Review of the year 2013 (part 2)

In the second part of my review of the year, I look at what the last six months has meant for the UK Social Economy. 

The Social Economy - a race with lots of humps?
The Social Economy – a race with lots of humps?

And they’re off! things really gathered pace for the sector during July. So while I was busy watching Camel racing, BIS and the City of London were crunching numbers. They released an important report showing that the social investment market grew by almost a quarter in 2011/12. And if that wasn’t exciting enough, Chris White MP, architect of the Social Value Act, was appointed as the government’s Social Value Ambassador (whatever that means?). Oh yeah, and a baby was born who will one day be your superior. Congrats!

Hot in the city: if you’d managed to get all the way to August without hearing about Social Impact Bonds (SIBs), further congratulations! SIBs were in the press over the summer for all the wrong reasons though – Social Market Foundation questioned whether the benefits supposedly generated by SIBs will materialise in reality, whilst a report looking at Allia’s ‘Future for Children’ bond highlighted several reasons why it didn’t work as planned, including ‘too short a timescale’ and ‘marketing challenges’, amongst others. Nonetheless, SIBs would be a major conversation piece throughout the remainder of 2013, to the point where my dreams were constructed by multiple investors.

The promised land? Yet over the hump and rolling down hill towards the end of the year, things increasingly looked up for the sector. September saw a flurry of announcements that all promised so much:

  • at their party conference, Labour really got things going by promising to introduce a 20-month freeze in energy prices. Spotting an opportunity, the Social Economy Alliance wrote to Ed Miliband, showcasing the work of cooperatives and social enterprises in the energy sector. In their letter the Alliance pushed for a ’21st Century debate’, arguing it “must not be about big state versus big business. But about big problems versus big opportunities”
  • members of the G8’s Social Impact Investment Taskforce were announced, with the UK sending representation from the Cabinet Office and Sir Ronald Cohen
  • Ministers said they were going to re-draft the lobbying bill in light of concerns from charities that it would limit their ability to campaign on social issues 
  • buoyed by the growing number of Community Interest Companies (CICs) opting for the Social Enterprise Mark (SEM), the CIC Regulator and SEM joined forces in order to exchange information and provide feedback on relevant issues relating to CICs.

Ah, the heady days of September!

Reality check: sometimes though, when you’re going too fast, the wheels can start to come off. So in less than a month the sector went from hoping its’ calls hadn’t fallen on deaf ears, to realising they most definitely had. Despite best efforts, proposed amendments to the Lobbying Bill were defeated after it passed its third reading.

The good news was also short-lived for SEM, as someone unilaterally decided that what the world needs now is another certification scheme for social enterprise. It remains to be seen whether or not it will work, but given that less than 450 social enterprises have used its main competitor Social Enterprise Mark, the outlook is pretty hazy.

Elsewhere, the Tories used their party conference to bash Labour for being anti-business, prompting the Social Economy Alliance (SEA) to respond with a letter about the need to get beyond the ‘pro-business/anti-business’ dichotomy. SEA also jumped on the news that the Financial Conduct Authority has planned tighter regulations for payday lenders, highlighting the potential of credit unions (among others) in this area.

Ah, how I long for those heady days of September!

Cometh the hour?
Cometh the hour?

The wheels fly off: in November there were two big stories, both tangentially related to substance misuse. Firstly, comedian-come-revolutionary Russell Brand got everyone excited about not voting. Then, just to prove substance misuse is no barrier to responsibility and influence, news emerged that former Chair of the Cooperative Bank, Rev Paul Flowers, was filmed buying coke (and not the fizzy variety). This scandal prompted the Chair of the Cooperative Group to resign, as well as speculation that the Co-op Group is too cosy to the Labour party. Labour owes the Co-op around £1.4m, whilst it was revealed its political wing, The Co-op Party, donated £50,000 to Ed Balls. This was all on top of news that the bank is to cut its branch network by 15%, bringing to close a bad, bad month for the cooperative brand.

With all this hubbub it is little wonder then that you may have missed the launch of the Social Investment Research Council and the launch of EngagedX, the world’s first financial index and data platform for social impact investing. Expect both to play key roles in the sector during 2014.

A fresh start? despite a bumpy year, December brought real change and hope for the Social Economy, most notably through the Chancellor’s Autumn statement. This promised:

  • cuts in national insurance contributions for businesses employing young people
  • plans to cap inflation increases in business rates
  • plans to provide a tax relief on investment in SIBs, and;
  • the final shape of the Social Investment Tax Relief (SITR), though it is subject to the EU’s limits on State Aid.

