Traditionally, the term ‘social firm’ has applied to a trading enterprise that creates employment for people with disabilities. The term now has been widened to include “people disadvantaged in the labour market” — a definition that covers other disadvantaged groups such as ex-offenders, homeless people and those who have previously been involved in substance abuse.
The report finds that there are now 99 established social firms and a further 82 emerging social firms. The sector employs an estimated 2,600 people, including 1,798 people in full time posts, of which 857 are severely disabled people — an increase of 62 per cent since 2006.
Social firms have traditionally operated in a number of business sectors and the report highlights this is still largely the case, with seven business sectors accounting for 83 per cent of trading activities. These sectors are: catering, training, recycling, retail, gardening and horticulture, packaging/mail fulfillment and printing/print finishing.
In terms of income generation, the majority of social firms have an income of less than £250,000, though 11 have income of between £500,000–£5 million and one earns more than £5m.
One of the best known co-operative social firms is the Daily Bread Co-operative, which next month celebrates 30 years of trading from its Bedford Road shop in Northampton. The wholefoods co-operative has 11 members and a similar number of non-members working in the business.
Its success led to the formation of Daily Bread Cambridge in the early 1990s which currently has 16 paid members of staff and five volunteers.
Both businesses credit their “very loyal customers” and their Christian ethos with helping them to survive in the current economic climate — something which proved impossible for another social firm, Wholefood Planet, set up at the start of 2009 in Norwich.
That company was set up as a subsidiary of Social Firms UK and was licensed to use Daily Bread’s intellectual property, but trading difficulties led to its closure at the start of this year, after just 12 months.
One of the most successful, member-owned social firms is Oxford Wood Recycling which recycles and reuses used wood. Set up five years ago, the company’s mix of paid staff and volunteers operate a wood shop where reclaimed wood can be bought alongside a range of products including benches and compost bins. Based in Abingdon, the firm was recently named European Social Firm of the Year 2010.
Claire Ward, the company’s operations manager, is herself living proof of the worth of social firms. Having suffered from arthritis and been out of work for 12 years, Claire had started to regard herself as unemployable.
Her health problems ruled out office work and as other opportunities seemed scarce she decided to see what volunteering opportunities were available. Having e-mailed a number of different organisations, the only one to reply was Oxford Wood Recycling.
“It was great,” she says. “I felt useful again. I was part of an organisation that was environmentally sound and it was good for me to be doing physical work.”
After two years she started to earn £20 a week while retaining the benefits she was receiving and then she was persuaded that she could take on a full time role and took up the operations manager position.
Receiving the Social Firm of the Year award Chief Executive Richard Snow said: “We’re delighted to have won this award for our staff, who own and control the business. We are a small business that sees the value in giving opportunity to people who have been out of work for a long time, often through illness.
“The company benefits hugely from their skills and experience, the workers benefit from worthwhile employment in an exciting environmental business, and the taxpayer gets savings in benefits for unemployment, disability and incapacity.
“We may well have beaten off some very worthy competition by showing our sustainability in being totally independent of grant funding. If David Cameron wants some ideas for the ‘Big Society’, we’d be pleased to show him around our warehouse and sell him some rescued timber to build a shed or a raised bed!”
Whether Mr Cameron will accept the company’s offer remains to be seen, but it is clear that social firms have a role to play in the Conservative/Lib Dem coalition’s welfare reforms, particularly through its Work Choice programme to be introduced in October.
• Social Firms UK co-ordinates a visits programme for people interested in visiting, and learning from, social firms. To find out more see: visitsocialenterprise.co.uk.