Social Enterprise in Fife

Transcription

1 Highlands & Islands Enterprise/ Evaluation of the Community Capacity Building Programme Social Enterprise in Fife A report for Fife Council April 2014

2 Highlands & Islands Enterprise/ Evaluation of the Community Capacity Building Programme Index / 1: Social Enterprise in Fife 1 2: Scale 6 3: Structure 10 4: Geography 12 5: Sectors 13 6: Trading 15 7: Financial Strength 18 8: Looking Forward 21 9: Future Development 23

3 1: Social Enterprise in Fife This report presents the findings of a comprehensive study into the scale, scope and characteristics of social enterprise activity in Fife. Background Fife Council s Economic Development team is launching a new Social Enterprise Action Plan and wants to back this up with robust information on the scope and scale of the sector in Fife. Fife Council has commissioned Social Value Lab to undertake the mapping exercise. Fife Council will use the data gathered from this study to provide more targeted and efficient support for the social enterprise sector, to identify the gaps that exist; both the sectors covered and geographically across Fife in order that the Action plan focused on the correct areas to deliver improvements. Fife Council Fife is a peninsula bordered by the Firth of Tay, the North Sea and the Firth of Forth. It is the third largest populated local authority area in Scotland, with approximately 365,000 people living on an area of 512 sq. miles. Fife was once one of the seven Pictish kingdoms, and is still commonly referred to as the Kingdom of Fife. In the 19 th century, the industrial revolution saw the number of coal pits in the region increase ten-fold making Fife an increasingly attractive area for the unemployed. In 1878 the Tay Rail Bridge was constructed soon followed by the Forth Road Bridge in These structures highly improved trade routes between Fife and the cities of Dundee and Edinburgh. During the 20 th century and post-world War II, towns such as Glenrothes were created to house the workers of the new Rothes Colliery and Fife s population steadily increased. Fife is now a world renowned destination for tourists, with some of the world s most famous golf courses, beautiful beaches, excellent food and drink. Major industry sectors include Tourism, Energy and Manufacturing. Fife now boasts several arts and cultural events such as Scotland s International Poetry Festival, East Neuk Festival, Highland Games 1

4 and the Scottish Snowdrop Festival as well as the popular St Andrews Golf course which is a common venue for The Open Tournament. Today Fife s economy has approximately 9,000 businesses with an annual turnover of 10,312m, supporting around 163,000 jobs. The Fife Context Setting the scene Economy The Fife Economic Strategy sets out Fife s plan for future economic growth with three main strategic outcomes: a skilled workforce for the future, a competitive business location and business growth. Current key business challenges for Fife include: sectors dependent on public sector investment, perennially lower than national average level of business start-ups and selfemployment, an over-reliance on local markets and despite the presence of several international businesses, an overall lack of export value. One of the priorities of the Strategy is to support start-up and growth in order for businesses to improve their performance. Social enterprise provides a range of exiting new and developing businesses. Fife s Community Plan details how community planning partners will strengthen Fife s future to make Fife a great place to live, work, visit and invest. It emphasises the importance of improving the performance of Fife s economy. It is estimated that during the economic recession of 2008/2009, Scottish GDP contracted by 5.9%. However, short-term forecasts have reported a slower recovery rate in Scotland compared to the rest of the UK. The Plan aims to: invest in sectors of the economy with long term sustainability, create more dynamic businesses, enable people to find employment and provide a flexible business infrastructure and responsive services. One of the main ways the partners aim to achieve this is by supporting alternative ways of delivering services in partnership with businesses, voluntary organisations, social enterprises and communities. The Council Plan explains how Fife Council plans to meet the challenge of delivering excellent public services against a backdrop of austerity budget savings and a rising demand for services. It includes the main target of growing a vibrant economy by 2017, including opportunities for young people and those furthest away from the labour market. One of the Key Activities under this target is Improving the ability of local social and private enterprises to compete for council contracts. It is clear that social enterprise has a role to play in the development of a vibrant economy in Fife. Community There are a number of policy initiatives that change the landscape in which social enterprises operate. The Christie Commission report 4 was published by the Scottish Government in It sets out the essential reform agenda for public services to meet a growing demand caused by changing demographics. The report recommends that the system of public 1 The Fife Economic Strategy Growing a Vibrant Fife Economy, Fife Council and the Fife Economy Partnership, Fife s community Plan , Fife Partnership Strengthening Fife s Future, July 2013 edition. 3 Fife Council Plan , Fife Council, May Commission on the future delivery of public services, 2011, ISBN:

