Social enterprise: action plan

Realising Market Opportunities

Over the last three years there has been considerable success in harnessing the purchasing power of the public sector and business community, to create new market opportunities for social enterprises. During this period, we have also seen more and more social enterprises move boldly into consumer markets. We will work with partners to accelerate these trends, enabling more consumers, public authorities and businesses to understand and purchase from social enterprises.

Summary Of Key Actions

During the next three years we will:

• Bring forward a programme to help improve collaborative commissioning and the role of social enterprise in the delivery of public services.
• Invest any potential returns from new and legacy funds into new financial products and services that will test innovations collaborative commissioning and the delivery of better public service outcomes.
• Review progress based on research and spread best practice in implementing the Sustainable Procurement Duty^[27] across Scotland's public sector buying community.
• Review our support for procurement and how we best support mechanisms that will enable social enterprises to prepare, bid, win and deliver public sector contracts.
• Take continued action to realise the potential of supported businesses to access public contracts, through the use of reserved contracts and other mechanisms.
• Support new initiatives that will raise awareness and help broker relationships between social enterprises and prospective corporate partners and purchasers.
• Test new ways of harnessing the purchasing power of local anchor institutions to create opportunities for local social enterprises and keep money circulating within communities.
• Based on consumer research we will look to raise awareness and realise the potential of social enterprises in consumer markets.

Collaborative Commissioning

Scotland has demonstrated considerable imagination in the way that public services are designed and commissioned. Previous Scottish Government support to test innovative commissioning models such as Public Social Partnerships has pointed to new ways of co-designing services and delivering better service outcomes.

We will continue to drive transformative change in commissioning practices and support public sector commissioners to use the flexibilities available to them. Building on current initiatives, we will encourage where possible localised commissioning that engages effectively with independent providers and promotes collaboration, innovation and trust.

To help achieve this we will explore ways to improve collaborative commissioning across Scotland's public sector. Any programme in this area should use public sector practitioners and managers to better understand the strategic commissioning cycle, understand best practice models for involving the third sector and social enterprises in service design and commissioning, and encourage ways to make the most of relationships with the sector.

Funding New Commissioning Models

To enable the next generation of public services to take form, Scotland requires a more diverse set of funding models than are currently available.

These new funding models are required if a wider range of social enterprises are to take on a meaningful role in delivering public services. Such models sit alongside, and on the spectrum between traditional debt finance and grants.

We will explore ways to invest in and support new financial products and services, as well as test innovative commissioning models, which will support the delivery of better public service outcomes.

Sustainable Procurement

The Procurement Reform (Scotland) Act ^[28]has put in place solid foundations for sustainable public sector procurement. With the introduction of the sustainable procurement duty and a focus on community wealth building, contracting authorities must now think about how our regulated procurements will improve Scotland's social, environmental and economic wellbeing, with a particular focus on reducing inequality. It also requires us to facilitate the involvement of SMEs, third sector bodies and supported businesses in our procurements which are designed in a way that encourages them to be involved. Public purchasers have the statutory guidance, tools, and accountability mechanisms needed to optimise the community benefits of procurement activity and ensure that small suppliers (including social enterprises) have adequate access to public contract opportunities and are treated fairly. Improving access to, and the number of, public sector awards to local businesses, including social enterprises, is a key tenet of Community Wealth Building.

In the next year, based on research evidence, we will review progress in implementing the sustainable procurement duty across Scotland's public sector and find ways to accelerate the adoption of innovation and best practice across public sector buyers.

Alongside this, in partnership with public sector partners and the social enterprise sector, we will review our strategic approach to procurement. This is with the aim of closing the gap between social enterprises and private sector SMEs in terms of the number of contracts that they are successfully winning within Scotland's public sector.

Supported Businesses

Scotland has a long history of supported business activity - social enterprises whose main aim is to integrate disabled or disadvantaged people socially and professionally. During the last three years we have made considerable progress in raising the visibility of supported businesses to public sector buyers, enabling the use of reserved contracts, and helping develop the commercial potential of supported businesses.

During the next three years we will work to take continued action to realise the potential of supported businesses to access public contracts. This will require action to make supported businesses more visible to buyers and action to ensure buyers have the confidence in, and see the benefits of, working with supported businesses. This includes promoting the use of Reserved Contracts and encouraging engagement between buyers and suppliers that qualify as a supported business.

Corporate Supply Chains

There is considerable potential to transform the way that big companies do business and impact society, including through their routine spending on social enterprise suppliers.

Over the last few years there have been a small but growing number of cases where big businesses have systematically introduced social enterprises into their supply chains. In part, these have been encouraged by the introduction of Scotland's sustainable procurement duty, including the use of Community Benefit Clauses and social enterprise sub-contracting requirements in public contracts.

There are an increasing number of big companies who are seeking to grow their social impact through buying social in their supply chains.

The Corporate Challenge has a stated aim of creating supply chain opportunities for social enterprises over the term of this Action Plan.

Corporate buyers will be encouraged to demonstrate they are buying from social enterprises; have fair, accessible and open procurement processes, be committed to measuring the impact of buying social and be encouraged to raise awareness of social enterprise across their business.

Our ambition is to steadily grow awareness and increase the level of new business secured by social enterprises through corporate contracts. Over the next three years we will work with agency and sector partners to encourage effective approaches to raising awareness of social enterprise within the business community, of brokering relationships between social enterprises and prospective corporate partners and purchasers, and to support ambitious, growth-oriented social enterprise suppliers to respond.

Supplying Local Services

Social enterprises are often strongly rooted in their communities, delivering a range of vital goods and services in their local neighbourhood, village or town. This has been seen across the country as local businesses and organisations have stepped up to provide help to their communities where it was most needed.

We recognise the potential of local public and private sector anchor institutions in these local economies as purchasers, asset owners and enablers of this community-based social enterprise activity. These purchasing institutions include universities, housing associations, and others.

Through Community Wealth Building pilots and our wider initiatives to strengthen cities, regions and town centres, we will explore how social enterprises can contribute to greater democratisation of the economy and inclusive economic growth. This will include working with social enterprises to develop their ambition and capacity, and also working with large local "anchor" institutions to identify ways that local social enterprises can bid for and win contracts, thereby keeping money circulating within communities.

Consumer Market Opportunities

The early evidence suggests that the Covid crisis has prompted a change in consumer behaviour, with a growing appetite to support locally produced and authentic products as well as a continuing support for brands with purpose. This has created a significant opportunity and growing number of social enterprises that are tapping into consumers' desires to live sustainably and buy ethically and local.

In the last three years the Scottish Government has supported a range of initiatives that have enabled social enterprises to build brand presence, bring forward new retail products, and to take their first steps in consumer markets.

Buy Social is an example of this, a growing international movement with its Scottish launch at the end of 2020 it looks to promote trading social enterprises and showcase their products, services and experiences through a directory of Scottish consumer-facing social enterprises. Encouraging consumers to choose a product that makes a difference.

We will support opportunities to raise consumer awareness of social enterprise, and to build capabilities required by social enterprises to enter consumer markets. This work will be guided by a fuller assessment of consumer attitudes and demand.