UK: Creating jobs through social enterprise

Five years ago, Kate Welch gingerly entered the world of social entrepreneurship with unbridled enthusiasm, £10 up front, and government contracts to deliver training for the jobless. Today, she oversees an enterprise with a £3.5m annual turnover, over 80 staff, and a range of programmes throughout the north-east of England designed to guide people into work and instil a sense of confidence with training and education. Could this be the start of something big?

Welch is in demand throughout England, getting requests to expand the Acumen Community Enterprise Development Trust into other challenging areas beset by a post-industrial economy, where many big employers have disappeared. “Not many things have gone national from the north-east. Do you not think it’s time?” she asks smiling in her office. It is on an industrial estate in Peterlee new town, County Durham, overlooking an old coalfield area plagued by worklessness, poor health, and attendant social problems. “A lot of people are saying: ‘You seem to have something we haven’t got in our area.’ But I don’t want to rush. We have to remain community focused.”

Some of those people – such as Ed Miliband, the Cabinet Office minister who oversees the third sector – have influence. Welch says: “He said to me, ‘We really need what you are doing in my [Doncaster] constituency.’ So we are thinking about where to go next.”

While others in the north-east coalfield have retreated into depression and hopelessness, Welch can see some hope surrounding every former colliery site and empty factory. Her enthusiasm is infectious. “People say, ‘OK, it’s terrible since the mines closed’ – one of the most deprived parts of the UK. But look at it another way: think of what it could be.”

A world away

Outside her office, the new town and nearby villages appear a world away from a region constantly labelled “depressed”. The coastline over the hill, once littered with colliery waste, has had a multimillion-pound facelift under a regeneration programme called Turning the Tide. Terraces have been spruced up. New housing estates spring up everywhere.

“If you picked up this area and transplanted it into Surrey, it wouldn’t look that different,” Welch enthuses. “The area is very attractive. The coastline is lovely. But you’ve got these underlying social issues … an acceptance of a norm, because what people see is what they’ve always known. And you’ve got family groups where, because the parents didn’t have a job 15-20 years ago as pits closed, they’re still saying to their kids, ‘Well, there aren’t any jobs out there.’ The reality is quite different. So there’s a whole thing about perceptions, aspirations, real issues that can be addressed by changing people’s views.”

Since 2003, Acumen has attracted 3,500 people into its learning programmes, channelled 5,000 into jobs, guided 630 into self-employment, and started and supported eight social enterprises. Its glossy “welcome pack” contains an inviting introduction: “Whatever you want to do … try something new, including learning skills, gain a qualification, explore voluntary work, get a job, or start your own business … your adviser will help you succeed.”

Acumen is multi-faceted. There is a community engagement team, aimed at making initial contact with people ground down by redundancies, particularly in mining and textiles. A learning team offers one-to-one tuition and “confidence building”, while an employment team uses advisers to guide people into work. A recruitment service offshoot, People Acumen, operates like a commercial recruitment agency, providing vital links with employers, while “business coaches” support those interested in self-employment.

But the Welch enthusiasm is matched by realism. In the district of Easington, which provided her inspiration, the Acumen enterprise has certainly helped cut the numbers on incapacity benefit (IB) – those labelled “workless”, yet not included in official jobless statistics. But with a working-age population of around 60,000, a staggering 10,000 remain on incapacity benefit, and Welch estimates that just 1,000 are officially unemployed. “Terrifying, isn’t it?” she laments. “Although the numbers are down by 2,000, it’s still a massive proportion, vying with Merthyr Tydfil as the highest [IB level] in the UK.”

The roots of Acumen stretch back to 2000, when the government announced “action teams for jobs” in 38 areas, including Easington, where Welch was appointed manager of the team. With a £1.5m budget, she had a simple brief from the then Employment Service. “Essentially, it was be flexible, be creative, be innovative in helping people find work,” she recalls. “You don’t get much better than that.”

Obstacles soon arose. “What became very apparent was that one of the biggest barriers to employment was skills – and I’m talking about real issues with basic skills,” she says. “I pulled a group of people together. What do we need to do? The basic conclusion was that the services were there, but people weren’t using them, so we needed to act. We started to build up an outreach programme, where we sent a lot of advisers into the community. People wouldn’t walk through the door of a centre, but if we went out they would talk to us.”

Revenue streams

Enthusiasm grew and other revenue streams were identified to bolster the outreach programme. While funding of £270,000 was on offer through the neighbourhood renewal programme, Welch, who was also managing three job centres, could find no way to channel the cash into her expanding programme – a problem that became more acute when further money surfaced from other sources. “It’s very difficult actually to take money into a public sector agency,” she recalls. “There’s just no mechanism to do so. We started saying, ‘Come on, we have to do something better than this.’ How can we create an umbrella body that will support social enterprise, but also give us a mechanism for managing funding?”

The upshot was a social enterprise organisation, formed in May 2003. “We called it Acumen because we wanted to put a bit of business acumen into the voluntary sector,” Welsh says. Still with the employment service, she became a non-executive director of Acumen, alongside a senior manager from the private sector and someone from the voluntary sector. “Essentially, it was a body that could deliver on publicly funded contracts of various sorts, as well as support the start-up of other enterprises with a social purpose in the area,” she explains. “I was basically running Acumen in my spare time. I ran it as a small business start-up. But at the end of the first year, we had delivered £400,000 worth of activity.”

Since then, growth has continued apace. Welch left the civil service in January 2005 to drive Acumen full-time – shortly after it received a £750,000, three-year grant from the Northern Rock Foundation, which helped the enterprise to take on more staff. It now operates in five other areas of the north-east, and has established an offshoot in Cumbria.

It all seems a far cry from her first job, running a garden centre at Chester-le-Street, County Durham, for 15 years with her father. “It was a heck of a learning curve, and in the peak year, 1989, we had a £1.8m turnover.”

When the centre was bought by a larger company in the early 90s, Welch moved into the world of job creation, working with the charity Community Industry, which delivered training for teenagers and older people. “I found myself working in an old shipyard on the banks of the Tyne, delivering vocational training for 500 people. It was derelict, and we used the buildings for training activities.”

Then she moved into the public sector as an adult training manager with the former County Durham Training and Enterprise Council. “I kind of got down this route of working very much with unemployed adults,” says Welch, as she recalls the limitations of life in a civil service culture driven by targets. But she gained a valuable insight into how social enterprises can add value to government programmes, and deliver contracts on behalf of the state.

Strong views

But with the work and pensions secretary, James Purnell, committed to outsourcing many of his department’s programmes – with some big US corporations in the frame to deliver back-to-work schemes – Welch has strong views about the commitment of large organisations to local communities. Acknowledging that some major players have “inputs into government”, she cautions against using large project-management companies: “I have said we could end up with a bunch of contractors whose only experience has been running car parks.”

Welch also has doubts about the use, and abuse, of the label “third sector”, arguing that some organisations have labelled themselves “ethical businesses” when their first duty is still to shareholders rather than communities. “This is a confused and crowded landscape,” she argues. “The danger is that the bigger the organisation, the further from the individual they are serving. I am not saying that some [big] organisations do not do it well, but we should be asking questions. You do not get long-term commitments to areas [from them]. It is only by working with the community that you can turn round the culture.”

Source: The Guardian