5 services public, third and private sectors must become more efficient by reducing duplication and sharing services wherever possible and advocates a partnership working that is prevention focused across Scotland. The report also stresses the need for public services to become outcome-focussed, integrated and collaborative. In 2014 the Community Empowerment legislation 5 was put in front of Parliament. The aim of this Bill is to empower community organisations through asset transfer of land and buildings and to strengthen their voices through the introduction of the Right to Request (to participate in decisions how services are planned and delivered). The report also provides a statutory basis for community planning partnerships, and places duties on them around the planning and achievement of local outcomes. The Scottish Government has set a process in motion to reform procurement as a result of the Christie Commission, culminating in the Procurement Reform (Scotland) Act This act places a duty on public agencies to consider the wider social impact of each procurement process. Support mechanisms have been provided by the Scottish Government to assist the implementation of this legislation, including the support provided by Ready for Business. The Welfare Reform Act changes the existing welfare system fundamentally. Amongst these modifications were the Bedroom Tax and the introduction of Universal Credit. The Act has emitted negative public reactions across Scotland and the Scottish Government is actively promoting and supporting initiatives that mitigate against the negative impacts of this legislation. For Fife the Scottish Index of Multiple Deprivation (SIMD) shows that in 2012, 58 (12.8%) of Fife s 453 data zones were found in the 15% most deprived data zones in Scotland compared to 51 (11.3%) in 2009, 47 (10.4%) in 2006 and 34 (7.5%) in The level of employment deprivation in Fife is around the same level in Scotland as a whole. In the employment domain, 12.8% of the population of Fife aged were employment deprived. This compares to 12.8% across Scotland as a whole 7. Fife s Community Plan 8 sets out its intentions to empower communities to respond to present and future challenges facing Fife. The Plan aims to reduce inequality, positively change working lives, improve efficiency with the reduction of public sector budgets, and improve local services. The three high level outcomes of: reducing inequalities, increasing employment and tackling climate change are the key areas of focus. The accompanying Single Outcome Agreement sets out detailed outcome targets on creating employment, reducing inequality, improving health, reducing poverty, creating affordable housing, improving the environment and strengthening local decision making powers. Social enterprise can make a huge contribution to achieving these. The Council Plan 9 acknowledges that although increased budget cuts may have a negative impact, it is highly important to focus on improving the quality of life in local communities in Fife. 5 Community Empowerment (Scotland) Bill 6 The Scottish Index of Multiple Deprivation 2012, SIMD 2012 Local Authority Summary Fife, The Scottish Index of Multiple Deprivation 2012, SIMD 2012 Local Authority Summary Fife, Fife s Community Plan , Fife Partnership Strengthening Fife s Future, July 2013 edition. 9 Fife Council Plan , Fife Council, May

6 enterprises participating in trade events and linking the sector into the existing business support that exists at a local (i.e. Business Gateway Fife) Fife Council s role will be to promote the sector, import best practice and work with national stakeholders to create a stronger framework and network of support. A main area will also be to foster closer collaboration between Social Enterprises. Conclusion The council has identified 20 outcomes as priorities that fit into the 4 categories of: Promoting a Sustainable Society, Increasing Opportunity and Reducing Poverty and Inequality, Improving Quality of Life in Local Communities and Growing a Vibrant Economy. Social Enterprise A Social Enterprise Development Operational Action Plan for 2015/16 10 is currently in development by the Economic Development team is outlining activity for implementation that will work towards achieving the development, improvement, support and stimulation of the social enterprise sector. The development of social enterprises ties in with the aims of the Fife Economic Strategy and Fife s Council Plan One of first actions detailed in the Plan included the carrying out a mapping survey in order to determine a baseline size of sector, the economic level, geographical spread and range of activity undertaken, numbers of staff and volunteers employed. Social Value Lab carried out this exercise in the last quarter of 2013, the methodology is explained in the next section The plan covers the promotion and delivery of specific themed business development events in the areas of logistics, leadership, access to finance and key motivational themes as well as a focus on increasing the number of social The economic downturn, the resulting public budget reductions and the Welfare Reform agenda are putting a strain on the third sector and are affecting services across the Fife. On the other hand the procurement reform agenda, personalisation and the integration of health and social care offer opportunities for enterprising third sector organisations. Fife now boasts a significant number of social enterprises and enterprising third sector organisations that are committed to their role in creating a stimulating and prosperous community throughout Fife. Social enterprise is enjoying an increasingly substantial public policy profile as an alternative to private or public services and the sector is well placed to deliver on Fife Council and its public sector partner s objectives of growing the economy and reducing inequality. Mapping Social Enterprise The mapping study consisted of three key elements. 1. Identifying the population From the data available from the Company Register (Companies House) and the Charity 10 Social Enterprise Development Operational Action Plan April 2015 March 2016, Fife Council Economic Development, Developing the Social Enterprise Sector in Fife, Fife Economy Partnership,

