more_for_your_money

morefor your money

a guide to procuring from social enterprises

More for your money – a guide to procuring from socialenterprises has been produced by the Social EnterpriseCoalition and the New Economics Foundation (nef ). It was written by Jeremy Nicholls, Justin Sacks and Matthew Walsham, with editing and production management by Olivia Klevan.

The Society of Procurement Officers in Local Government(SOPO) supports this document for all its members to usewhen deciding to innovate and create better procurement for the community.

Further copies of the guide are available from the Social Enterprise Coalition atwww.socialenterprise.org.uk/procurement

First edition 2005, reprinted with revised case study 2006.

M o r e f o r y o u r m o n e y 1

Liverpool CityCouncil 10

Nottingham CityCouncil12

Lincolnshire CountyCouncil16

Tower HamletsCouncil18

Ealing Council20

Camden Council22

Contents

2 What’s this guide about?

4 What are social enterprises?

7 Why buy from a social enterprise?

Meeting more than one objective

A competitive advantage in certain areas

Delivering innovative solutions and stimulating new markets

24 What can you do?

Find out what already exists

Build a supply base

Take a strategic approach

32 Conclusion and checklist

34 Further resources

2 W h a t ’s t h i s g u i d e a b o u t ?

More for your money – a guide to procuring from socialenterprises is a short guide to achieving better outcomesfrom public sector procurement and how socialenterprises as suppliers can help you achieve this. It isprimarily aimed at local authorities but the issues raisedare relevant to any public body that purchases goods andservices. If you are responsible for procurement decisions(including the financial or legal side), or involved indeveloping procurement policy, then this guide is for you.

It includes case studies that illustrate how contractingwith social enterprises has benefited a range of localauthorities. Although much of the guide refers to theprocurement environment in England, the principles ofsuccessful procurement from social enterprises applyequally in Scotland, Wales and Northern Ireland, and thisguide complements work taking place across the UK.

This guide does not suggest that social enterprisesshould have an unfair advantage over other suppliers inthe bidding process. Rather, that social enterprises have avaluable part to play within the context of a diverse rangeof suppliers. Of course, they will have to prove this to you,the buyer.

This is only a short introduction to procuring from socialenterprises but there are a range of resources available ifyou want to take the next step. The Further resourcessection (page 34) contains details of other publicationsand organisations that can provide specific information and advice.

The guide explains:

why you shouldconsider buying goodsand services from asocial enterprise;

what you can do to encourage socialenterprises tosuccessfully competefor contracts.

What’s this guide about?

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W h a t ’s t h i s g u i d e a b o u t ? 3

Although every business is unique, there are a number offeatures that all social enterprises share. Core to every socialenterprise is the trading of goods and services. Although grantsare an essential source of start-up funding and capital for manysocial enterprises, and may in some cases supplement ongoingtrading income, social enterprises are fundamentally aboutbusiness approaches to achieving public benefit.

All social enterprises have defined social or environmentalobjectives. Many businesses would consider themselves tohave social objectives, but social enterprises are distinctivebecause their social or environmental purpose is central to whatthey do. For example, whilst The Big Issue is a business, itsoverriding purpose is to address the problems of homelessness.

Social enterprises are also characterised by their ownershipstructures. Unlike most private enterprises, whose ownership is often determined by shareholder investment in the business,social enterprises can be owned by their users or customers,their employees, the wider community, trustees, public bodies,or a combination of different stakeholder groups.

There are many routes into social enterprise. Some socialenterprises, like leisure trusts and social care providers, arecreated by externalising in-house local authority services.Others are set up from scratch by a social entrepreneur with avision. Many social enterprises are charities, either trading inline with their core charitable purpose, set up as independenttrading arms, or exempt charities such as industrial andprovident societies. A lot of successful social enterprises havealso emerged from the voluntary and community sector. Butwhat all social enterprises share, however they were created,

Social enterprises arebusinesses that trade with a social and/orenvironmental purpose.They operate across anincredibly wide range ofindustries and sectors,from social care andrecycling, to fair-trade andfarmers’ markets. Wellknown examples includeThe Big Issue, Cafédirectand Jamie Oliver’srestaurant, Fifteen.

4 W h a t a r e s o c i a l e n t e r p r i s e s ?

What are social enterprises?

is an enterprising, business-based approach to achieving social and environmental aims.

The social enterprise sector is extremelydiverse, encompassing co-operatives and othermutuals, development trusts, communityenterprises, housing associations, footballsupporters’ trusts, credit unions, Social Firmsand leisure trusts, among others. As a resultsocial enterprises use a wide variety of legalforms, the most common of which are thelimited liability company (either companieslimited by guarantee or by shares) and theindustrial and provident society (the form for co-operatives and community benefitsocieties). There is now also an additional form of limited liability company designedspecifically for social enterprises, theCommunity Interest Company.

W h a t a r e s o c i a l e n t e r p r i s e s ? 5

No, some are very large indeed. For examplethe Co-operative Group turns over £7.8bnannually and Eaga Partnership, a worker-owned business that delivers the Warm Frontprogramme, turns over £300m. There arealso a growing number of social enterpriseswith multi-million pound turnovers and astrong track record in delivering contracts for local authorities. Examples includeGreenwich Leisure Ltd, ECT Group andSandwell Community Caring Trust.

While it is true that there are lots of smallersocial enterprises, both the NationalProcurement Strategy for Local Governmentand the SME Concordat (developed as aresult of the National Strategy) highlight thevalue for money SMEs often deliver. Thegood practice guidance accompanying theConcordat emphasises the range of benefitssmaller providers bring. They can:

often respond quickly and flexibly to customer needs;

act as a source of innovation, ideas and products;

offer cash savings, improved quality,service and effectiveness; and

access hard to reach customer groups.

But if you’re still not convinced, take a look at the case studies throughout theguide which demonstrate why some localauthorities are working hard to give socialenterprises a chance.

Aren’t social enterprisesalways small?

6 W h y b u y f r o m a s o c i a l e n t e r p r i s e s ?

Hackney Community Transport

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‘Their willingness to innovate and adapt has provided arefreshing insight into the opportunities and benefits

available through working with social enterprise.’

Camden Council

‘The Council expects all thosedelivering services on its

behalf to share its ambitions andaspirations for local people...

we believe that social enterprisesare well placed to offer this.’

Tower Hamlets Council

‘In a city wheredisadvantage and

opportunity stand side byside, social enterprise isvital in achieving social

and economic prosperityfor everyone.’

Nottingham City Council

W h y b u y f r o m a s o c i a l e n t e r p r i s e ? 7

Why buy from a social enterprise?

The National Procurement Strategy for Local Governmentsets out a range of strategic objectives and milestones forbetter local government procurement. The vision in theNational Strategy is that by 2006 all local authorities willhave adopted ‘world class’ practices in procurement, not least by:

realising economic, social and environmental benefitsfor their communities through procurement activities;

operating a mixed economy of suppliers, includingsmall firms, social enterprises, minority businessesand voluntary and community sector groups; and

stimulating markets and using buying power to drive innovation.

These messages have been reinforced in related guidancedeveloped as a result of the National Strategy, includingthe SME Concordat, by the ODPM and the LGA, and ThinkSmart...Think Voluntary Sector! by the Home Office andOGC. For more details, see the Further resources sectionat the back of this document.

What the examples on the following pages demonstrate is that social enterprises can be a highly effective vehiclefor local authorities looking to achieve the vision in theNational Strategy and get more for their money. Not everysolution will be right for your organisation, but hopefullythe case studies will give a feel for what is possible.

Three areas where socialenterprises may offer bettervalue for money than othersuppliers are:

1meeting more than one objective with thesame expenditure (see page 8);

2having a competitiveadvantage in delivering particulargoods and services (see page 14); and

3delivering innovativesolutions and stimulating new markets (see page 19).