More details can be found here, though the SITR generally seems to be good news. Alongside these developments, the CIC regulator agreed to remove the dividend cap from the CIC limited by shares structure, so the future really is looking bright.

nelson-mandela-quotes-sayings-wise-wisdom-lifeDecember also brought the sad news of Nelson Mandela’s passing, serving to remind us of what can be achieved when good people stand up and do something. An ambition we should all surely aim for in the year ahead.

2014 and beyond…so what do you think the next year holds? More growth in the social investment market? More problems at the Coop Bank? Let me know what you think below. In the meanwhile, have a great New Year!


Review of the year 2013 (Part 1)

2013 was another big year for the UK. The economy finally came out of recession, Andy Murray became the first British man in a billion years to win Wimbledon,  and we all got introduced to our new overlord, Prince George. 

But what did 2013 bring for the UK Social Economy? In the first of two posts, I take a look at the good, the bad and the downright ugly of the UK Social Economy in the first six months of this year. 

January blues? Like someone who’d got carried away at the office party, the UK Social Economy spent January reaching for the Alka Seltzer. Now the mistletoe had been packed away, cracks began to show in the marriage of convenience between social entrepreneurs and financiersBen Metz wrote a challenging article questioning whether impact investing actually puts power in the hands of investors and, in doing so, stifles social change and innovation. This followed on from a piece by Dan Gregory, who argued that the language around social investment has radically changed over the last ten years, making it all about the investor and not about the finance needs of social ventures. As 2013 rolled on, this would emerge to be a pertinent conversation. 

The Snowman cometh: February saw zero temperatures and snow sweep across Britain. I spent much of the month in Eastern Europe however, where the temperature was -8c with two feet of snow. The big news for Feb of course was the return of Milan Baros to his hometown club of Banik Ostrava. I witnessed a scintillating 0-0 draw against SK Dynamo České Budějovice, in which Baros came on and did nothing. For this guy in the picture below though, this was the most exciting thing to happen in Ostrava on a Saturday in February. EVER!

The Social Value Act - cause for celebration?
The Social Value Act – cause for celebration?

Presumably there were similar scenes in the UK, which saw the introduction of the Social Value Act, which would turn out to be another big conversation piece for 2013.  This wasn’t the only sign of growing political support for the Social Economy however.

The World Economic Forum kicked off in Davos armed with flowers and chocolates, in a bid to convince those jaded social entrepreneurs to get back in to their nice warm bed. Of course some representatives had ulterior motives, as it emerged that the UK was lagging behind the rest of the G8 on solving the youth unemployment crisis. The Social Economy would be increasingly touted as the solution to this over the rest of the year. 

Picking up a gallop: Findus lasagnes became even less appealing when it was revealed in March that they contained horse meat, alongside a range of other products (though I’d always had a ‘nagging’ feeling they might). There was no horsing around in the UK however, with several key developments including the announcement of the Social Stock Exchange and the Chancellor Jeffrey Osborne pathing the way for the introduction of a Social Investment Tax Relief (SITR) for the first time. Jeffrey also accepted the recommendations of Lord Heseltine’s report on regional development, resulting in the creation of Local Enterprise Partnerships (LEPs).

Spring in their step?
Spring in their step?

Out of the darkness? As the snow melted away the UK finally came out of recession in April, prompting increased confidence in Whitehall.  With renewed swagger, the UK Government increased the minimum wage (up 12 whole pence an hour for adults and a whopping 5p for young people) and introduced the ‘Bedroom Tax‘, penalising housing benefit claimants who have a spare room. Meanwhile, they punished those tax evading millionaires and what not by taking 10% of their tax bill. Clearly, we’re all in this together. 

No doubt they were discussing such hypocrisy at length at the Skoll World Forum. Presumably just after they discussed disruption, innovation, disruptive innovation, intrapreneurship, impact measurement (x2) and the mother of all buzzword-laden articlessocial innovation in acceleration – building the social impact bond ecosystem‘.

Still, at least we’re keeping it real. While it is unlike Social Economy practitioners and commentators to jump on bandwagons or make tenuous links to popular news stories, the sector welcomed the news of Margaret Thatcher’s death by thanking her for making social enterprise a reality. And no, not because she gave us lots of social issues to address. 

