Social enterprises need more than flowers to woo housing associations

Mark Richardson
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Housing associations and social enterprise should be a marriage made in heaven, but they often fail to get as far as a disappointing first date. What’s to be done? Mark Richardson, author of a recent report on social enterprise and the housing sector, suggests a strategy

A good place to start for any partners in a relationship is by getting to know each other. Housing associations are social enterprises by any definition; they are not-for-profit organisations trading for a social purpose. But they are unusual social enterprises. They are large, with significant numbers of staff, resources and assets.  And like most large organisations they struggle to engage with the rest of the social enterprise sector.

Housing associations collectively spend £13 billion a year. Even a tiny fraction of this spend has the potential to transform the social enterprise sector; providing sustainable income streams and creating jobs for disadvantaged people.
 
As public spending cuts bite ever deeper it becomes increasingly important to leverage more of this money into the social economy. And there are some notable beacons amongst housing associations doing exactly that, by buying the services of social enterprises.
 
But there are some issues to work through, both for the housing associations, and for the social enterprises they are trying to buy from. 
 
Firstly, there’s the issue of getting people working for housing associations signed up to the notion of procuring for social as well as financial value. This means the housing association needs to be very clear about its social mission. 
 
It also involves a new way of measuring the performance of procurement teams: on a broad definition of value rather than narrow criteria of unit cost or total spend.  The Social Value Act provides a useful framework for this, but it requires bold strategic thinking from the leadership team to make it happen.
 
Secondly, there’s the challenge of how to find suitable social enterprises. As Peter Holbrook, CEO of Social Enterprise UK, said at the recent National Housing Federation / SEUK conference: “Even I can’t find them half the time!” Most social enterprises are simply not visible when housing associations are looking for suppliers.
 
Thirdly, there’s an issue of capacity. When housing associations do find social enterprises that deliver the goods or services required, they are usually small, they often don’t have the required procedures and paperwork in place, and they may not be able to deliver at the scale or quality demanded by the housing association.  Social benefits are all very well, but they need to be in addition to the core service, not instead.
 
On the other side of the relationship, social enterprises face some big challenges, when it comes to trying to supply housing associations with their goods. Many social enterprises are not usually aware that contracts are being tendered. When they are aware, often the contracts are too large for most social enterprises to contend with.
 
Even if they find out about tendering opportunities and have the ability to deliver the contracts, social enterprises are usually competing against far better resourced contractors who are better at tendering. The result? Endless, time consuming PQQs and no contracts to show for it.
 
So what should be a marriage made in heaven is lucky to make it as far as a disappointing first date. What’s to be done?
 
For a successful marriage, the responsibility lies with the housing associations; they are larger, better resourced and with all the power in the relationship. And there are three things they can do.
 
Firstly, housing associations can develop and implement a social enterprise strategy, which addresses how they will achieve their social objectives by working with, and buying from, social enterprises. This strategy needs to be communicated to staff and suppliers, and their KPIs [key performance indicators] need to depend upon its success. Where there’s a KPI there’s a way.
 
Secondly, they need to engage with the social enterprise sector; make contact through intermediaries, join networks, host events. Listen to what social enterprises can offer, and what they need.
 
And finally, housing associations need to help capacity build social enterprises. They may not find many social enterprises who can deliver what they need off the peg, but with some support, mentoring and investment, the right social enterprise could deliver the service they need, at the quality and scale they need, with the social value they would like to achieve.  
 
For example: providing the security of a 3-year contract, combined with support to build the right systems and processes, and underwriting a loan to expand capacity, could transform a struggling social enterprise into a sustainable and valued supplier. This doesn’t need housing associations to commit any new money, simply make better use of existing spending and resources.
 
The housing sector is poised to play a crucial role in the survival and success of many social enterprises across the UK. A number of housing associations are already leading the way. With more encouragement and support others will follow.

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