1 Meeting more than one objective

Public bodies are increasingly required toachieve additional social and environmentalbenefits (‘community benefits’) through theirprocurement function to further their corporateobjectives. The Audit Commission’s 2002 reportCompetitive Procurement states that:

‘...it is important…to take account of outcomesthat are genuinely of strategic importance tothe authority, so as to ensure that the outcomessought from procurement are fully consistentwith the authority’s broader aims andobjectives. These may include environmentaland social concerns, so long as these are nothandled in a way that discriminates againstpotential suppliers or are invested withdisproportionate importance.’

The National Strategy, which requires publicbodies to link their procurement strategies totheir overall community goals (for examplethose set out in the Community Strategy),explicitly highlights the need to linkprocurement to local social, environmental and economic impact. It encourages localauthorities to:

‘...submit optional, priced proposals for thedelivery of specified community benefits whichare relevant to the contract and add value tothe Community Strategy.’

There is also scope for going even further byintegrating ‘additional benefits’ into the corecontract specification itself.

Whether they are delivering a recycling contractwhile tackling long-term unemployment, orcross-subsidising community transport withprofits from mainstream bus services, socialenterprises frequently deliver multiple outcomesacross a wider range of objectives than atraditional, narrower approach to servicedelivery. Some forward thinking local authoritieshave recognised that this kind of joined-upapproach to service delivery can offer genuinevalue for money.

Liverpool City Council’s waste managementcontract with Bulky Bob’s (see page 10)enabled the Council to get a more efficientservice while developing local jobs, promotingsocial inclusion, and saving the Council money.In Nottingham, NECTA (see page 12), is aconstruction company with a difference,helping ensure that local communities benefitfrom Council building contracts.

In other cases, social enterprises may bedelivering additional benefits that go wellbeyond the terms of the contract. Hill HoltWood (see page 16) for example, has contractswith local authorities, schools and the Learningand Skills Council to work with excludedyouths. It uses this money to cross-subsidiseless profitable services, such as keeping the34-acre community woodland available andusable by the public. The award-winningHackney Community Transport (see page 22)runs three mainstream London bus routes thatare consistently rated in the top three of allLondon bus route operators. The companyploughs profits from these contracts into

8 W h y b u y f r o m a s o c i a l e n t e r p r i s e ?

its community transport services which operateacross nine London boroughs.

In most cases it is in the interests of both thepublic body and the social enterprise torecognise and reward any additional benefitswithin the contract itself. It is perfectly legal todo so but lateral thinking is needed on bothsides of the equation. See the What you can dosection for more suggestions on creativeapproaches to community benefits and adviceon how to get the ball rolling.


Efficiency

A strategic approach to securing widersocial and environmental benefits fromprocurement can actively contribute toother key strategies and targets, forexample the efficiency agenda. The Officeof Government Commerce notes that‘efficiency does not equate to lowest costand there should therefore be no conflictbetween the efficiency agenda andenvironmental and social issues inpurchasing.’ This publication goes furtherand demonstrates that where publicbodies think long-term and take a holisticapproach to social, environmental andeconomic factors, they can deliversignificant benefits in terms of value for money.

ECT Group

Services supplied

Bulky waste removal and recycling by FRC Group/ Bulky Bob’s

Background

In 2000, Liverpool City Council had come to the end of its bulky waste removal and recycling contract andwas concerned with how it would continue to deliverthe same or more extensive service under budgetaryconstraints. The Council had used a ‘per collection’payment system with the previous contractor.However, with more calls than expected they neededto find an economical way to promote a widespreadservice without going into debt.

Politicians in the Council were interested in workingwith the social enterprise sector and began speakingwith the FRC Group, which had a track record ofproviding socially-minded business solutions tosocial and environmental issues. Underpinning alltheir services are training and employmentopportunities for the long-term unemployed.However training such as this, while effective, would understandably cost more than a mainstreamapproach that provided no such opportunities.

The negotiations and contract

A joint approach between departments within theCouncil helped provide the solution. The funding forthe bulky waste contract was split into two contracts:one contract explicitly for the delivery of bulky wasteremoval and recycling funded by the Council, and onecontract for the delivery of vocational training forhard-to-reach people, such as the long-termunemployed, funded by local Neighbourhood

Renewal Fund money. This enabled Bulky Bob’s, the bulky waste subsidiary of FRC Group, to competeand win the contract because, unlike its mainstreamcompetitors, it could combine mainstream servicedelivery and vocational training very efficiently.

The payment structure the Council agreed with BulkyBob’s maintained payment per collection for the firsttwo years of the contract moving to an annual lumpsum thereafter. By 2002, when the contract shifted toa lump sum payment, Bulky Bob’s was receiving morethan 50,000 calls per year (over 200 calls per day) but they have delivered on the same budget as theCouncil was previously paying for 29,000 calls. Infact, according to David Hodnett, EnvironmentalManager for Regeneration at Liverpool City Council,the Council ‘has just been audited, and they foundthat this new contract is working out cheaper thanthe previous one!’

Benefits for Liverpool City Council

Liverpool City Council has managed to provide awider service for the same amount of money. TheCouncil has also reduced its landfill costs. BulkyBob’s is required to recycle at least 30% of what itcollects; it currently recycles 36%. With a landfill taxcredit of £18 per tonne, the Council has saved over£15,000 in the last year from the increased reuse andrecycling of bulky waste alone.

Since June 2000, through the Liverpool Contract,Bulky Bob’s has also recruited around 20 long-termunemployed people. Each trainee gains on average 5 qualifications during their time at the company and 70% have gone on to another job.


Case study:

Liverpool City Council


Then there are the additional benefits from BulkyBob’s approach to the contract. ‘There is a generalfeel-good factor that the public has,’ David explains,‘knowing that their old items are going to help outless fortunate people and also about the fact that we are getting unemployed people into jobs.’ Thisknowledge fosters a more cooperative spirit andDavid continues that, ‘People make the extra effort,which is why we’ve seen such high call rates.’ AndBulky Bob’s has delivered a better service, forexample agreeing to collect items from inside thehome. David remarks, ‘On their own initiative, BulkyBob’s agreed to go inside the house and get stuff,obviously as long as the client signs a disclaimer

about damages.’ David further explains, ‘Under atraditional contract arrangement the response wouldbe “we can only collect from the front” or “if we haveto go in it will cost more.” That’s the difference.’

The service provided by Bulky Bob’s has been soexceptional that the Council is now discussingextending the contract.

‘There is a general feel-good factor that the public has, knowing thattheir old items are going to help out less fortunate people and alsoabout the fact that we are getting unemployed people into jobs.’

Services suppliedConstruction, refurbishment and groundsmaintenance by NECTA.

Background and contracts

Under the City Challenge initiative of the 1990s,Nottingham City Council ran a number of regenerationprojects in the St Ann’s area of the city. One of theseinvolved a construction training programme for localpeople centred around the development of a self-build community centre.

When City Challenge came to an end, the Council waskeen to build on the success of the programme. Notonly was it a useful regeneration tool, getting local,long-term unemployed people into work, but ithelped address a recognised skills shortage in thebuilding industry. As a result, they helped createNECTA (Nottingham Environmental ConstructionTraining for All) to deliver social inclusion throughconstruction programmes. Formed in 1998, NECTAhas the twin aims of enabling the socially excluded toenter the labour market and facilitating the creationof a skilled construction workforce.

All the work done by NECTA is carried out by amixture of qualified craft operatives, apprentices andtrainees working towards NVQ Level 2 in a variety oftrades including carpentry and joinery, bricklaying,painting and decorating, and groundworks. Initially, a large majority of its contracts were on Council sites,for example at St Anns Phase 10 where NECTArefurbished a large housing estate. More than 500trainees and apprentices worked on the site, carryingout environmental improvements such as railings,fencing, heavy landscaping and footpaths.

In 2002, the Council changed its procurementpolicies to include community benefit within allconstruction tenders and contract documents. As a

result, contractors working on their behalf are nowrequired to address training issues alongside otherobligations such as those around equality anddiversity. NECTA has provided the training element ofmany of those contracts. At the same time it begandiversifying its range of contracts, delivering as botha prime- and sub-contractor for a wider range ofpublic bodies and private construction businesses.

