Buy Social Initiative – Why Procurement Should Spend Billions with Social Enterprises

public procurement

Monday saw the launch of the "Buy Social" initiative. At a reception at 11 Downing Street, the Minister for Civil Society, Rob Wilson, and Peter Holbrook, the CEO of Social Enterprise UK, talked about the initiative which has set a target for a group of big firms to spent £1 billion with social enterprises by 2020. The firms leading the way are Wates, Interserve, RBS, Zurich, Johnson & Johnson, Santander and PWC.

Whilst it is undoubtedly a “good cause” it is one that raises all sorts of questions for procurement people. Perhaps most centrally, are we expected simply to be encouraging and give social enterprises a fair chance of winning our work, or are we supposed to be prepared to pay more for their products? I spoke to one executive from a social enterprise who said their products were a little more expensive but they are producing something that usually would be made in a low-cost country. Others said they expected to compete fairly and did not expect subsidies.

There are also questions around how a “social enterprise” is defined. Talking to a couple of the senior procurement people at the event, they raised that as one of the issues that faces them, even as a supporter of the scheme. And how much of this is really about supporting local businesses; that seems to us a somewhat different idea, but the two goals seemed to be conflated in some eyes based on some of our conversations.

So as usual, we take an analytical and questioning approach to anything of this nature. However, if one person in that room could convince the most cynical CPO to support these ideas, it was Kate Markey, the CEO of Blue Sky, a social enterprise that works with offenders on release from prison. The organisation employs people for six months generally, either directly or on contract to the firms that work with Blue Sky. They also provide support and mentoring and help with issues such as housing.

Her short speech was outstanding. It contained real data for a start, not just stories and aspirations. Having a job halves the chance of someone re-offending.  Since 2005, over 1,000 people have been employed by Blue Sky and their re-offending rate is 15% against the general rate of 60%. Re-offending cots the UK £13 Billion a year, £200K a person, so Blue Sky has saved the taxpayer £90 million (I make it).

Markey also showed a good understanding of business – the approach is very hard-headed, so “we don’t expect contract managers to make special allowances for our people,” she said. The only question is why has the organisation only worked with 1,000 people over 10 years? You feel it should be tens of thousands a year.

Anyway, we will come back to some of the interesting questions around this subject at a later date. Why should organisations support social enterprises – is it just a feel-good thing? Or is there a real shareholder value business case? Can procurement people take the lead on this or does it have to come from the Board? How do we choose the best social enterprises to support? We also hope to have a guest article shortly from one of the firms leading in this initiative, giving their procurement take on it all.

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First Voice

  1. Paul Wright:

    One issue with very good organisations like Blue Sky is whether they are scaleable. There can be a problem going from a small dedicated group of professionals dealing with a small group of offenders in close relationship. No reason for not trying, but the quality of both professional and offender may decline if we go from 100/year to say 5000/year. Personally I think it is worth trying even if has little impact on re-offending.

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