Social Enterprise Strategy: Executive Summary

Social Enterprise Strategy: Executive Summary


Scottish Executive



The purpose of this strategy and action plan is to implement our vision for social enterprise in Scotland as a dynamic, sustainable and credible way of doing business, delivering services and actively improving our communities.


Social enterprises are ‘businesses with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or the community, rather than being driven by the need to maximise profit for shareholders or owners’ (DTI, 2002).


There are around 3,000 social enterprises in Scotland at different stages of development, from small startup enterprises to well-established businesses with multi-million pound turnovers. The turnover of these businesses has been estimated at around £1 billion a year, so they make a significant contribution to the Scottish economy.


Following a motion passed in the Scottish Parliament in May 2005, we – the Scottish Executive and its agencies – have carried out an extensive consultation exercise to produce this strategy and action plan. This strategy is the start of a process to create an environment where social enterprise can flourish. Social enterprise is a wide-ranging activity and links to a number of our priorities and previously published strategies.


Social enterprise is a way of doing business and it can be done at a variety of scales, locally and nationally. Some businesses work just as a social enterprise. In other cases, social enterprise is part of a wider activity, most usually as part of a voluntary organisation. Social enterprises are different from traditional voluntary organisations in that they deliver their social purpose mainly through trading or they aim to do so. There are a range of specific types of social enterprises, including community care providers, co-operatives, credit unions, development trusts, housing associations and social firms.


This strategy highlights the important contribution social enterprise can make to life in Scotland. This includes contributing to economic growth and business development;delivering services focused on the needs of people; regenerating and empowering people in our most deprived communities and playing a major role in supported employment.


Many social enterprises operating in Scotland are directly involved with delivery of aspects of Scotland’s sustainable development strategy, Choosing our Future, for example through waste recycling. This work helps to deliver social, economic and environmental benefits to communities and individuals.


In putting our vision into practice we have set out four strategic aims in the strategy.


Aim 1 Raising the profile and proving the value of social enterprise


There is a need to increase the profile of social enterprise to make sure it is widely understood as a way of delivering high quality goods and services. Related to this is a need to measure and communicate the added value that social enterprise brings. We are, therefore, proposing a number of actions to raise the profile of social enterprise.These include a marketing strategy and campaign, marketing and public relations training for social enterprises, promoting social enterprise in enterprise education; and measuring in more detail what social enterprise activity is taking place in Scotland.


Aim 2 Opening up markets to social enterprise


There is a need to make markets more accessible to social enterprises; including the public sector, commercial trading and social business markets. To help create an environment where markets are more open to social enterprise, we are putting in place a range of actions related to this aim. These include working with public organizations involved in public procurement. We believe that social enterprise has a contribution to make in supporting public service reform, particularly the fundamental aims of user

focus and greater efficiency; and in delivering Best Value. The strategy is also aiming to provide practical advice and training for social enterprises on securing contracts, develop the role of housing associations in social enterprise, and help the private sector get involved through networking events.


Aim 3 Increasing the range of finance available to develop social enterprise


There is a need for sustainable investment in social enterprise to maintain momentum. In particular, there is need for competitive loans and potentially other forms of investment, including those which adapt from past experience of funding private businesses. To achieve this, we recognise the need to work closely with banks, which are increasingly supportive of social enterprise, Social Investment Scotland and the

Community Development Finance Institutions. We will put in place a range of actions to achieve this aim. This will include looking at a range of potential financial solutions, such as meeting the gap between grants and commercial loans, testing out so called ‘patient capital’ models and considering the potential of further public support through programmes such as Futurebuilders Scotland and Wider Role. We will also commission a training programme for board members and senior managers of social enterprises on

finance issues.


Aim 4 Developing the trading capacity of social enterprises by providing better business



The strategy stresses that the right business support needs to be in place for social enterprises and those starting social enterprise activity. This support will also need to reflect the different stages a social enterprise will go through to become successful. There should be a range of options available for business support with some ‘mainstream’ business support available through the enterprise networks and other more specialized support also being available. As a result this strategy sets out a series of developments related to the Business Gateway service of Scottish Enterprise and also to the service offered to social enterprises by Highlands and Islands Enterprise. We will also commission a business support programme for lowland Scotland which aims to offer greater support for those organisations not yet developed enough to gain one-to-one support from local enterprise companies. We will also provide extra resources to local social economy partnerships to help them support social enterprise activities locally. Actions are also targeted at the development of learning products to help businesses develop and a brokerage service which will also provide support. These initial actions will take place between April 2007 and March 2008. We will then publish an update to this strategy in light of decisions taken during the Strategic Spending Review 2007, which will set Scottish Executive budgets from 2008 to 2011. The second phase will be informed by our monitoring of the impact of this first phase of support for social enterprise.


In summary, this strategy puts in place four strategic aims, with actions and resources attached, to start to put our vision of social enterprise into practice as a dynamic, sustainable and credible way of doing business, delivering services and actively improving our communities.