Recent developments

Recently, NECTA has had to adapt to a decline inprogrammes to help the long-term unemployed. This coincided with the cancellation of a number of cherished contracts and has proved a toughchallenge for the company. As a result it hasrefocused and broadened the range of itsprogrammes to reach other client groups.

NECTA now places a greater emphasis on the 14-19agenda and this has led to changes in the kind ofwork the company undertakes. While long-termunemployed adults can work as trainees on acommercial building site, Health and Safetylegislation and insurance restricts what 14-19-year-old trainees can do. As a result NECTA hasincreasingly turned its attention to propertyrefurbishment – ideal for this age group because theproperties are self-contained construction units andthe work gives trainees skills that are currently inhigh demand in the building sector.

Rob Wadsworth, Economic Development TeamLeader at Nottingham City Council, is impressed withthe way NECTA has dealt with recent challenges:‘There have been a lot of changes at NECTA recentlyin response to both a change in the local economyand the priorities of local partner organisations. A lot of the traditional construction skills that NECTApreviously specialised in are no longer in highdemand. They’ve proven to be a very flexibleorganisation and this bodes well for the future.’

Benefits to the Council

Currently NECTA employs around 30 staff, 12apprentices and 40 trainees. On average over 50% of its trainees go on to get jobs in the construction


Case study:


industry after their training. Many of them haveprogressed to employment within the local authority,addressing the Council’s own skills shortages. Inaddition to construction related experience, traineesalso learn other skills such as numeracy and literacy,with the majority passing national tests. ‘One of thekey things we do is give people employment skills,’says Howard Platts, NECTA Chief Executive. ‘We workwith lots of people who have been excluded invarious ways and teach them timekeeping andattendance, team working and how to takeinstruction – a whole variety of transferable skills.’

Some 40 to 50% of NECTA’s trainees are from anethnic minority background, compared to a nationalaverage of only 2.8%, and 40% are ex-offenders. Rob

notes, ‘NECTA’s client groups are amongst the mostdisadvantaged in the city. It is the key organisationfor supporting people from these communities intoemployment in the construction industry’.

NECTA is also beginning to access other hard-to-reach groups, for example a new programme for2006 focuses on young people excluded from school.As Rob explains, ‘NECTA are now proficient at dealingwith young people not in education, training andemployment: those referred through the ProbationService; and people from area-specific schemes suchas New Deal for Communities. We are also exploringhow they can play a role in supporting people onIncapacity Benefit back to work, a key priority in ourLocal Area Agreement’.


‘NECTA’s client groups are amongst the most disadvantaged in the City. It is the key organisation for supporting people from thesecommunities into employment in the construction industry’

2 A competitiveadvantage in certainareas

In some cases social enterprises may simplyhave a competitive advantage in the delivery ofparticular goods and services. Examples wherethis may be the case include: where the servicemeets the needs of a specific group who arehard to reach or would particularly benefit froma high level of trust between provider and user;and where it is very hard to specify the softernature of the service in a contract (such as insupport for disabled people and elderly care).

Many social enterprises have particularknowledge of, sensitivity to, and expertiseabout, the communities in which they work. As a result, they may be better placed thancompetitors to engage with people fromdisadvantaged or excluded communities. TheSME Concordat recognises this competitiveadvantage, suggesting for example that ‘social enterprises and those operating in the

voluntary and community sector, may havebetter access to hard to reach customergroups.’ The Tower Hamlets CommunityRecycling Consortium (see page 18) illustrateshow contracting with a consortium thatincludes local residents has enabled the localauthority to meet recycling targets despite theproblems associated with doorstep recyclingservices for high-rise housing. Meanwhile HillHolt Wood (see page 16) and its alternativeapproach to engaging with excluded youths hashelped address anti-social behaviour and giventhe young people involved an opportunity todevelop vocational skills that fit their needsand interests.

In areas such as social care, child care, healthand leisure, social enterprises delivering highquality, user focused services are particularlyvisible. Many involve both users and staffmembers in the way that projects are managedand services developed. Profits are plougheddirectly into service provision, better stafftraining and other improvements. See the boxopposite for just a few of the success storiesfrom the social care sector.


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Sunderland Home Care Associates providespersonal care and domestic services to hundredsof people in need. It promotes independence andenables older, frail and disabled people to stay intheir homes for as long as possible. Since it wasset up in 1994, SHCA’s hours of service have grownfrom 400 hours per week to 3,500 and its turnoveris now more than £1.5m a year. The 160 employeesown the company, share in some of the profits andparticipate in decisions. The result is an amazinglylow staff turnover of just 3.5%. SHCA is building onthis success by replicating the model across thenorth of England.

Community Foster Care provides a competitivelocal alternative to placing children in out-of-areafoster care organisations. Created in response to anationwide shortage of foster carers, CFC aims toaddress the shortfall, keep fostered children withintheir communities and regenerate disadvantagedareas. In just five years it has created over 100foster care jobs within deprived areas ofGloucestershire, fostering over 300 children, many with challenging behaviour. CFC is currentlyembarking on an ambitious social franchisingprogramme to replicate its models across the UK.

Sandwell Community Caring Trust providescare and supported living to older people andadults with disabilities. The Trust has achievedimpressive savings for the Council – for example an elderly care home cost £452 per week perperson to run in 1997, and seven years on the costwas just £313 per person per week. Crucially, thishas been achieved without sacrificing quality orstaff pay and conditions. Staff still enjoy local

authority terms of employment and Sandwell CCTcame sixth in the 2005 Sunday Times 100 BestCompanies to Work for – with a staff turnover ofjust 3% the company had the happiest employeesof all 100 companies.

Future Health & Social Care based inBirmingham supports vulnerable members of the community by providing access to housing,education, training and employment. Workingmainly with black and ethnic minoritycommunities, the 180 staff at FHSCA provide a broad range of services including careaccommodation for mental health sufferers,supported homes for ex-offenders andaccommodation for asylum seekers. FHSCA has an annual turnover of £3.4m and was the top-placed social enterprise in the 2003 & 2004 InnerCity 100, the index of the UK’s fastest-growinginner city enterprises.

SCA Community Care Services is a leading care provider in the south of England that providesdomiciliary care, support work, day care andtransport services for older people and peoplewith disabilities. SCA holds 45 contracts for thedelivery of social care, operates an annual turnoverof £6m and employs 550 staff and 75 volunteers.The company is continuously looking to improveand diversify its services. For example, it hasrecently set up SCA Healthcare, which is workingwith six PCTs in Hampshire to address the shortageof NHS dentists on the south coast. The first twodental practices will be open by the beginning of 2006.

Social care success stories

Service supplied

Youth development and education supplied by Hill Holt Wood.

Background

In 2001, central government required Local EducationAuthorities (LEAs) to find ways to provide full-timeeducation for young people excluded from school.For Lincolnshire County Council, that meant inspiring240 youngsters, some involved in anti-socialbehaviour, to commit themselves to giving learninganother try. Sue Fenton-Smith, Head of Emotionaland Behavioural Support Service at LincolnshireCounty Council, and others at the Council decided tostart a programme to address young peoples’ needs,called Solutions 4. Sue needed to find differenteducational environments that would encourage the youngsters to attend. ‘We knew it was no goodexpecting these young people to go back into asetting that still had the parameters of normalschool,’ notes Sue, ‘they’d kicked against that, andwe needed to find something that was different.’Fortunately, the team at Solutions 4 found out aboutcommunity woodland Hill Holt Wood (HHW).

HHW is a 14-hectare woodland situated on theLincolnshire and Nottinghamshire border. Its ownersbought the woodland in 1995 and turned it into acommunity-controlled social enterprise that employs14 people. In an area where two-thirds of businessesemploy less than five people, this makes HHW one of the larger businesses in the county. HHW operatesa self-sustaining woodland using traditional crafts,while incorporating modern techniques that arebeneficial to the environment. It had previously runsome educational workshops as part of the New Deal

Environmental Task Force but nothing as formal as off-site schooling.


