Positive progress with social enterprises - but companies must do more

Emily Davies, Head of Social Impact
12 October 2018
Amey collaborating with RBLI.
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It’s been over five years since the Social Value Act came into force in late January 2013. The Act requires public service commissioners to consider the wider social, economic and environmental benefits possible when procuring services. For commissioners, it was a wake-up call for unlocking potential value from supply chain partners. For providers, such as Amey, it was an opportunity to diversify and differentiate service.

Amey’s purchasing power as a force for good

We have always had an intimate relationship with the communities we operate in, but only recently have we chosen to really focus our attention on working with social enterprises - organisations that trade purely to support their social mission.

Given our purchasing power - over half of our £2.5bn turnover goes directly to the supply chain - working with such organisations aims to create a greater positive impact in communities, long after roads have been built, railways have been laid and bins collected.

Real impact from working with social enterprises

There is significant impact we have already seen as an outcome of our long-standing partnership with the Forward Trust (previously Blue Sky) who deliver waste management services. The Forward Trust place ex-offenders in employment across our contracts, identifying staff from probation services, prisons, Job Centre Plus, and community groups.

To date, over 400 ex-offenders have been placed into our contracts and, where the national average for re-offending is generally 60%, the Forward Trust realised an impressive 15% re-offending rate.
To bring focus to our action, we joined the Buy Social Corporate Challenge (BSCC), an initiative developed by Social Enterprise UK (SEUK). This sees leading UK companies open their supply chains to social enterprises, with the aim of spending £1 billion by 2020.

Since joining in mid-2017, the BSCC has helped focus our commitment, raised awareness to our employees and wider stakeholders. Most importantly, it provided the leadership platform and network that’s needed for organisations to work together and really make a difference.

As a result, new to our order book is Belu, Recycling Lives, Clarity, Change Kitchen and Wild Hearts. Thanks to the latter, we now purchase our office stationary while simultaneously addressing gender inequality and supporting local entrepreneurship across the world.

Why doesn’t every company do this?

With no variation to cost or quality compared to for-profit suppliers, why wouldn’t every company take up these opportunities? For us, with our local and central government clients, it means every public pound goes further, creating savings on the likes of education, health and crime. For me, this goes to the heart of what the Social Value Act was intended to do.

The Government wants social enterprises to be embraced

As I review our progress against the BSCC, it was welcoming to hear David Lidington, Minister for the Cabinet Office, calling for public services to be delivered with social value at their heart.

It was a passionate plea to create a procurement process where the wider social benefits are recognised. To put these thoughts to action, he announced the Social Value Act will be amended to ensure that all major procurements explicitly ‘account for’ social value where appropriate, rather than just consider it.

This will hopefully mark a significant departure from the successful, but slightly loosely worded bill of 2013 and go some way to getting the best possible value for all stakeholders.

For now, the details of these evaluations remain a speculation but we for one, would welcome the opportunity of government-set targets for corporates to hit on social enterprise spend – or even better, the outcomes that are realised. Targets similar to those set for SME spend could give genuine direction to companies looking to spend more consciously and loosen the restraints that have stifled potential progress previously.

The Civil Society Strategy – creating a better future

I welcome the government’s new Civil Society Strategy – itself both highlighting the potential of the Social Act, emphasising the role of commissioning and highlighting the role private sector has in creating a future that works for everyone.

Part of the difficulty for social enterprises has been accessing the supply chain in the first place. I would call on companies to educate and inform teams – both within procurement and beyond to help social enterprises access the supply chain. Likewise, our focus should be demanding the same for our Tier One suppliers in consideration of their supply chains, going some way to the perceived barrier of corporate supply chain consolidation.

Critics suggest that targets will simply add unwanted competition in the market for already struggling SMEs. But the reality is that there are currently not enough social enterprises in the UK to threaten SMEs. We’re proud to work with over 1,180 medium enterprises, 1,700 small enterprises and 2,400 micro enterprises. Others suggest that imposing targets limits the free market nature of procurement and will lead to poor uneconomical practice. However, when run efficiently, social enterprises offer goods and services at a comparable price and quality as their private sector competitors.

The RBLI is a case in point

The Royal British Legion typifies this approach. A national charity supporting the Armed Forces, they have been our main supplier of highways signs in Kent since 2011. The RBLI, like any of our other suppliers, has had to go through supplier evaluation – proving themselves competitive, and commercially viable. Partnership is key – success means not only delivering on commitments, but working with us to solve problems and bring new ideas and innovation to the table. And it’s not one way – SEUK’s ‘State of SE Survey 2017’ reported some impressive diversity statistics, with 41% of being led by women and 34% with BAME directors – there’s much we can learn.

Creating an environment where social enterprises can flourish
For social enterprises, we would welcome long-term aspirations to use their community networks and ‘know how’ to diversify their service, meeting an increasing demand from businesses to want to ‘buy social’. I would also call on organisations, to work together to understand combined demand, providing secure and long-term opportunities for social enterprises to grow – work that SEUK is currently progressing alongside other BSCC partners.

The social enterprise of the future will provide services across every aspect of our business, generating greater margins and ultimately powering greater change. Change, that needs to be better quantified to provide the case and the evidence to do more. We acknowledge here at Amey more work needs to be done to understand this – and I look forward to working with our social enterprise partners to do just that.

Read more about how Amey works with social enterprises here.

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