7 Register (OSCR) a comprehensive long-list of potential social enterprises was composed. By reducing double entries, applying our social enterprise selection criteria and financial data from the organisation s annual accounts (where available) the list was reduced to a definite list of 167 social enterprises in various states of development. 1,442 Charities 1,427 Companies Financial data SE Criteria Defining Social Enterprise Agreeing a clear definition of social enterprise was a key element of this study. Social Enterprise UK describes it as follows: Social enterprises are businesses that trade to tackle social problems, improve communities, people's life chances, or the environment. They make their money from selling goods and services in the open market, but they reinvest their profits back into the business or the local community 11. The most commonly accepted definition used in Scotland is set out in the five criteria of the current Senscot Voluntary Code of Practice : A social enterprise: 2.. Survey A survey of the social enterprises was conducted to get a detailed sense of the activities, impacts, geographic reach, trajectories, growth intentions and barriers, innovation and support needs of social enterprises. In total 38 social enterprises responded to the survey. 3. Financial Anal nalysis 167 Social Enterprises Finally, an in-depth financial analysis was conducted of the annual accounts and the other financial data gathered to establish a set of financial ratios covering profitability, earned income, self-sufficiency, liquidity, reserves, assets, etc. Exists primarily to achieve social and/or environmental benefit. Reinvests any profits back into the business or for the people it exists to serve. Locks all assets into the business and on dissolution redirects these appropriately. Aspires to financial independence through the money it makes from trading. Operates independently of direct control from public authorities. Social enterprises are driven by a common set of values and principles based on fairness, democracy, empowerment, collaboration and mutuality, which sets them apart from the private sector. Their entrepreneurial spirit and their ability to generate income through

8 trading distinguishes them from the voluntary sector. 6

9 2: Scale The social enterprise sector contributes to the local economy on a significant scale and provides employment for many people in Fife. A Quick Headcount Applying our definition of social enterprise to companies and charities has revealed there are 167 social enterprises that have their main base in Fife. 167 Social Enterprises Cutting Across Sectors Social enterprises are part of the third sector as well as the business community. They differ from private sector businesses through their ethos, their social purpose alongside business objectives, the reinvestment of profits and an asset lock. Social enterprises share much of the ethos and social purposes with the voluntary sector but differ from them by their entrepreneurial spirit and their desire to be financially independent. 1,442 charities 1,427 businesses 167 Social Enterprises 7

10 Financial Power The social enterprise sector makes a substantial contribution to the Fife economy. The social enterprise sector has a combined income of 26.9m, a spending power of 26.8m and total assets of 15.1m. A Significant Employer The social enterprise sector supports an estimated 2,502 jobs 12, which makes it a serious generator of employment. Public administration, education & health 43,300 jobs Total Income 26.9m Total Spending 26.8m Total Assets 15.1m Wholesale and retail 20,000 jobs Financial services 15,800 jobs However, the collective wealth and financial power is not spread equally across the sector: Manufacturing 15,200 jobs The largest 10% of the social enterprises in Fife count for 60.2% of the total income. Tourism Construction 8,400 jobs 7,000 jobs The largest 10% of the social enterprises in Fife count for 60.1% of the sector s total assets. ICT 4,100 jobs Transport 3,300 jobs Social Enterprise 2,502 jobs Energy and Water 2,100 jobs 12 Inclusive of housing associations and national organisations. This is based on detailed information from the annual accounts and survey responses of 38 of the social enterprises. For the social enterprises without any information, we have conservatively used the average of staff of the 70% smallest social enterprises (3.9 staff member per company). Other employment figures are from NOMIS Labour Market Profile Fife, Employee Jobs by Industry (2013). 8