The first step was to assess the interest and capacityof HHW to deliver a Solutions 4 scheme. It didn’thave formal experience working with young people,so the Council trained the on-site staff in behaviourmanagement and other relevant issues. There is noset curriculum for Solutions 4 schemes, so theCouncil and HHW co-developed a curriculum thatwas flexible and accountable to central governmentstandards. HHW currently works with 24 students,offering a combination of education and vocationaltraining, as some of the young people will go on tohigher education while others will go into jobs. The key is that HHW offers an alternative setting to normal school. ‘It’s about opening their minds towhat they could be successful with, and that’s alsowhere vocational achievement comes in’, says Sue.The teachers are skilled craftsmen, ‘And becausethey’re skilled in something interesting to theyoungsters they really get respect that way.’

The Solutions 4 sites seek to create an open andsupportive environment for participating youngpeople. ‘They don’t wear uniforms and there aresmoking breaks, though we support them in kickingthe habit,’ explains Sue, ‘they don’t get excluded ifthey come on-site with drugs, and if they’ve beeninvolved with the police due to violence or if they’vegot an anti-social disorder, we work through that withthem.’ Such openness may shock many LEAs, but thesuccess rates of Solutions 4 show that it works.

Benefits to Lincolnshire County Council

Sue notes, ‘We’re only in the third year of the projectand the youngsters haven’t moved on yet, butalready we’ve recorded excellent attendance rates.’While quantifying a decrease in crime is difficult,police departments across the county have openlyoffered strong support for the programme because it


Case study:

Lincolnshire County Council

seems to be contributing to a reduction in crime and anti-social behaviour. ‘What I am certain about,’notes Sue, ‘is that those youngsters that come ontothe project are less likely to be involved in antisocialbehaviour because we know they’re involved in theprogramme 25 hours a week and therefore must notbe on the street as much as before.’ Many of theyoung people coming from difficult home lives havedemonstrated markedly calmer behaviour afterparticipating in training schemes at HHW.

Another impact that will be felt in several years is thedevelopment of a skilled workforce within the county.‘Especially in Lincolnshire, where the skills are notalways there,’ explains Sue, ‘we get a lot ofyoungsters coming from the south to do trade work.’So all of the young people coming out of the

Solutions 4 programme with accreditation will thenbecome part of a skilled workforce in the community.‘Now all we need to do is educate local businessesthat NVQ3 is equivalent to GCSE in other subjects,’Sue points out, ‘and they’ll feel comfortable takingthem into employment.’

Many of the young people that HHW works withthrough Solutions 4 would otherwise be placed in provision outside the county. In addition to thedifficulties associated with relocating the youngperson outside his/her home area, the provision canbe extremely costly, averaging £70,000 per annum.By providing a number of opportunities and locationsfor Solutions 4 within Lincolnshire, the LEA can savemoney and achieve better results.


“It’s not like school, not boring. The people we work with understandus and the staff here really care. I love it even when it rains.”

Services supplied

Recycling provided by Tower Hamlets CommunityRecycling Consortium (THCRC).


Tower Hamlets Council is an enthusiastic supporterof what social enterprises can achieve through thedelivery of services. As Damian Roberts, Head ofEqualities and Inclusion, explains, ‘In working onbehalf of our residents, the Council expects all itspartners and those delivering services on its behalfto share our ambitions and aspirations for localpeople, our commitment to excellence and equalitiesin the delivery of public services, and to have agenuine commitment to partnership working. We believe that social enterprises are well placed to offer this.’

The Council needed to find a way to addressgovernment targets for doorstep recycling,something that is inherently difficult in TowerHamlets where 83% of housing is high-rise. Itdecided that a Third Sector commissioning strategy(working in partnership with local communitygroups) was the best way forward for tackling the problem.

With an enthusiastic Council supporting the process,a number of organisations came together, includingthe Tower Hamlets Environmental Trust, the LondonRecycling Consortium and Islington Waste Savers, all of whom have experience of community recyclinggoing back several years. This consortium of localresidents, green campaigners and a recyclingbusiness (now known collectively as THCRC) won the£5.5m contract in a competitive bidding process. An important issue for the Council was the

need for the contractor to demonstrate localknowledge and cultural sensitivity if the doorsteprecycling levels were going to help addressgovernment targets.

Benefits to Tower Hamlets Council THCRC succeeded in raising the recycling rate from3.5% to 8.3%, is on track to exceed 10% later thisyear. It has achieved a participation rate of 65% –significantly higher than the rate for residents of low-rise housing – while at the same time creatingover 100 jobs, 95% of which have gone to local people in the borough. 60% of the staff are from thelocal Bengali population who constitute around 50%of residents. THCRC currently services 45,000 households and is on course to cover all 80,000residents with the doorstep service.

Damian is enthusiastic about what THCRC has been able to achieve, commenting, ‘The energy, drive and commitment of the THCRC staff has beenoutstanding. They have helped to realise our goal ofdelivering a high volume service that achieves strongparticipation from residents, is configured aroundthe needs of our diverse communities and isdelivered by a workforce drawn from thecommunities they serve.’He adds, ‘This has enabledTHCRC to achieve unprecedented performance levelsand generate a level of energy and excitement locally that is not usually associated with this type of service.’


Case study:

Tower Hamlets Council

3Innovate and stimulatenew markets

The National Procurement Strategy for LocalGovernment requires local authorities to:

‘Stimulat(e) markets and us(e) their buyingpower creatively to drive innovation in thedesign, construction and delivery of services.’

Social enterprises have a strong track record ininnovation and market making – whether it’smoving fair trade into the mainstream orpioneering new methods of service delivery.ECT Group (see page 20) pioneered kerb-siderecycling and, as the case study shows, theyare continuously looking for ways to deliverground-breaking, innovative services. Hackney Community Transport (see page 22),who have contracts with nine boroughs inLondon, in addition to its contract with London

Buses, is a leader in developing inclusivetransport solutions.

In the leisure sector, leisure trusts such asGreenwich, Coventry and Wycombe have takenpartnership working a step further. As well asdelivering high quality leisure services for localauthorities, they are looking to primary caretrusts, local education authorities andcommunity organisations to create joined-upsolutions. Coventry Sports Trust, for example,works with NHS Trusts across Coventry on anumber of projects, including the developmentof exercise programmes for older people toprevent falls in the home, and a programme ofactivities for obese children and their families.

Stimulating innovation and new marketsrequires an imaginative and proactive approachfrom public bodies as well as the socialenterprises. For more information see the What you can do section.

‘Local authorities should... stimulate markets and use their buying power creatively to drive

innovation in the design, construction and delivery of services.’

National Procurement Strategy For Local Government



Service supplied

Full waste minimisation solution supplied by ECTGroup. Services include: refuse and recyclablescollection, recycling, street cleaning, civic amenitysite management, and clinical and bulky waste.

Background

Ealing Council’s relationship with ECT Group goesback about 25 years, when the voluntary servicecouncil allocated grant money for the establishmentof Ealing Community Transport in order tocompensate for budget cuts in public transportprovision. The Council and ECT Group have bothevolved, and ECT Group now encompasses not onlyEaling Community Transport but also a range ofwaste minimisation services serving Ealing and othercouncils within and outside London.

The Council started contracting with ECT Group forrecycling services in 1997, when ECT Group wasawarded a contract for kerbside recycling. During thiscontract, ECT Group developed a new model forkitchen waste removal, the first of its kind in the UK.Andy Bond, Managing Director explains, ‘… Wesecured some funding from London Remade to pilota scheme and it found its way into our majorcontracts; you just put your kitchen caddy out alongwith the kerbside recycling.’ The Council took noticeof this innovation, and when the time came to re-issue the tender in 2001, ECT Group won with flyingcolours. This time, the Council added garden wasteto the list of ECT Group’s responsibilities.

During the next contract, ECT Group again pushed the boundaries of waste minimisation. Incombination with its other contracts, it developed a

GIS system to link socio-economic status to recyclingbehaviour. ‘Recycling is not a universally usedservice,’ explains Andy, ‘usage is fundamentally aproduct of socio-economic factors, so we determinedthat if we started measuring those factors then wecould become more efficient, kind of like “wastesociology”.’ This GIS system has enabled ECT Groupto deliver an increasingly efficient service to itsclients, including Ealing Council.


