2006 Sector Mapping Information
INTRODUCTION
Taken together, the information gathered during the 2005 and 2006 mapping of the Social Firm sector provides valuable information on the Social Firm sector. The information gathered in 2006 was across a wider range of organisations, and taken with the 2005 information we are now beginning to build a more solid picture of the sector. Time constraints at Social Firms UK have meant that comparisons between the two years have not been made in any depth, offering a real opportunity for an external research body to analyse the information on the sector gathered by Social Firms UK to date.
This very short report provides headline information only. Nevertheless, taken with the mapping charts it provides some interesting indications on the health of the Social Firm sector.
Also available to the right and bottom of this document are downloadable reports on the following: - General mapping leaflet
- Overview
- Most significant issues
- Most significant changes
- Legal structures
- Management & finance
- Employment
- Industry sectors.
Sector Change and Growth
• The 2006 mapping identified 137 businesses in the Social Firm sector, an increase of 15% on 2005.
• The 2005 mapping identified 49 Social Firms and 70 emerging Social Firms. In 2006, of the 137 firms identified:
o 67 are full Social Firms (an increase of 37% on 2005)
o 70 are emerging Social Firms (not all are the same firms identified in 2005)
• Five of the Social Firms mapped (Bizmatch, Haven Products, I’SE, Pembrokeshire FRAME and The Pluss Organisation) became the first Social Firms to achieve the ‘Star Social Firm’ quality mark as piloted in 2006/7. This quality mark for the sector was launched publicly on 7th February 2008.
• The Social Firms listed are almost exclusively businesses that provide employment for disabled people, with only two of the firms listed in this mapping providing employment for homeless people. These two firms were added in December 2006 when the definition of Social Firms was expanded to those severely disadvantaged in the labour market. It is anticipated, with this broader definition, that the sector is larger than reflected in the 2006 mapping, therefore, but this information will not be captured until 2007/8.
Geographical Spread
The spread of Social Firms throughout the UK appears to remain uneven. The two regions/nations with the highest number of Social Firms/emerging Social Firms are the West Midlands (26) and Scotland (20). The least developed areas are the North East, Northern Ireland and the North West, each with 4 businesses. However, it is important to note that, due to capacity and time constraints at Social Firms UK, neither the North East or the North West were mapped in any great detail.
Industry Sectors
There appears to have been slight movement in industry sectors between 2005 and 2006:
• Catering has almost doubled from 12% in 2005 to nearly 23% in 2006.
• Horticulture has seen a slight decrease from 12% to 9.8%.
• Horticulture has been overtaken by recycling which now accounts for 10.5% (up from 9%) of the businesses in the Social Firm sector.
• Training is also up from 9% to 10.5%.
Staffing and Employment
Taking the figures as shown for 2005 and 2006 the number of FTE (full-time equivalent) jobs in the sector is up by 422 (34% increase). However, with a better understanding of what businesses are in the Social Firm sector and improved calculations of FTE figures the actual increase is thought to be significantly more.
Disability Focus
Disability focus within the sector remains very similar in 2006 with mental health being the largest single group.
Trainees
Mapping shows that the number of trainees in the Social Firm sector has dropped. This might suggest a more business-like approach, or perhaps, given the increase in firms citing training as (at least a part of) their business, a more formal approach to training in the sector.
Volunteers
Amongst firms questioned most had volunteer agreements in place and there was a clear distinction made between the roles and responsibilities of workers and volunteers, as required by legislation.
Employment Contracts
Almost all firms questioned in 2006 demonstrated that people on Permitted Earnings also have employment contracts. Those that did not showed a positive commitment to making this change.
Legal Structures
Businesses in the sector remain predominantly Companies Limited by Guarantee (17%) and Companies Limited by Guarantee with charitable status (34% - no change from 2005). However the number of Companies Limited by Guarantee has dropped from 33% in 2005 and nearly 11% of those questioned had CIC legal status in 2006. This is encouraging, given that the Community Interest Company is still a very new legal form. A number of firms visited were still unclear about the CIC legal structure and its advantages.
Finance
Of those questioned:
• 60% said cash flow was restricting growth
• 83% said they had ‘minor concerns’ or were ‘concerned’ about their financial situation.
• over 75% said they had good access to financial information
• nearly 55% said they had good access to financial expertise.
Business Management and Planning
Nearly 60% of those questioned said they have a management structure that supports trading as the prime source of Income indicating that there is still much to do in assisting firms to achieve the right balance between employment and support.
The sector has yet to place sufficient importance on having an actively used, up to date business plan (10.9% said they had this).
30% of those questioned said they did not have marketing plan with a further 30% saying their marketing plan was either, ‘In place but not really used’ or ‘In place but needs revising’.
Quality Businesses
The development of quality in the sector is the principal characteristic of 2006. Although there has been little growth in terms of numbers of Social Firms there has been a big shift towards significantly better quality businesses that are set fair to grow and stay the course.
CONCLUSION
The outstanding features of the 2006 mapping would seem to be:
• the identification of a more solid base of continuing Social Firms;
• real growth;
• significant levels of concern about finance;
• overall a positive approach to Social Firm development and business growth; a clear improvement overall in the quality of the businesses visited.
Kathy Baker
Quality Support Manager
June 2007
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