11 Good Employers Social enterprises aim to be good employers that promote equality, decent working conditions and fair pay. The National Living Wage (NLW) is calculated annually by the Centre for Research in Social Policy (CRSP) at Loughborough University, based on what households need in order to have a minimum acceptable standard of living and includes things such as food, clothing, rent, council tax, fuel for heating homes and childcare (if applicable). Do you pay the national living wage to all staff? Yes 67% No 33% Do you operate zero-hours contracts? The current NLW is 7.85 per hour (2015). More than two thirds of the social enterprises (67%) do pay at least the NLW. Main Objective Yes 11% Zero-hours contracts are contracts in which the employer is under no obligation to provide their employee with working hours or for employees to accept them. Only one in ten social enterprises uses these forms of contract. Main Objectives No 89% Volunteering Social enterprises often have volunteers involved in the delivery of their services. Excluding Board members there are an estimated 1,336 volunteers active in Fife s social enterprises, putting in an average of 21,376 hours per month. The volunteers working within the Fife social enterprise sector bring an estimated 2million economic value to the area. 1,336 volunteers 21,376 hours per month 2,01 01m economic value 9

12 Business for Common Good Social enterprises differentiate themselves from private sector businesses through having social, cultural and/or environmental purposes that intend to contribute to the common good. Is your main objective social, cultural or environmental? This social purpose can be achieved as a result from their main activities (e.g. recycling, providing services to vulnerable people), through the people it provides employment, training or volunteering opportunities for (e.g. social firms) or through the use of the proceeds from trading (e.g. charity shop). Social 71% Environmental 13% Cultural 16% They have ethical values including a commitment to local capacity building, and they are accountable to their members and the wider community for their social environmental and economic impact. Profits are then reinvested back into the enterprise and community to further benefit local residents. In Fife, 71% of social enterprises described their main objective as social, 16% stated a cultural objective and 13% stated an environmental objective. 10

13 3: Structure Social enterprise can come in a range of organisational types and legal structures. Organisational Form Social enterprises can come in many different shapes and sizes, but they tend to take a number of organisational forms. Some of these forms are dictated by legislation (e.g. housing associations, credit unions), others by business models (social firms, development trusts). Legal Structures Companies Limited by Guarantee. A standard legal Housing form which limits Development members individual Associations liability, enshrines Trusts social mission in Memorandum and Articles, and eliminates shareholding and therefore Trading profit distribution. Credit Charities Unions Community Interest Company (CIC). A specially regulated legal form introduced Co-operatives operatives in 2005 specifically for social enterprises. Social Firms They are limited companies, with special Voluntary additional features that certify their social Organisations mission, lock in assets, and limit dividend payments to members. There is no mandatory legal structure for social enterprises; therefore they come in many different guises. Three quarters of social enterprises in Fife are incorporated in some form (74%). There are also eight recently established Community Interest Companies (CICs) that have not started trading yet and are therefore not included in this mapping exercise. 11

14 167 Social Enterprises different organisations and perhaps because of this, some do not identify as such. Unincorporated (26%) Association (44) SCIO (6) IPS (15) Incorporated (74%) Company (96) Other (6) It is also a relatively new term, and some organisations are simply more comfortable sticking to the language CIC (4) associated with their roots (e.g. a charity ), business model (e.g. a social firm ) or field of activity (e.g. a social care provider ). Industrial and Provident Society (IPS). A well-established legal form for cooperatives and community benefit societies, which ensures democratic ownership and control by members. Scottish Charitable Incorporated Organisation (SCIO). An optional new legal form for registered Scottish charities, introduced in April Enables small enterprising charities to become a corporate entity able to enter into contracts, employ staff, incur debts, own property, etc. Age of social enterprises in Fife 25+yrs 20% <1yr 2% 1-2 yrs 13% 3-5yrs 14% Charitable Status Charitable status can be awarded by the Scottish Charity Regulator (OSCR) to organisations that have exclusively charitable purposes and exist to pursue public benefit. Over two thirds of the social enterprises in Fife (68%), hold charitable status. 68% A Common Identity? Hold charitable status. The term social enterprise has a variety of meanings and definitions for However, almost twothirds of the organisations (63%) identified as social enterprises do classify themselves as such. This is favourable compared to earlier mapping studies in Glasgow (53%) and Dundee (43%). Age 10-25yrs 29% The average age of a social enterprise in Fife is 15.5 years with most organisations (29%) aged between years and only 2% of social enterprises less than 1 year old. 5-10yrs 22% 12

