New report reveals significant social value benefits of trading with social enterprises

Research reveals money spent by Wates with social enterprises generates 77% more social value compared with commercial businesses

• Research reveals money spent by Wates with social enterprises generates 77% more social value compared with commercial businesses
• Social enterprises created an average of £331,304 social value per year through business activities compared to £187,607 in commercial businesses
• Majority of the social value created (£220,000) is from employing people who face barriers to employment, such as ex-offenders
• 85% of participating social enterprises led by ethnic minority groups
• 38% of participating social enterprises led by women

Independent research commissioned by the Wates Group, one of the largest privately-owned construction, development and property services companies in the UK, has revealed the social value generated from spending with social enterprises within its supply chain is 77% higher than that generated by working with commercial businesses – or for every £1 spent with a social enterprise, £1.77 of social value is generated.

This is one of several key findings in the report produced by NEF Consulting, and funded by Wates Giving, evaluating Wates’ working relationships with social enterprises. The research involved interviewing both social enterprises and commercial businesses within Wates’ supply chain, and revealed both the benefits to society of working with social enterprises, as well as highlighting the major differences in how social enterprises and commercial businesses generate value.

A key difference was to be found in employment practices, with social enterprises typically being more successful than commercial businesses at employing people who have previously found it difficult to find work, such as those with disabilities, ex-offenders and those not in education, employment or training. On average, the social value generated was calculated at around £220,000 as opposed to £90,000 in commercial businesses.

In contrast, social value generated by commercial companies is more likely to come through organisations paying the Living Wage, or through staff finding their work engaging and believing it presents the opportunity for career progression.

Social enterprises are at the forefront of improving social cohesion through workplace diversity.  In a recent survey of SMEs   90% were found to have no ethnic minorities in  leadership positions, and only 8% had one or more partner or director from a minority group. As 14% of Britain’s population is Black, Asian or Minority Ethnic , the social enterprise sector presents an opportunity to promote diversity.

This imbalance was reflected in the commercial businesses surveyed for the report, with only one having a director, partner or owner who was not White British or Irish. In contrast, 85% of the social enterprises surveyed employed ethnic minority groups in senior leadership positions.

Wates is committed to building stronger local economies and more sustainable communities. As part of that commitment we have been dedicated to working with social enterprises for five years and we are a founding partner of Social Enterprise UK’s ‘Buy Social Corporate Challenge’ which encourages business to procure using social enterprise.

“We always aim to work with at least one social enterprise on every project we manage, from major construction projects through to new home developments and the maintenance or repair of social housing.

 

“We commissioned this report so we could examine the impact of the work we have already done with social enterprises, and to discover what more we can do to ensure our activities in the sector are as efficient and as effective as possible.

 

“Last year we spent over £2million with social enterprises, and we are on track to have spent £20million with the sector by 2020. This report is an endorsement of our approach and confirms that by buying services through social enterprises we are creating significant social value for the communities we work in. The insights it brings will help us and other businesses, to improve relationships with social enterprises and maximise the mutual benefits.”

Rachel Woolliscroft, Sustainability Director, Wates Group

The report recommends how Wates and other companies can improve their relationships with social enterprises, allowing the sector to become more efficient and successful. These include private companies supporting social enterprises to map and improve their social impact and businesses having a stronger requirement for project managers to engage with social enterprises.

Notes:

1. Social enterprises are businesses which trade for profit, but reinvest these back into a social or environmental purpose.

2. Social value is the additional benefit to society of a particular activity. It looks beyond the price of a contract and at what benefit it will bring to a community.

3. A summary of the report by NEF Consulting: ‘Impact Evaluation of Wates’ Relationship with Social Enterprises’ is available at: www.wates.co.uk/latest-news/reports_and_research/

4. NEF Consulting is the consultancy arm of the New Economics Foundation. For more information: http://www.nefconsulting.com or contact mary-louise.nash@nefconsulting.com

5. This research was funded by Wates Giving. For more information about Wates Giving, visit: www.watesgiving.org