Heating up: things really started heating up in May, and not just because the Sun finally came out. UKIP ruffled more than a few feathers politically with a successful turnout at the local elections, half a million people were found to be using Food Banks, and Dame Mary Marsh released the findings of her ‘social sector skills review’. The sector of course galvanised around the latter issue, unleashing a flurry of websites on an unsuspecting world (read more here).  

Boiling point: June was by far the biggest month of the year for the UK Social Economy, as London hosted the first ever G8 Social Impact Investment Forum. The Government took the opportunity to announce loads of stuff it had, erm, already announced, such as the Social Stock Exchange and the Social Investment Tax Relief (see March). One genuinely new announcement however was the news that Big Society Capital is going to dish out 250 million big ones to good causes over some unspecified period.

June also saw several other notable events, including:

  • the launch of the Social Economy Alliance, made up of over 20 of UK’s leading social sector organisations campaigning to support Britain’s social economy. The Huffington Post suggested it could be “one of the greatest business stories in our modern history”. So no pressure there then!
  • Richard Branson also got in on the act, launching The B Team. It was never heard of again.
  • Elsewhere, economist Vicky Pryce celebrated her release from prison by chairing an event asking ‘Can Social Finance meet social need?‘ The event was used to officially launch and discuss a report that had been around for a while, but which would turn out to be quite influential on future discussions of social finance later in the year. 
  • The wheels started coming off at the Co-op Bank, as they sought to plug a £1.5bn gap in their finances. The true extent of this farce would only emerge towards the end of the year. 
  • Finally, the sector went stats mad! Firstly, SEUK released their State of Social Enterprise survey, which showed “almost half of social enterprises sought finance in 2012, twice the number of SMEs, but…access to finance remains single biggest barrier to growth”. Then on the back of a separate report, Nick Hurd claimed that there are 688,000 social enterprises in the UK, contributing more than £55bn to the economy! In the same speech he also claimed to have had dinner with Bigfoot and know where Elvis lives (possibly).

But how do you think the first half of the year shaped up for the Social Economy? Were you pleased, disheartened? Let me know below.

Watch out for the second half of this review before the end of the year. In the meanwhile, have a great Christmas!


Fast Social: news in/for the social economy – week 50

Cheap social finance anyone?
Cheap social finance anyone?

If the ‘social enterprise sector’ was a soap opera, it’d be Eastenders. All the ‘drama’ seems to happen in some fantastical realm of London that people rarely leave, though occasionally someone with a strange accent pops up or there’s a ‘location shot’ (a bit like when Arthur and Pauline went to Eastbourne for their ill-fated holiday).

Here’s a round-up of what went down on ‘Albert Square’ this week:

  • Darn the maaarket: the UK’s first ‘social supermaket’ launched in Goldthorpe this week in a bid to fight food poverty. The Community Shop gives local shoppers access to surplus food from supermarkets for up to 70% less. Yet Pete Beale and Martin Fowler are nowhere to be seen.
  • Strange accents heard on the square: no not Cockneys, but Yanks. USAID (the US Agency for International Development) has found 2 million big ones to support young entrepreneurs. Other than investing in young people, it was announced that the partnership will foster the growth of the social entrepreneurship sphere. Ian Beale was seen rubbing his hands together at this ‘business opportunity’
  • Unusual meeting held at Queen Vic: sounding like the beginning of a joke (an acronym walks in to a B.A.R…), the World Economic Forum (WEF) has launched the Global Learning Exchange on Social Impact Investing (GLE), in collaboration with the Impact Investing Policy Collaborative (IIPC) and the support of the UK Cabinet Office. No, I can’t wait either…
  • Out in the sticks: the whole of Cornwall is now a ‘Social Enterprise Zone’. Real Ideas Organisation and SEUK have got together to create the first rural Social Enterprise Zone in the UK.
  • Yoof of today: the Social Business Trust is providing £15,000 and four months of professional support to Young Advisors. YA are a group of over 1,300 community consultants between the ages of 15 and 21 who help organisations make evidence-based decisions on new projects for young people.
  • Family spat: ClearlySo CEO Rodney Schwartz wrote an article for Third Sector magazine on the merits of equity for social enterprises, a controversial subject on the square. The third Mitchell brother (Dan Gregory) wrote a witty response here.
  • All about the reddies: the final shape of the social investment tax relief was announced on Tuesday. This blog has more detail but basically the SITR is generally good news, though it is subject to the EU’s limits on State Aid. Furthermore, the CIC regulator has removed the dividend cap from the CIC limited by shares structure. But SEUK aren’t happy about how these changes affect companies limited by guarantee (or don’t as the case may be).