15 Charitable Status Company & Charity Company Only Charity Only Is social enterprise a term that your organisation uses to describe itself? YES NO 63% 37% 13

16 4: Geography Fife is home to social enterprises that are tackling social need in the area,, as well as those operating on a national or international level. Coverage Some social enterprises serve the local community, while others are based in Fife, but work throughout Scotland or even internationally. The majority of social enterprises (79%) are active in Fife, and the majority of them (43%) focus on business and service provision for their local area. One area of Fife 43% Across Fife 36% Internationally 4% All of UK 3% Across Local Authorities 10% All of Scotland 4% Spread Across Fife 4% 11% 5% 7% Social enterprises in Fife are quite evenly distributed with the highest percentages residing in Kirkcaldy (KY1, 11.4%), Cupar (KY15, 11.4%), and Lochgelly (KY5, 10.8%). Dunfermline that covers postcodes KY11 and KY12 has up to 15% social enterprises. There are two areas, Elie (KY9) and Kinross (KY13) that have no social enterprises. 3% 0% 2% 8% 7% 5% 0% 6% 6% 6% 11% 8% 11% 14

17 5: Sectors Social enterprises operate in all sectors of the economy. Impact across Sectors Social enterprises provide goods and services that tackle social, economic and environmental issues and thus strengthen communities and change lives. Child Care (18.5%), Social Care (16.8%), Arts and Culture (10.7%) and Environment and Recycling (10.2%) are the main sectors that social enterprises are most active in. Housing and Regeneration Housing associations or Registered Social Landlords (RSLs) are among the larger and more established social enterprises. There are four RSLs based in Fife. Apart from offering affordable houses for social rent RSLs usually also deliver other community and regeneration services. Housing associations are a major provider of employment, make a healthy surplus and are asset rich. Because their large size and economic impact Housing Associations are excluded from any financial analysis in this study to provide a more realistic picture of the sector (unless otherwise stated). Sector Percentage Childcare 18.5% Social Care 16.8% Arts and Culture 10.7% Environment and Recycling 10.2% Community Facility 6.6% Health 6.0% Housing and Homelessness 5.4% Local Area Regeneration 5.4% Other 5.4% Financial Services 3.6% Education 3.0% Sport & Leisure 3.0% Employability 2.4% Travel and Tourism 1.2% Transport 1.2% Food and Catering 0.6% 430 employees m income 4.5m surplus m Fixed Assets m Net Assets 15

18 National Organisations There are three large social enterprises that deliver services on a national scale and have their headquarters in Fife. These are large organisations with a large turnover and significant assets. Because they deliver only a small amount of their activities in Fife these national organisations are excluded from any financial analysis in this study (unless otherwise stated). 410 employees m income 1.5m surplus m Fixed Assets m Net Assets 16

19 6: Trading Social enterprises aspire to be financially independent through trading. Trading for Good Social enterprises differ from the rest of the third sector by trading. This can be through selling goods or providing services directly to the public or by delivering contracts or Service Level Agreements for public or other agencies. Almost all social enterprises (99%) are involved in some form of trading 13. However, almost twothirds (65%) are also dependent on grant funding. Of the total income of the social enterprises 37% is from trading, 48% from grants and 15% from other sources (e.g. donations, fundraising, investment income, legacies, etc.) 14. Enterprise Lifecycle There is a difference in the proportion of income from trading throughout the sector. This ability to generate income from trading is an indication of where the social enterprise is in its lifecycle and how successful it is in its 13 The remaining 1% is not trading yet. 14 It should be noted that the relatively high amount of Other Income from one national enterprising third sector organisation, based in Fife. 17