In 2004, Ealing Council decided to pull together all ofits waste-related contracts into one large contractfocused on waste minimisation. Given the size of thecontract, an advertised cap of £12m, the Counciladvertised the tender in the Official Journal of the EUand received back a number of proposals, primarilyfrom the top international waste managementbusinesses. Earl McKenzie, Head of Waste andRecycling at Ealing Council explains, ‘We set up thecriteria to reflect quality and price at a ratio of 60:40due to the flexibilities we sought in the contract.’From a financial perspective, ECT Group’s proposalcame in at £1m less than the next lowest tender.From a quality perspective, Earl explains, ‘The othertenders had strengths but did not stretch or innovateto the extent required by Ealing at a time of root andbranch organisational change. Crucially, ECT Groupbest demonstrated understanding of the integratednature of the contract which is not the traditional setof separates but is recycling and waste led; ECTGroup understands waste minimisation, which iswhat 60% of the contract is really about.’

Not only was ECT Group’s proposal cheaper andhigher in quality, it was also clearer. ‘What’s great

Case study:

Ealing Council


about the ECT Group contract is that it’s 100%transparent; nothing hidden in there,’ adds Earl, ‘ECTGroup put in relatively few caveats, which is wherecosts can really add up later because the price is onlygood if an exact set of conditions stay the same.’Since the Council was seeking a flexible partner thatwould adapt over time, demonstrating the ability toalter services based on changing needs was crucial.

Benefits to Ealing Council

As well as being the cheapest proposal, there areother economic benefits to ECT Group’s proposal. Asa result of its work, the Council has saved money inlandfill costs and gained savings in recycling credits.

‘In comparison to other contractors the Council hasworked with, we’ve found that the quality of stafftraining at ECT Group is better because there’s morecontinuity and staff retention,’ Earl adds, ‘we don’tget complaints from customers or lose customersand no other contractors come near to ECT Group asfar as quality is concerned; I believe this is theopinion of the other local authorities as well.’ It’s notalways easy or possible to quantify achievementslike staff retention or quality control, but ECT Group’sgrowing success testifies to their importance.

‘We don’t get complaints from customers or lose customers and no othercontractors come near to ECT as far as quality is concerned.’

Service supplied

Accessible transport services (PlusBus, ScootAbilityand Travel Training).

Background

Camden Council is one of nine London Boroughs tocontract with Hackney Community Transport (HCT) toprovide accessible transport services. Established in1982, HCT was among the first urban communitytransport organisations. In the early nineties, HCTstarted delivering small-scale contracts for localauthorities; from the school run to transportingpatients to hospital appointments. It now deliverssome much larger contracts, for example it handlestransport for the social services and educationdepartments for three London boroughs. The largesteducation contract is worth £3m and employs morethan 120 people.

A major step forward for the company was winningcontracts to deliver mainstream London bus routes. It currently runs three routes that carry 1.8 millionpassengers a year and is consistently rated in the topthree of all London bus route operators. John Barry,Head of Network Development at London Buses,comments, ‘We have to focus on the things that wewant HCT to achieve for us, which is to run busservices to excellent quality standards, but it doesmatter to us what allows them to do it. I’m sure theircommunity background helps them to achieve their targets.’

All the profits from running the tendered services are locked into the company and are used either tosubsidise HCT core services, or to develop innovativeways to meet an identified need. For example, last

year HCT earned £295,000 in performance bonuses.And as Dai Powell, HCT’s Chief Executive, explains‘When we get our bonus, I can go to the board andsay “How do you want to spend it? More training?More mobility?” They choose’.

Each separate service has its own user forum, which reports to a management board made up of service users and appointed representatives. HCT’s bottom-up structure ensures that companyalways retains a local focus and ethos even whenbidding for contracts as far afield as north Wales and Burnley.

The contract

In Camden itself, HCT delivers three services: PlusBus Hail & Ride, ScootAbility and Travel Training.PlusBus Hail & Ride is a local fixed route bus servicethat links areas of high deprivation with local shops,health centres, day centres etc. and is designed forpeople unable to use mainstream public transport.The service is timetabled and operates on a fixedroute. ScootAbility is a service where the Councildelivers mobility scooters on a short term loan topeople who cannot use public transport to enablethem to get out and about independently. TravelTraining is for people with learning difficulties helping them to use mainstream public transportindependently, thus enabling people to have a betterquality of life.

Andy Kemp, Accessible Transport Team Manager in Camden Council’s Environment Department isenthusiastic about HCT’s work, ‘Our partnership with HCT has helped facilitate social inclusion forCamden residents, and their willingness to innovate


Case study:

Hackney Community Transport

Case study:

Camden Council


and adapt has provided a refreshing insight into theopportunities and benefits available through workingwith social enterprises. We have worked with HCTboth as project partners and service commissioners,and found them responsive and sensitive to ourneeds and aspirations.’

The ‘added value’ that HCT delivers is clearly one of the reasons it is so successful in winning localauthority work because with 20 years experience

working with vulnerable and disabled people, it hasthe ability to deliver transport solutions that are intune with service users’ needs. That’s very appealingto local authorities. Indeed, HCT has even begunassisting local authorities in drawing up tenders toensure that, whoever delivers them, the needs ofsocially excluded people who will use the transportare met.

‘Their willingness to innovate and adapt has provided arefreshing insight into the opportunities and benefits availablethrough working with social enterprises.’

24 W h a t c a n y o u d o ?

So, we’ve given you an idea of some of the benefits of procuring from social enterprises. But what can you do to get social enterprises competing for contracts? This chapter sets out a number of different ways to get the ball rolling – from simply finding out what social enterprises exist locally, to adopting a trulystrategic approach.

Of course, not all of the ideas will be relevant to yourorganisation. However, what is clear from the case studies is the importance of a proactive, imaginativeapproach on both sides of the equation, and the rewards it can bring.

This is only a brief overview of the different options;wherever possible we’ve suggested where to go forfurther information and advice (the Further resourcessection at the end collects this all together for easy reference).

If you want to know howyou can:

1Find out what alreadyexists See page 25

2Build a supply baseSee page 26

3Take a strategicapproachSee page 28

What can you do?

1 Find out what alreadyexists – quick wins

A good starting point is to find out about social enterprises that operate locally and what is already happening in your area. Does someone else in your organisation have responsibility for social enterprise, for example in the Regeneration or EconomicDevelopment teams?

Talk to local social enterprise networks and regional/national social enterpriseorganisations (see the Further resourcessection for contact details). These are animportant source of information and advice,and can provide you with information on social enterprises that operate in your area – some may even be doing specific work onpublic procurement (see box on right). It is also worth talking to whoever hasresponsibility for developing social enterprisein your Regional Development Agency ordevolved administration.

There may be some quick wins at this stage,particularly for goods and services under theEU-threshold. Where you have identified socialenterprises that can fulfil a need, find outwhether or not they are already on yourapproved suppliers list. If they are not, contactthem, explain the benefits and invite them toapply. While you’re at it, make sure yoursupplier approval process is friendly to newsuppliers. Many local authorities close theirapproved supplier list altogether, stopping any other business from doing work with the council.

W h a t c a n y o u d o ? 25

BEST Procurement

BEST (Benefiting the Economy and SocietyThrough) Procurement* is a major initiativeled by Social Enterprise East Midlands. It aims to make significant advances in thevalue of business done between the publicsector and social enterprise. It is:

a programme of supplier developmentfor social enterprises;

a partnership of public sector bodiestesting innovative approaches toachieving broader public benefitthrough mainstream expenditure; and

a clearing house of market intelligenceon (East Midlands) public sectordemand and the supply of sustainablebusiness solutions.