Fast Social: News in/for the Social Economy – week 48

If Gabriel Garcia Marquez were alive today, perhaps he would have entitled his magnum opus ‘One Hundred Years of Backslapping’?

Hot on the heels of the SE100 awards (2 weeks ago) and Social Enterprise Day (1 week ago – read more here), the Social Enterprise Awards took place this week. There were 11 award categories in total (read the full list here), with the ‘Social Enterprise of the Year’ award going to The Link Group, who provide ‘new and improved homes for rent and sale, community regeneration services and support and care to over 10,000 people in Scotland’. Goodie Bags on the night were provided by The Cooperative Bank. Hopefully they didn’t let Paul Flowers near them, though the sector could probably do with a 1990’s Brit Awards style event every now and again (plenty of candidates for Michael Jackson, though who’d be Jarvis?)

There were several interesting articles in The Granuiad this week relating to ethics and what not. Here they discuss the challenges facing the Co-op Group in the next six months in trying to strengthen its governance while maintaining its democratic principles. They highlight the mobilisation of Co-operative activists to engage in this debate, who recently took to Twitter to discuss how the Co-op Bank’s ethical stance played out in practice, particularly during the 90’s (they’d have probably mooned Jacko back then too). Oh yeah, and Channel 4 also stirred things up by describing themselves as a social enterprise.

Speaking of integrity, two charities oop norf have walked away from local authority contracts because they consider the terms of service to be unacceptable. They are literally refusing money on the basis of their principles – fancy that! And in more heart-warming news for the Third Sector, Demos report that the presence of Charity shops actually contributes to, rather than detracts from, the vibrancy of high streets. Though how they make estate agents, hairdressers and chicken shops more vibrant I’m not quite sure.

All of this is tenuously linked to The Great Leader of the Quiet Revolution’s plan to possibly, just maybe, provide financial support for charities that have used their reserves up as a result of the spending cuts his own government implemented. What an incredibly prescient thing to do – if only it had been predicted that this may happen!

Finally back in Macondo, international fund manager Threadneedle and Big Issue Invest have collaborated to launch the ‘Threadneedle UK Social Bond Fund’, which will be available to retail and institutional investors from early next year. And 45 minutes outside the City of Mirrors, Allia has raised £4.2m bond funding for a social enterprise centre. Located in Cambridge, the centre will be home to about 50 charities and social-purpose organisations.


Fast Social: News in/for the Social Economy – week 47

“Scandal after scandal – corporate greed and the worst excesses of capitalism are rife. Businesses acting in their own self-interest, customers’ needs coming last…How many of us are sick of hearing the same headlines over and over again?” asks Lucy Findlay, MD of Social Enterprise Mark in her prescient contribution to The Guardian’s 50 Voices project.

Unfortunately the above quote was published the same day it was revealed that there’s going to be not one, but three separate inquiries in to what is going on at The Cooperative Bank, which has become mired in ‘scandal after scandal’.

Following recent concerns over the £1.5bn hole in its finances, former Chair of the Bank Rev Paul Flowers further dragged its name through the mud after being filmed buying coke (not the fizzy variety). This scandal then prompted the Chair of the Cooperative Group to resign , as well as speculation that the Co-op Group is too cosy to the Labour party. Labour owes the Co-op around £1.4m, whilst it was revealed its political wing, The Co-op Party, found £50,000 down the back of the sofa and handed it over in an envelope marked ‘Ed Balls’. Read more about the whole thing here.

tumblr_inline_mmhwb6rVbm1qz4rgpWhile my previous post suggested the social economy needed to get more badass, this is not what I had in mind. Other than being great for gossips, the whole affair has undermined both the bank’s chances of a full recovery and the wider cooperative and mutual movements credibility. And the problem is not just in the UK, as one of the businesses comprising the Spanish cooperative giant Mondragon is about to go bust too.

And all of this happening during Global Entrepreneurship Week, where the message should have been ‘there’s another way of doing business’. Actually, despite these setbacks that was still the message. There’s been far too many things going on this week to report, but there were two particularly attractive announcements that caught my eye (and by attractive I mean if you live in London and/or use social media. Otherwise, probably not so useful):

Finally, Swiss insurance giant Zurich this week provided a free guide for charities and social enterprises on how to deal with major incidences. Someone should forward a copy to the Co-op! I think the address is 1 Way Down, Endofthe Road, Rochdale.