20 aspiration to become financially independent. In total the sector earns an estimated m per year from trading. There is a relative large group of organisations (61.2%) that generate more than half of their income from trading and can be seen as the core group of mature social enterprises. There are 12 social enterprises in Fife whose income comes from more than 90% trading, and for six of these all income is from trading k Trading income generated by a typical social enterprise MATURE 61.1% >50% income from trading ASPIRING 6.3% % % income from trading START-UP 32.6% <25% % income from trading 9.3m Combined trading income social enterprise sector 18

21 Delivering Contracts A contract is a legally binding agreement under which one party delivers goods or services for an agreed price. The sector is rather divided regarding attitudes to contracting. Over half, 56%, of the sector is currently delivering or negotiating contracts whilst for 22% it is not (yet) relevant and the other 22% are getting to understand contracting. Currently delivering contract(s) Engaged in negotiating contract(s) Investigating contracting opportunities Getting to understand the contract culture Not needed to look into these issues yet Contracting not relevant at all 0% 10% 20% 30% 40% 50% 60% Almost three quarters (74%) of social enterprises deliver contracts for the public sector (Council, NHS). This reflects the developing policy environment to increase the share of the third sector in public service delivery. 80% 70% 60% 50% 40% 30% 74% 20% 10% 0% Public body 11% 15% Private enterprise Third sector/social enterprise 19

22 7: Financial Strength A successful social enterprise needs to be, first and foremost, a successful business. The sector needs to be financially viable in the short term and sustainable in the longer term (please note: the ratios in this section are exclusive of housing associations). ions). Profitability Social enterprises need to make profit to stay afloat and further their social mission. The short term financial stability is also affected by the ability to collect outstanding invoices, which is 41 days on average. The last year the sector made a total loss 146k (including housing associations and national organisations there was a profit of 5.8m). The overall profitability ratio of the sector was -0.6%. The Cost of Staffing % Profitability Ratio The percentage of profit for each 1 income after taking account for all expenditure Formula: Net Surplus / Total Income For most social enterprises, staffing is the largest expense. Currently social enterprises in Fife spend just over half of their expenditure on salaries for their employees. Liquidity Liquidity is an important measure of financial health. It expresses the ability of the business to pay its short-term debts out of its current assets. A Current Ratio of 3.96 means that social enterprises are reasonably healthy at the short-term (1 year). 51.6% Staffing Cost Ratio The percentage of expenditure that is allocated to staffing Formula: Staffing Cost / Total Expenditure 20

23 days Current Ratio depend on a mixture of income streams, including earned income, grant funding and other income such as interest, donations, legacies, etc. Indicator of the ability to meet The social enterprise sector in Fife short-term term obligations earns almost 9.3m per year through trading and contracting, mostly with Formula: Current Assets / Current Liabilities the public sector, including Fife Council. Debtors Turnover Ratio How long it takes for debtors to pay their accounts The sector is able to earn about 43% of what it needs through trading. Formula: Debtors / Total Income *365 Balance Sheet The balance sheet provides information about the remaining net worth of the sector after all debts have been paid off. The balance sheet records all economic resources (assets) available to a company and offsets these against all its obligations (liabilities). Current assets can be easily converted into cash (e.g. cash in hand, short term debt). Current liabilities are obligations due in the next 12 months. Fixed assets take longer to convert into cash (e.g. property, equipment) and long-term liabilities are those amounts due over more than 12 months. The net assets of the sector amount to 15m (including housing associations and national organisations 101m). Self-sufficiency Although striving for independence through trading, social enterprises 21

24 Fixed Assets Current Liabilities 11m m Current Assets - Long Term Liabilities 10 10m 3.5m = Net Assets 15m 43.0% Self-sufficient Ratio Indicator of how able the sector is to cover its cost through earned income. Formula: Earned Income / Total Expenditure 53.6% Grant Reliance Ratio Indicator of the reliance on grant funding. Formula: Grants / Total Income 22