The programme will provide in-depthevidence in response to key questions suchas ‘how can the public sector become moreefficient and more responsive at the sametime?’ and ‘what added value do socialenterprises offer as suppliers?’ Practicedeveloped by the partners will be widelydisseminated in the form of tools andreports and findings used to support furtherwork on achieving public benefit throughprocurement. More information is availableat www.seem.uk.net

*The programme is part-funded by the European Social Fund under the Equal CommunityInitiative Programme.

2 Build a socialenterprise supply base

At its simplest, engaging with social enterprisesand letting them know you’re a willing customercould be all they need to start bidding for work.However, a more proactive approach may berequired if you are engaging with socialenterprises that have not considered supplyingthe public sector before, have limitedexperience of competing for contracts, or haveconcerns about the costs and time involved.

As long as no individual enterprise gains anadvantage in competing for a specific contract,it is perfectly legal to work with socialenterprises to help improve their ability torespond to contract opportunities. There are anumber of ways in which you can do this, manyof which will be familiar to anyone trying toencourage procurement from SMEs. For example:

work with social enterprise supportorganisations and networks, as well asother business networks like the localChamber of Commerce, to raise awarenessof the opportunities for suppliers andencourage social enterprises to bid for contracts;

arrange regular ‘meet the buyer’ days, as they are a good way to engage withsocial enterprises in your area;

ensure that social enterprises are aware ofupcoming opportunities and encouraged tobid for advertised tenders. Early informationabout what contracting opportunities are

coming up and open advertising ofopportunities are essential steps toimproving access, so publicise contracts as widely as possible in accessible media,using electronic and other networks. Wherecontracts exceed the EU thresholds they canstill be advertised locally provided no extrainformation is given in the advertisementand the advert is placed no earlier than thenotice in the Official Journal of the EU;

examine your financial regulations andother contract requirements as they can be a significant barrier for many socialenterprises. For example, a requirement of several years trading history excludesyounger social enterprises. There are riskmanagement issues to consider but it isimportant that any conditions areproportionate to the risks associated with a contract, and it is often possible to relaxrequirements for lower-value contractswhere relatively little risk is involved;

think carefully before aggregating contracts– as the SME Concordat Good PracticeGuidance points out, ‘very large contractsmay pose significant barriers to entry tosmall firms, or those wishing to diversifyinto the market. A combination of theevolving strength of incumbents, size ofcontracts and high bid costs can lead to aless competitive marketplace.’ Furtheradvice on aggregation is available in theOGC’s Smaller supplier…better value?;

encourage social enterprises to exploresub-contracting opportunities, particularlyfor very large contracts. Publish details ofprime contractors and contracts on your


website and organise ‘open suppliermeetings’ where potential primecontractors and sub-contractors can gettogether. It is even possible to encourageprime contractors to work with socialenterprises to achieve additional social andenvironmental benefits through their supplychains. Alternatively, consortia bids areanother way in which small businesses cantackle large procurements (see TowerHamlets Council, page 18); and

provide feedback to social enterprises thatmade it to the shortlist but didn’t win thecontract. You can also direct the enterpriseto relevant support, so that it can competemore effectively next time. Nottingham CityCouncil, for example, reviews tenders wheresocial enterprises were unsuccessful inorder to explore the scope for refocusingthe wording of contracts, and providebusiness support where appropriate (see box overleaf ).


Back-office supplies

Many of the examples featured in this guideare of social enterprises delivering front-linepublic services, but there is scope fortransforming the back-office too. Fair tradetea and coffee from Cafédirect or chocolatefrom the Day Chocolate Company tastes great – not least because producers in thedeveloping world get a fair deal. High quality,low cost office furniture and equipment isavailable from Green-Works, divertingthousands of tonnes from landfill, whilecreating training and employment. Or there’srecycled paper and office supplies fromPaperback, the UK’s only paper merchantspecialising in recycled paper. And you canmake an impact with back-office services too.You could source mail and packaging fromPack-IT, cleaning from Greenboro and cateringfrom Rolls on Wheels – all three are SocialFirms providing paid employment for peoplewith learning disabilities. So no matter whatyou’re buying, social enterprises can help youget more for your money.

As with many larger cities in the UK, Nottinghamhas a two-speed economy with a vibrant citycentre co-existing with estates of disadvantageand structural economic problems. Both socialenterprise and the impact of public sectorprocurement are seen as key policy tools inredressing this balance.

Much of Nottingham City Council’s early work on procurement from social enterprise centred on construction (through the Council’s City WideConstruction team), and the purchasing ofhomecare services. Lessons learnt from thesesectors have been used to broaden the scope ofsocial enterprises delivering commercial servicesto the Council and over the past two years newsocial enterprises have entered the supply chain in information technology, housing maintenance,grounds maintenance and consultancy services.The City Council now has a Social Enterprise Team

who broker relationships between socialenterprise suppliers and purchasers within theAuthority, giving social enterprises a gatewaythrough the often complex bureaucracy of localgovernment procurement.

Many social enterprises offer discounted goodsand services to the Council’s staff through a ‘StaffSavers’ scheme including access to culturalfacilities, discounted use of internet cafes andrefurbished IT equipment. For the Council’s largeroffices, a dry cleaning collection and deliveryservice involving a social enterprise is also under investigation.

Much of Nottingham City Council’s current andfuture plans regarding social enterprise andprocurement are linked to their being partners inBEST Procurement, a programme led by SocialEnterprise East Midlands (see page 25). A numberof partners in the region are sharing best practiceand identifying areas of opportunity.

3 Take a strategicapproach

The ideas outlined above are steps that allpublic bodies can and should take. However,many of the local authorities featured in thisguide have gone even further and taken a trulystrategic approach to the delivery of goods andservices through social enterprises. How youchoose to proceed will be dependent on yourlocal circumstances and every public body willbe different.

Social enterprise friendlyprocurement

Some local authorities have developed specificframeworks for working with social enterprises.Sheffield City Council (see box opposite) has astrategy in place for expanding opportunitiesfor social enterprises in the procurementprocess, including sub-contracting with partnerorganisations. Tower Hamlets Council (see boxopposite) has developed a new commissioningframework and code of practice accompaniedby a capacity building programme thatexamines options for consortium bids.



In April 2004 Sheffield City Council adopted apolicy for expanding opportunities for socialenterprises through public procurement. Theinitial aim was to improve links between theachievement of the Council’s social inclusionand economic regeneration objectives with itsmainstream spending activity, by providingimproved opportunities for social enterprises.The policy has now been developed further toreflect the National Procurement Strategy’sdrive towards the achievement of a mixedeconomy, incorporating a range of third sector suppliers.

The Head of Procurement Partnerships andProgramme Management within Sheffield CityCouncil leads on the implementation of thepolicy, the key themes of which are to:

improve the range, quality and accessibility of information available to all potential contractors;

raise awareness and understanding of thevalue and capabilities of social enterprises;

develop contracting processes thatlegitimately incorporate the considerationof relevant community benefits;

enhance the Council’s policy framework to support the involvement of socialenterprises in public procurement; and

use the Council’s influence with partners to generate enhanced opportunities for social enterprises.

Tower Hamlets Council has developed a newcommissioning framework and code of practice,which it has used to commission a range ofdifferent services from social enterprises – andother third sector organisations – includinginnovative packages of social care, direct youthservice provisions, and a £5.5m contract todeliver community-recycling services.

Social enterprises have to demonstrate thatthey can deliver the Council’s service prioritiesmore effectively than the competition. They must also participate in the Council’sperformance management arrangements.However, outside of any specific procurement,the Council offers a wide range of assistance to social enterprises wanting to increasecompetence in bidding for services, including a capacity building programme – covering areassuch as financial systems, IT, HR policies andgovernance. It also gives advice and guidanceon bidding, open briefings to potential service providers and offers support in forming consortia.

The Council has recently published a resourcepack for social enterprises. This providespractical advice on legal structures and sourcesof funding and advice. It is targeted at individualsor organisations wanting to develop or expandtheir own social enterprises.


