There seems to be growing acceptance in the UK that social business lacks investment to be able to compete at scale on a level playing field with the private sector. Over the last year there has also, it seems, been a slow but growing consensus that social business needs the equivalent of mainstream angel investment to be able to operate at scale in some sectors – especially where social investors don’t have the scale themselves!
This is especially the case in the critical sectors of sustainability and health where opportunities often have an entry floor in the range £10-100M. With forestry, biomass farming, or growing sustainable food at scale circa £5M, large community energy projects at £20M, sustainable housing or retro-fit/refurbishment sites at £20M+, and everything from GP Surgeries and local cottage hospitals to supported accommodation in the health sector – it is imperative that these essential developments are not left for global business to suck the value out of communities.
This has been noticed and commented upon by leading social entrepreneurs – as well as potential investors. There are, of course, fields of operation where it is possible to grow slowly without such investment strategies; and it is totally irrelevant to most small to medium local social enterprises – which still represent the vast majority of social economic activity in the UK. Yet it will be lamentable if organisations who are ready and able to go to scale and compete with the private sector are unable to do so.
Gone are the days when social enterprise was seen as that small and fluffy thing in the corner; with growth of around 10% and rapidly heading for 10% of UK GDP according to some figures, social enterprise is suddenly attracting the interest of a lot of serious investors. So it should! Social enterprise represents a better risk statistically than private sector organisations, and often works in sectors that are contractually very sound – if somewhat conservative in nature.
In order to provide a response to this demand from potential investors and social business, The Innovation Consortium CIC has been working with Trudy Thompson, Bricks and Bread CIC, for the last year to leverage mainstream investment into sustainability. Bricks and Bread (Investment) is a new social enterprise investment model founded to work directly with mainstream investment houses and investors to grow and fund sustainable business at scale; it will be formally announced at the RSA event at Hub Westminster on 7th March, and followed later in the month by a launch for investors in the city. Bricks and Bread (Investment) is not a social investment intermediary. It will fund projects directly – similar to mainstream investment “angel” approaches. It will only work with sustainability businesses; initially either using the Bricks and Bread social franchise model, or with trusted partners.
The aim is to act as a funnel for finance houses and individual investors providing:
· positive engagement with a wide network in the sustainability sector
· sustainability expertise filtering the best sustainability projects
· quality management input and entrepreneurship throughout the life of the projects
Above all, the objective will be to support organisations to go to scale and to ensure that they have structures fit for investment.
What the new organisation won’t be doing is imposing ridiculous and time consuming public sector style bidding processes. If you have an idea you will be able to connect directly with experienced social entrepreneurs with long and successful track records in scaling up business. They will provide the help you need at the earliest stage with your initial proposal, and continue to provide expertise and support for any project eventually funded.
The project has already attracted considerable attention among leading investors, many of whom are offering to recommend or provide direct support. Given that I have been banging on about this issue for over 5 years, it’s seems that the investment gap I experienced in my own work in frontline social enterprise and, more objectively, in my research at Cambridge, is about to be addressed – it feels like quite a change in the offing. And though £100M may sound a lot to some, it’s only a start – I can think immediately of four projects that could spend it all! There is opportunity to attain large scale social and environmental impact; produce modest surpluses and provide a solid, fair and equitable return for investors.
Posted on February 16, 2012
A great deal of heat and very little light is being generated about the NHS reforms with the debate largely focussed on the issues of increased competition and privatisation of the NHS. On the ground the reality is somewhat different. Which is the best part of the NHS: the part that regularly scores highest in patient surveys? The answer is almost always, the GP Surgery. It’s the part we love the best and feel most connection with; statistically is the most effective and cost-efficient. There is a real irony here which seems to have been missed by the media and even coalition Ministers – almost all GP Surgeries are private businesses and have been from the day the NHS was founded.
When we enter our local GP Surgery and see the NHS logo we can be forgiven for thinking we’re in the Public Sector. But the free service we receive at the point of delivery in GP Surgeries – the promise made post-war by the NHS – is largely achieved by contracting with private businesses and social enterprises. No-one, it would appear, is taking the longer or considered view of the proposed changes.
The principle of the Health & Social Care Bill is to put clinicians back at the forefront of leading and providing services for their patients – as it used to be in the NHS before layers of managers and commissioners were added in successive reforms starting over 35 years ago. This has to be right – it’s GPs who hear the demands and the complaints of patients across their desks every day.
The new Bill sets out to ensure that providers can deliver services in the same way as GP Surgeries do today. As long as the new system is simple and not weighed down with red tape, the best services will attract the most patients – judged purely on quality and performance, not price. This can only increase quality and performance everywhere as the best services are replicated and contracted to replace those that are poor or failing. Even these elements are not new, the policies and processes of Any Qualified Provider or Any Willing Provider has been around for many years; as has the Choose and Book system in the GP Surgery. But few patients either know about the options or have the confidence to insist upon their choice.