25 Financial Sustainability Surplus income from trading can be added to the reserves and be used for investments in the future or to keep as a buffer for bad times. The Survival Ratio shows that the sector has built up significant reserves and can survive almost a year without earning any income wks Survival Ratio Indicator of how long social enterprises could survive with no income. Formula: Total Unrestricted Reserves / Total Income Summary The social enterprise sector in Fife is making a small loss at the moment. The sector s short term debts are well covered by its current assets. In the longer term, the sector has considerable assets, and could survive almost two years without income, although the majority of these assets is concentrated with a small number of organisations Please note that this ratio refers to the whole sector and does not tell anything about individual organisations. 16 See note 15

26 8: Looking Forward Social enterprises operate in the real world and are not immune to the economic downturn and austerity measures. This section draws on the survey responses of a sample of o f 38 social enterprises. The Impact of the Economy The recent economic downturn has had a varied effect on social enterprises. For some it spelt disaster, for others there were opportunities. For almost half of the social enterprises in Fife (44%) the economic downturn How has as the economic climate over the last 12 months affected your organisation's Positively Negatively had a negative impact on their business. Almost the same amount of social enterprises (47%) were unaffected whilst a small group (6%) experienced a positive effect. Barriers to Growth There appear to be several restricting features that hold back growth for social enterprises. People issues such as time pressure and a lack of capacity seem to be the most common obstacles as well as financial issues and difficulties in securing contracts. 6% 44 % Neither positively or negatively Don't know 3% 47 % 24

27 Main barriers/obsta Positive about the Future People Finance Trading Market Even though Scotland is still feeling the effect of the recent economic recession, businesses are optimistic and confidence appears to be high for social enterprises in Fife with most enterprises assuming positive outcomes in the future. Premises Measuring Impact Uncertainty Awareness Support Legislation 0% 20% 40% % of Social Total Income Increase 68% No Change 24% Decrease 6% Don t Know 2% Geographic Reach Increase 33% No Change 61% Decrease 6% Don t Know 0% Collaboration Increase 85% No Change 9% Decrease 3% Don t Know 3% Contracting Increase 59% No Change 21% Decrease 3% Don t Know 17% Service Demand Increase 85% No Change 9% Decrease 3% Don t Know 3% Grant Reliance Increase 15% No Change 38% Decrease 41% Don t Know 6% Trading Increase 71% No Change 18% Decrease 6% Don t Know 5% Costs Increase 79% No Change 12% Decrease 9% Don t Know 0% Workforce Increase 68% No Change 21% Decrease 6% Don t Know 5% 25

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29 9: Future Development This Section shows the plans of Fife Council for the development of the social enterprise sector. Closer working arrangements between Fife Council, BRAG Enterprise and Business Gateway Fife are being fostered through both formal and informal methods. Provide advice and guidance to individuals and communities wishing to start up a social enterprise. The business support stakeholders are now focused on an approach that will help clear the clutter and duplication that currently exists, working together to increase the strength, scope and reach of the sector. Support the Fife Social Enterprise Network (FSEN). Increase the number of social enterprise start-ups and aid the expansion of existing businesses. Fife Council is also looking to strengthen its relationship with national stakeholders. This local partnership approach will focus on a range of strategic objectives: Promote the Social Enterprise Sector in Fife. Stimulate existing social enterprises to identify opportunities for growth. Support existing social enterprises to become more enterprising and commercial in nature. Improve the management capacity within the sector. Improve awareness of support services available to the sector. Fife Council has also identified a number of actions to achieve these strategic objectives, including: Utilise partner marketing and communication channels to promote the sector. Continue to promote and deliver specific themed business development events on areas such as logistics, leadership, procurement from the public sector, access to finance and key motivational themes. Increase the number of social enterprises participating in existing business support programmes and trade events such as the Market Development and Supplier Development programmes. 27

30 Encourage social enterprises to develop first step capability in markets, such as public sector related procurement opportunities. Support social enterprises to improve their investment readiness and understanding of financial engineering models. Identify opportunities for development from the Curriculum for Excellence, linking to the Culture of Enterprise. Identify actions that would improve the ability of social enterprises to strengthen their businesses in preparation for the future care commissioning environment. Identify the impact and best practices adopted in areas where self-directed care policies have already been introduced. Actively participate in the Local Authority Network Forum. Improve knowledge transfer through stakeholders support services to social enterprises. Work with national stakeholders. Work across Fife Council Services to develop a roadmap for social enterprises to aid the smooth transfer of Fife Council assets to the community. 28

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