Tower Hamlets Council Sheffield City Council

Social and environmental benefits –creative thinking

Your organisation’s corporate strategy and itslinks to the procurement strategy will be acritical factor in any creative approach to socialenterprise. These are essential documentsbecause they provide the framework for furtheraction; whether it’s including communitybenefits as part of the core requirements of a contract, or working with social enterpriseSMEs as part of a broader strategy to develop a diverse supply base. Some factors may bebeyond your control. For example the politicalsupport for social enterprise that catalysedLiverpool City Council’s work with Bulky Bob’s.But if there’s support in the communitystrategy, such as an aspiration to tackleunemployment and skills shortages thatworking with social enterprises could helpdeliver, you can use it to galvanise colleagues –in your department and across the organisation– to develop truly innovative approaches toservice delivery.

The National Strategy explains that tenderinvitations should include a requirement forbidders to submit optional, priced proposals for the delivery of specified communitybenefits, as long as they are relevant to thecontract and deliver the Community Strategy.

Potential contractors could therefore be askedto show how they would engage service users,staff, and the community in the operation of the service, and this could be included in theevaluation criteria, as long as the aspiration is set out in the Community Strategy or is anapproved objective for the service.

However it is possible to go further, as theLiverpool case study illustrates (see page 10).By considering what additional benefits may beobtained from provision by a social enterprisein advance of the tender, they can be includedas part of the core contract specification. This isnot putting social enterprises at any unfairadvantage, as any private business may alsomeet this part of the specification.

‘Councils can work with the private sector todiscuss possible options for service deliverybefore advertising the contract opportunity.This may provide councils with alternativeoptions for service delivery that they may nothave had previously. This should, however, bedone in such a way to maintain open and faircompetition and ensure that no one potentialtenderer is advantaged.’

Again, where you are looking for a freshapproach to an old problem both the Liverpooland Ealing case studies (see pages 10 and 20)illustrate the advantages of involvingstakeholders in drawing up the contractspecification, including appropriateconsultation with potential suppliers. As theAudit Commission’s Competitive Procurementreport highlights:

‘For some services, such as refuse collection, it might be that the market appears to bedeveloped and well understood. However evenin this area it is necessary to talk to potentialpartners to find out what sort of additionalbenefits might be derived in, for example,delivering recycling targets or helping witheducational campaigns.’



Since every contract is different – and thepossibilities of building in multiple objectiveadditions is very wide – there can be nostandard set of simple criteria against which a procurement officer can easily test aforthcoming contract to see how effectively it might be delivered by a social enterprise.Therefore, you will need to be creative in orderto work out what additional benefits could bebuilt into the contract and whether all of thesebenefits would be best delivered by the samecontractor, or whether some aspects would bebest delivered separately.

Finally, any community benefits included in the contract must form part of the evaluationcriteria, and if an interview is part of theselection process it is important that the tenderpanel includes people with knowledge of allaspects of the specification and criteria. If not,there is a risk that even though social andenvironmental issues have been incorporated,they will not be given due consideration at thefinal hurdle.

It is for you to decide what to buy, set thespecification, and then follow UK policy to achievebest value and EC policies to ensure an openmarket. We are not saying you should give socialenterprises preferential treatment. Rather, that inthinking through your procurement strategy youmay well find that these organisations cancontribute significantly to achieving best value andso should include them on tender lists or find waysto encourage them to tender.

All the approaches highlighted in this documentare legal. What they clearly show is that there is much more scope for added-value publicprocurement than is currently being exploited. This is in line with the National Strategy, which

requires all local authorities to be innovative in their approach to securing wider social andenvironmental benefits, and the new EUConsolidated Procurement Directive whichexpressly provides for the inclusion of social andenvironmental considerations in procurementcontracts.

We would buy from social enterprises butUK and European procurement rules makeit very difficult

For more detailed discussion on legal issues see Proactive procurement – Achieving qualityservices and implementing policy objectives byprocurement from social enterprises, availablefrom [email protected]

32 C o n c l u s i o n

The makings of a beautifulrelationship...The awarding of a contract really marks thebeginning, not the end, of the relationship. One of the distinctive features of the casestudies is the importance all the socialenterprises and local authorities attach to apositive relationship after the contract hasbeen awarded, with both parties exploringways in which service delivery can be improved.Lincolnshire County Council and Hill Holt Woodwork closely together to develop and adjust thecurriculum offered to ensure students’ needsare met; Bulky Bob’s and Liverpool City Councilare discussing new ways of working; and EalingCouncil’s open-book contract with ECT Groupmeans the focus is on an ongoing partnership.

David Hodnett, Liverpool City Council’sEnvironmental Manager for Regeneration, hasbeen impressed with Bulky Bob’s enthusiasticattitude. The Council has been able to useBulky Bob’s for last minute work that wouldhave otherwise cost a lot more to deliver, suchas the delivery of wheeled bins and, as Davidexplains, ‘We are currently looking at addingevening or weekend collections sincecustomers can’t always be at home duringbusiness hours; we might need to make a

nominal charge for this enhanced service, but itwould help out a lot of people.’

Earl McKenzie, Head of Waste and Recycling at Ealing Council is equally impressed by ECTGroup’s solutions-oriented approach. Buildingon the success of ECT Group’s open-bookcontract with a neighbouring council, in whichthe organisation helped dramatically increasethe recycling rate for the same amount ofmoney, the contract Ealing Council awarded istaking a similar policy. The open-book systemlooks more like a partnership approach, witheach organisation looking at how best toachieve the desired outcome, assessingfinancial implications and adjusting the priceafter testing out new ideas. ‘If we’re going toget the best out of anything, then we have tohave a genuine partnership because thingschange around a lot, such as weekly collectionsand recycling,’ notes Earl.

This kind of positive experience is the hallmarkof all the relationships between socialenterprises and local authorities featured inthis guide. And while it won’t always be easy,an increasing number of local authorities arefinding that the rewards of procuring fromsocial enterprises more than justify the effort.

Conclusion

C h e c k l i s t 33

1Are you working with socialenterprise networks and other

business networks in order to increasethe number of bids you receive fromsocial enterprises?

3 Do you know what socialenterprises operate in your area?

How many are on your approvedsupplier list, and are there any obvious gaps?

4 Are local social enterprises awareof upcoming opportunities and

encouraged to bid for advertisedtenders? Are you running regular ‘meet the buyer’ days?

5 Have you considered how yourfinancial regulations and other

contract requirements may act as a barrier and how you could change them?

2 Do you know what work otherpeople in your organisation are

doing around social enterprise?

6 Are you carefully considering allthe different options before

aggregating contracts?

7 Have you taken a strategic look athow social enterprises could help

you deliver your corporate objectives?Would a strategy for social enterprisehelp you achieve this?

10 Are you providing feedback tosocial enterprises whose tenders

are unsuccessful and directing them tosources of support?

8 Could you take a more creativeapproach to achieving wider

social and environmental benefitsthrough your procurement process? Could social enterprises help inachieving this?

9 Are there opportunities for jointworking with other departments

within your organisation, or with otherparts of the public sector such as the NHS?

