, co-owned businesses and mutuals with a combined 4.6bn turnover, 22bn of assets, 27,000 employees and more than 2.1 million members. All public bodies, particularly the Scottish Government should be seen to be rewarding banks that operate according to some ethical code (probably voluntary) or that use positive ethical screening for investments, by banking with them. For example, Triodos Bank, which only lends to businesses and charities judged to be of social or ecological benefit and has of late has seen unprecedented growth. Local Government Protecting Jobs and Services Social Enterprise can play a huge role in not only the delivery but also the design of public services in Scotland. However there should be no sacred cows in local government, central government or any part of the public sector with regard to public sector jobs-they must only be maintained where there is a value to service users and the taxpayer. To improve the design and delivery of public sector services the social enterprise movement is not looking for preferential treatment from Ministers to build an enterprising third sector in Scotland, only parity of esteem. For example, after lobbying from the Scottish Social Enterprise Coalition, the Scottish Government hasselecteda consortiumto identify and then develop 10 Public Social Partnerships (PSPs). 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