MASULLO, R.; NUNZIATA, V.

The contribution that social enterprises make to the UK economy can be gauged, partly, by looking at (i) how many people they employ, and (ii) the total turnover they generate. Despite the limitations, outlined above, associated with these data, the most recent Cabinet Office (2013) report indicates that the 70,000 social enterprises thought to be operating in the UK employ 973,700 people, which represents 6.8% of all individuals employed by SMEs (BIS, 2013a). Regarding turnover, the Cabinet Office (2013) estimates that the total turnover generated by social enterprises is around £120 billion, which represents 7.5% of turnover for all UK SMEs (BIS, 2013a). These figures, if true, suggest social enterprises make a significant, if small, contribution to the UK economy.

In terms of their wider contribution, i.e. not just financial, several methodologies for measuring their social impact have been developed (Peattie & Morley, 2008). Frequently

mentioned impact tools include the social return on investment (SROI), the practical quality assurance system for small organisations (PQASSO), ‘prove and improve’, and the balanced scorecard performance measurement method (Arvidson et al., 2013; McLoughlin et al., 2009). Indeed, there has been perceived increased pressure to do so due, in part, to (i) social economy organisations’ increased involvement in delivering public services (Chew & Lyon, 2012), which brings more government scrutiny (Dacombe, 2011; Wimbush, 2011), (ii) the passing of the Public Services (Social Value) Act 2012, which requires commissioners to consider the wider social impact that organisations can provide (Teasdale et al., 2012; Wilson & Bull, 2013), and (iii) a more competitive funding environment in the context of austerity, requiring organisations delivering public services to demonstrate, more so than usual, value for money (Arvidson & Lyon, 2014).

However, academic research in this field is at an early stage and there is a lack of robust, comprehensive studies on social impact measurement (Harlock, 2013). This could be due to the difficulties associated with operationalising ‘impact’, which is ambiguous, in addition to the abundance of approaches available to measure it (Hall, 2014). Indeed, quantifying social outcomes that cannot be easily monetised is no easy task (Bielefield, 2009; Nicholls, 2005; Ruebottom, 2011). Furthermore, more generally, conceptual confusion over the definition of social enterprise, recently lamented by Young & Lecy (2014), can hinder attempts to study their activities (Lyon & Sepulveda, 2009).

One of two exceptions to the general lack of research in this area is a recent study on the use of SROI in a small, GM-based social enterprise: the Wooden Canal Boat Society (Wilson & Bull, 2013). SROI is designed to measure value that may not otherwise be taken into account, i.e. social value, and monetise it (Arvidson et al., 2013). The study serves to highlight complexities involved in operationalising SROI, with the authors commenting that although its application provided a “rich learning experience for all those involved”, the process was “challenging and exhausting” and that the “accuracy of the [SROI] ratio is compromised and implicated by the time and resources that are available” and who to include and exclude from the forecast, i.e. a significant degree of interpretation is left to those conducting the analysis (Wilson & Bull, 2013, p. 315). The scope for judgment and discretion has similarly been noted by the authors of a review on the application of SROI (Arvidson et al., 2013).

Another exception is a report produced on behalf of the Department of Health (2010), which sought to measure the SROI generated by five social enterprises in health and social care. Each organisation undertook an SROI analysis on one or more of their services. It identified that, for every £1 of investment, there was a social return of between £2.52 and

£5.67 – the return was calculated from different sources ranging from quality of outcomes to outcomes not usually associated with the service, e.g. getting a patient back to work sooner or children attending school more regularly (Department of Health 2010). New Labour’s Social Enterprise Unit produced this report. As such, its findings, although positive, must be seen in the context of a government that had an interest in promoting the role of social enterprises in delivering health and social care (Teasdale, 2012a), particularly, as highlighted above, because of the scope for interpretation and discretion in conducting the analysis (Arvidson et al., 2013; Wilson & Bull, 2013). Nevertheless, it provides a small indication of social enterprises’ wider contribution.

By looking at where social enterprises operate, and what services they provide, it is possible to get an idea of their social impact. Data from the most recent SEUK survey (Villeneuve-Smith & Temple, 2015) show that, for the majority of UK social enterprises, their area of operation is confined to (i) the local neighbourhood, (ii) one local authority, (iii) several local authorities, or (iv) a single region, as opposed to multiple regions or across England, Scotland, Wales and Northern Ireland. This suggests most organisations have a local community focus, which is consistent with the literature (e.g. Defourny, 2001; Lyon, 2009; Reid & Griffith, 2006). They also seem to be most active in areas of greatest deprivation, with 38% of social enterprises working in the most deprived UK communities (Villeneuve-Smith & Chung, 2013), such as Manchester, Rochdale and Salford, which comprise three of the ten local authorities in GM and are ranked in the top 10% most deprived nationally by the Index of Multiple Deprivation (Department for Communities and Local Government, 2015). On this basis, social enterprises may be well placed to tackle social inequalities (Donaldson et al., 2011; Roy et al., 2013).

In this regard, Roy et al. (2014) reviewed existing evidence on the potential for participation in social enterprise activity to act as an ‘upstream’ (Williams et al., 2008) health intervention and address social inequalities in health. They find (limited) evidence, primarily from social firms and WISEs, that participation in social enterprise activity can improve mental health outcomes, enhancing self-confidence or self-esteem (Ferguson & Islam, 2008; Ho & Chan, 2010; Williams et al., 2012) and act on social determinants of health, providing, for example, training to improve chances of future employment (Krupa et al., 2003). Also, three of the five studies they found (Ferguson, 2012; Ho & Chan, 2010; Tedmanson & Guerin, 2011) showed the potential for social enterprise to address inequalities, acting as a mechanism for building social capital by providing opportunities for disadvantaged and marginalised groups to develop social networks and improve career prospects (Roy et al., 2014). Based on this evidence, they propose a model showing how participation in social

enterprise activity might improve health and wellbeing, which recognises the role of ‘good’ work. However, they caution that heterogeneity of the study designs, involving small samples and specific populations “makes generalisable claims difficult” (Roy et al., 2014, p. 190). Nevertheless, the review offers insight into the wider contribution social enterprises can make through participation in social enterprise activity, which is valuable as little is known about what it is like to be involved in the social economy (Amin, 2009).