Checklist

Social EnterpriseOrganisations

UK-wide

Community Action Network (CAN)– works to develop, promote and support social entrepreneurs.Tel: 0845 456 2537www.can-online.org.uk

Community Transport Association(CTA) – promotes excellence in community transport.Tel: 0870 774 3586www.communitytransport.com

Co-operativesUK – the centralorganisation for co-operativeenterprises in the UK representingthe interests of their member co-operatives.Tel: 0161 246 2921www.cooperatives-uk.coop

Development Trusts Association –the national umbrella body for development trusts.Tel: 0845 458 8336www.dta.org.uk

Social Enterprise Coalition (SEC) – the UK’s national body for social enterprise. Tel: 020 7793 233www.socialenterprise.org.uk/procurement

Social Enterprise Unit (SEnu) –part of the DTI Small BusinessService.www.sbs.gov.uk/socialenterprise

Social Firms UK – createsemployment opportunities fordisabled people through thedevelopment and support of social firms.Tel: 01737 764 021 www.socialfirms.co.uk

Sports & Recreation TrustsAssociation (SpoRTA) –representing Leisure Trusts, non-profit distributingorganisations that manage sportand leisure centres open to thegeneral public.Tel: 020 8317 5000www.sporta.org

English regions

North East Social EnterprisePartnership (NESEP) – working tocreate a vibrant social enterprisesector in the North East.Tel: 0191 270 4565www.nesep.co.uk

RISE – the voice for South Westsocial enterprise, supporting thedevelopment of sustainable socialenterprises in the region.Tel: 01392 473 465www.rise-sw.co.uk

Social Enterprise East Midlands(SEEM) – works across all sectorsin the East Midlands to enablesocial enterprise to develop and grow.Tel: 0115 845 6434www.seem.uk.net

Social Enterprise East of England(SEEE) – promotes, celebrates and shares social enterprises’successes and assists inimplementing best practicethroughout the East.Tel: 01727 813 401www.seee.co.uk

Social Enterprise London (SEL) –the heart and voice of the socialenterprise sector in Londonpromoting community, bestpractice, advocacy & development.Tel 020 7704 7490www.sel.org.uk

North West – contact DaveHollings, Co-operative & MutualSolutions. Tel: 01254 706 [email protected]

Listed below are a range of organisations anduseful publications where you can get furtherinformation and advice. For additional resourcesvisit www.socialenterprise.org.uk/procurement

34 F u r t h e r r e s o u r c e s

Further resources

Yorkshire & Humber – contactJanette Cawcutt at Yorkshire &Humber Regional Forum.Tel: 0113 200 [email protected]

West Midlands – contact AndrewColler at West Midlands Centre of Excellence. Tel: 01527 [email protected]

Sub-regional and local socialenterprise bodies – there are anumber of sub-regional and localsocial enterprise support bodiesacross the UK. For more details oforganisations in your area visitwww.socialenterprise.org.uk/

Scotland

Social Economy Unit – the Unit isworking with partners across thepublic sector to address issuesrelating to social enterprises andprocurement. Contact: Geoff PopeTel: 0131 479 [email protected]

Scottish Social EnterpriseCoalition (SSEC) – a collectivevoice for social enterprise inScotland, SSEC promote andrepresent the needs of social enterprises. Contact: Antonia SwinsonTel: 0131 557 1516www.ssec.org.uk

Forth Sector – as well as settingup and running social firms, ForthSector has a wealth of experiencein relation to procurement and isleading an initiative to develop‘public-social partnerships’ withlocal authorities in Scotland.Contact: Kevin RobbieTel: 0131 539 7374www.forthsector.org.uk

Highlands and Islands SocialEnterprise Zone (HISEZ) – hasspecific expertise in relation toprocurement in a rural context. Contact: Clive Sheppard,Development WorkerTel: 01463 [email protected]

Wales

Contact Simon Harris, ChiefExecutive, Wales Co-operativeCentre.Tel: 029 2055 4955www.walescoop.com

Northern Ireland

Contact the Social EconomyAgency.Tel: 028 7137 1733www.socialeconomynetwork.org

Public ProcurementBodies

Improvement & DevelopmentAgency (IDeA) – working inpartnership with all councils todevelop the sector, the IDeA hasdeveloped a suite of procurementservices to support councils inimproving procurement. Tel: 020 7296 6880www.idea-knowledge.gov.uk

Local Government Association(LGA) – exists to promote betterlocal government by putting localcouncils at the heart of the driveto improve public services.Tel: 020 7664 3131www.lga.gov.uk

Office of Government Commerce(OGC) – works with government to improve procurement andproject/programme managementand with suppliers to make thegovernment marketplace moreefficient and attractive tobusiness.Tel: 0845 000 4999www.ogc.gov.uk

Office of the Deputy PrimeMinister (ODPM) – governmentdepartment responsible for localgovernment. Aims to improvedelivery and value for money of local services.Tel: 020 7944 4400www.odpm.gov.uk

F u r t h e r r e s o u r c e s 35

36 F u r t h e r r e s o u r c e s

Public Private PartnershipsProgramme (4ps) – the localgovernment procurement expert,providing advice, guidance andskills development to localauthorities undertaking projects,procurement and partnerships.Tel: 020 7808 1470www.4ps.co.uk

Regional Centres of Excellence –the first line of support andguidance on procurement,partnering and efficiency in theirregion, the nine Centres ofExcellence have been establishedto support the implementation of the National Strategy and the delivery of council efficiencytargets.www.rcoe.gov.uk

Small Business Service (SBS) – an executive agency of theDepartment of Trade and Industry,the SBS has a number of policiesand programmes to promote SMEaccess to public procurement. Tel: 020 7215 5000www.sbs.gov.uk

Society of Procurement Officers inLocal Government (SOPO) –advises local authorities across theUK on all purchasing and suppliesmatters of national/generalinterest, and represents itsmembers on other bodies topromote the society and its aims. It provides area networks andforums and produces guidance on best practice.Tel: 0141 332 8247 ext. 327www.sopo.co.uk

Useful publications

Aggregation – is bigger alwaysbetter?, Office of GovernmentCommerce, 2004, available fromwww.ogc.gov.uk

Competitive Procurement –learning from audit, inspection andresearch, Audit Commission, 2002,available from www.audit-commission.gov.uk

Joint Note on Environmental Issuesin Purchasing, OGC and DEFRA,2003, available fromwww.orgc.gov.uk

Government: Supplier andCustomer?, Better RegulationTaskforce & Small BusinessCouncil, 2003, available fromwww.brtf.gov.uk

National Procurement Strategy forLocal Government, ODPM, 2003,available from www.odpm.gov.uk

Public spending for public benefit,Justin Sacks, nef, 2005, availablefrom www.neweconomics.org

Proactive procurement – Achievingquality services and implementingpolicy objectives by procurementfrom social enterprises, Co-operativesUK, Social Enterprise Eastof England & Anthony CollinsSolicitors, 2004, available [email protected]

Small Business (SME) FriendlyConcordat: good practiceguidance, ODPM, LGA & SmallBusiness Service, 2005, availablefrom www.odpm.gov.uk

Smaller Supplier…better value?,OGC & Small Business Service,2005, available fromwww.ogc.gov.uk

Social Issues in Purchasing, OGC, 2006, available fromwww.ogc.gov.uk

Sustainability and LocalGovernment Procurement, IDeA,2003, available from www.idea-knowledge.gov.uk

Think smart…Think VoluntarySector, Home Office & OGC, 2004,available from www.ogc.gov.uk

Resources for SocialEnterprises

Public Procurement: A Toolkit forSocial Enterprise – in 2003 theSocial Enterprise Unit at the DTIproduced a toolkit to give socialenterprises across the UK access tothe best possible information andadvice on how to win governmentor public sector business.

The toolkit is available fromwww.sbs.gov.uk/socialenterprise

Also seewww.supplyinggovernment.gov.uk an Office of GovernmentCommerce and Business Linkwebsite with advice on sellingproducts and services togovernment in England.

This guide has been produced aspart of the SEC nationalMainstreaming Partnership whichis funded by the European SocialFund under the Equal CommunityInitiative Programme, and the DTISmall Business Service.

The Social EnterpriseCoalition (SEC) is the UK’snational body for socialenterprise. As the voice ofthe sector, SEC provides aplatform for showcasing thebenefits of social enterprise.We share best practice and influence policy in orderto create an enablingenvironment for socialenterprise. To find out more visit:www.socialenterprise.org.uk

The New EconomicsFoundation (nef) is anindependent think-and-do tank that inspires and demonstrates realeconomic well-being. We aimto improve quality of life bypromoting innovativesolutions that challengemainstream thinking oneconomic, environment andsocial issues. We work inpartnership and put peopleand the planet first. To find out more visit:www.neweconomics.org

The Society of ProcurementOfficers in Local Government(SOPO) advises localauthorities throughoutEngland, Wales, Scotland and Northern Ireland on allpurchasing and suppliesmatters of national/generalinterest, and represents itsmembers on other bodies to promote the society andits aims. It provides areanetworks and forums andproduces guidance on bestpractice. To find out morevisit: www.sopo.co.uk

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