I am not suggesting that every clinician is excited by the prospect or that there are not misgivings about the burden of yet more changes, but if my own contacts in the fast-track commissioning groups are anything to go by, there are more than enough enthusiasts to make it work. It only takes a few professionals in each locality; GPs, GP Specialists, Nurses and Consultants, to serve on the committee to ensure success. Even this is nothing new, most localities have had Primary Care Groups for years – but PCGs didn’t have control of the budget or the authority that the new groups will have. The accusation of lack of management experience is a red herring; groups will have the same support as commissioners do now – and don’t forget GPs have been successfully running their private GP Surgery businesses for their entire careers.
As a social entrepreneur and strategist, I have worked as a specialist in this field for most of my life. Some of the most valued social care and community health initiatives are already run by the voluntary sector or social enterprises; the Healthy Living Centre movement has been largely credited to Blackthorn Trust, a GP Surgery in Maidstone, Kent. I have no doubt whatever, if social enterprise is given the chance it can delivery very high quality local health services to meet patients demands. To judge by the amount of support being requested across the UK, social enterprise just can’t wait for the Bill to be enacted; we can only hope that it survives without being mangled to the point of castration.
Posted on February 8, 2012
Social entrepreneur and strategist, Charles Bicker, argues that local democracy, and self-interest, may open the door to ethical, sustainable enterprises run for the community and by the community.
The Localism Act aims to put local people back in the driving seat of their own communities. It gives opportunities to run services; acquire land; develop resources – and even prevent what isn’t wanted. What’s more, the Act is underpinned with real bite –a democratic process at its foundation which empowers the local community and which includes such powers as the approval of Local Plans or to hold referendums on issues of concern.
Localism is bottom up: it’s up to local communities to use it! Some commentators have reflected upon the apathy of the electorate to cast doubt as to whether Localism will really take off, but perhaps they haven’t been on the ground at local level lately. As people have woken up to the possibilities, there has been a growing interest, not to say, enthusiasm- based on that most secure of foundations – self interest!
We live in a world where demand is rapidly outstripping supply of vital resources; energy prices are predicted to rise annually well above inflation – not to mention threats to energy security! What community would not be interested in local clean-tech energy production producing a surplus to fund community services and offering a sustainable energy supply at stable prices for the foreseeable future? Community owned and run, of course: community enterprise for the benefit of its members.
Now repeat this story for sustainable food production, water, heat, waste, re-cycling, health centres, home care, dentists, sustainable housing, local electric transport, education, sports and leisure centre – the list is as long as your imagination.
Such approaches contribute to the growing moral market as more people become disillusioned and disgusted with money markets and global businesses disconnected from the communities they should be serving. More importantly, local economies can increase sustainability from the ground up helping to heal the damage done to our precious planet – without waiting for a change in the lukewarm attitude of UK government. Not only do these new approaches give stable prices and security but local people will control the community enterprises involved as investors and members.
The Innovation Consortium is currently working with a number of Parish Councils who are writing ambitious self-financing Local Plans and forming community enterprises to develop and run activities.
Posted on January 30, 2012
The Innovation Consortium is currently working with Trudy Thompson, Bricks and Bread CIC, to leverage mainstream investment into sustainability. We have founded a new title, Bricks and Bread (Investment) which will launch in the city in March.
Bricks and Bread (Investment) is a social enterprise investment organisation founded to work directly with mainstream investment houses and investors to grow and fund sustainable business at scale.
It is not a social investment intermediary – with the additional costs and risks which that can involve. It will fund projects directly – similar to a mainstream investment “angel”. It will only work with sustainability businesses; either through the Bricks and Bread social franchise structure, or with trusted partners.
Our aim is to act as a funnel for finance houses and individual investors providing:
Posted on January 25, 2012
Associates of the Innovation Consortium are currently advising and supporting at national department policy level, 1st and 2nd tier local authorities, higher education, health and schools. Commissioning innovation to deliver services in the new economic climate is, not surprisingly, the biggest subject at the moment. However, this is rapidly being overtaken by “Localism” and the effects of the new Act. Given that TIC has several of the leading consultants on Localism as Associates, including the Ministerial Policy Adviser, we are fairly busy with this at the moment.
Our work supporting social enterprise is largely concentrated on sustainability (of course) and Localism – with a number of Parish Councils setting up locality social enterprises to take advantage of community approaches under the Localism Act. Once the new Health Bill passes things could get a bit manic. Meanwhile, we continue to work with mainstream City finance houses, offering social enterprise expertise; and we are pushing forward with our own investment fund proposal lead by Bricks and Breads (Investment).
Posted on December 30, 2011
The Innovation Consortium, has founded a new sustainability development organisation, Positively Useful. It will become a social franchise of Bricks and Bread and will act as the lead franchise in Kent for large scale projects such as large biomass generation; biomass growing; sustainable housing; large scale clean-tech retrofit and housing re-development; and permaculture growing. It will also act as a lead body for other local Kent Bricks and Bread franchises. In this way, Positively Useful will lead the “doing” – leaving The Innovation Consortium to continue as an impartial advisory body. There are some exciting plans coming up which we will announce as soon as we can.
Posted on December 28, 2011