Evidence of social enterprises’ social impact can also be inferred from how they pursue their social mission. Data from SEUK show that a majority (60%) of UK social enterprises seek to ‘create employment opportunities’ (Villeneuve-Smith & Temple, 2015). In addition, almost two thirds (63%) draw their entire workforce (100%) from their locality, and a quarter (25%) draw between 50-99% of it locally. Assuming these data are correct, the vast majority (88%) of social enterprises draw, at least, half of their workforce from the local communities they are set up to improve. These data are consistent with the view that social enterprises tend to recruit staff locally (Social Enterprise Scotland, 2012; The Young Foundation, 2011; New Economy, 2014; Social Enterprise and Entrepreneurship Taskforce, 2012). Reid & Griffith (2006, p. 3), for example, state that the local community encompasses almost everything a social enterprise does, including where it draws its staff from:

“Not only do local communities serve as the context for social enterprise, from which social entrepreneurs emerge, but they comprise also the major beneficiaries, for whom many social enterprises are created, as well as the consumers and employees of these businesses and organisations.”

This view is also consistent with qualitative findings from a study exploring business practices in social enterprises across GM and Lancashire, where it was found that “organisations spoke about how they chose to employ people within the community” (Bull & Crompton, 2006, p. 50).

Therefore, given that (i) many social enterprises pursue their social mission through the provision of employment, (ii) there is theory, and evidence, to suggest they employ local people, and (iii) “their raison d'être is to improve the lives of individuals and communities” (Roy et al., 2013, p. 61), it would, arguably, be inconsistent with their ethos, and, possibly, even counterproductive to their aims, to expose their staff, who could be members of the communities they are set up to improve, to poor quality working conditions that might adversely affect their health. In this sense, the social mission, which “lies at the heart of every social enterprise” (Roy et al., 2013, p. 61), could serve as an incentive to provide working

conditions that are conducive to employee health and wellbeing. Support for this view comes from Amin (2009, p. 47) who found that employees working in social economy organisations in Bristol “spoke of an ethic of care and social participation that underpinned the ventures they were involved in” that they perceived as lacking in private and public sectors.

There are reasons to suggest that social enterprises do provide working environments conducive to employee health and wellbeing. Two indicators, discussed earlier in Sections 2.3.2 and 2.3.3, respectively, are that they (i) involve staff in the decision-making process, and (ii) provide employees with adequate support. Further indications that social enterprises provide ‘good’ work thought to positively impact upon health and wellbeing come from qualitative research on social firms and WISEs. The research suggests these organisations provide “on-site job coaching”, “personal and life skills counselling” (Morrow et al., 2009, p. 667), “opportunities for skill development” (Paluch et al., 2012, p. 70), opportunities to “participate in certificated training courses” and “take on responsibilities such as supporting newer employees or working with minimal supervision” (Williams et al., 2012, p. 57), and “on-the-job training” (Ho & Chan, 2010, p. 38). There is also qualitative evidence from 15 social enterprises located in GM and Lancashire that finds they provide both training opportunities “along traditional lines; human resource, finance, marketing, healthy and safety, etc.” and opportunities “that were not directly related to their work or the organisation”, i.e. “individual learning and personal development” (Bull & Crompton, 2006, p. 50). Again, these findings are from small samples and, for those derived from studies on social firms and WISEs, involve specific populations, therefore generalisable claims are difficult. Nevertheless, they at least provide an indication that working for a social enterprise, potentially, provides opportunities for skill training, learning, personal fulfilment and development, which are considered determinants of ‘good’ work (Marmot et al., 2010; Waddell & Burton, 2006).

Although there is a lack of it, the available quantitative evidence presents a similar picture. A recent SEUK survey (Villeneuve-Smith, 2011) reports that 82% of respondents felt, either to a large, or to some, extent, that their social enterprise ‘invests well in staff training and development’. While not directly comparable, data on SMEs show only 59% say that they have provided any professional development for their staff at all in the last 12 months, including on the job training (BIS, 2011). Also, evidence from an Italian dataset, comprising public bodies, for profit and non-profit organisations, social co-operatives – and over 2,000 employees – finds staff in social co-operatives report significantly more satisfaction with ‘professional development’ than those employed in other organisations (Borzaga & Depedri, 2009; Borzaga & Tortia, 2006). Furthermore, research involving 244

women working in 57 Swedish day care centres finds that, relative to their counterparts employed in municipal day care centres, social enterprise day care centre employees report “improved possibilities for personal development” (Pestoff, 2000, p. 58). Again, these findings are subject to certain limitations. For example, the data from Sweden and Italy may not be applicable to UK social enterprises, especially so given the alleged differences in UK and European conceptualisations of social enterprise. Also, in Pestoff’s (2000) study, the research was confined to women working in a specific type of organisation, a day care centre; therefore, they may not be applicable to both men and women working in other organisation types.

Taken together, these qualitative and quantitative findings, notwithstanding their limitations, provide an indication that social enterprises may place particular emphasis on providing opportunities for skill training, learning, personal fulfilment and development, which are considered determinants of ‘good’ work thought to positively impact upon health and wellbeing (elaborated on in Section 2.6).