Social Enterprise UK’s analysis of data provided by Tussell on public sector contracts awarded to Community Interest Companies (CICs) has found that despite government’s commitment to opening up public sector contracts to a range of providers there has been little increase since 2016.

According to public contracts analysed by Tussell, in Q1 2018, 69 contracts were won by CICs. In Q1 2016, the figure was 65 – growth of just 6% in two years. Only 0.4% of all public procurement contracts are won by CICs and only 1% of all contracts deemed “suitable” for Voluntary, Community and Social Enterprise (VCSE) organisations are won by CICs. Overall, only 12% of all contracts deemed suitable for VCSEs are won by VCSE organisations.

Central Government is also lagging behind working with CICs, with only 10% of contracts won by CICs coming from Central Government. Local Government, by contrast, performs better. It is responsible for 60% of all the contracts won by CICs. It’s also worth noting that social enterprises win more contracts in the health and social care than in other sectors.

Although only 20% of social enterprises are registered CICs, according to Social Enterprise UK, this report highlights the lack of progress made in opening up public sector contracts to a wider pool of providers over recent years.

This research comes on the back of the Public Administration Committee’s investigation into Carillion which found that public service markets are dominated by a handful of big companies which are at risk of collapse. The government also had to admit last year that spending will Small and Medium Sized Businesses (SMEs) fell from 27% 2014-15 to 24% in 2015-16.

In future this inaugural piece of research in the collaboration between Social Enterprise UK and Tussell will be updated every quarter. The Tussell-Social Enterprise UK Index is to promote a fact-based understanding of the role CICs in the public sector supply chain to measure ongoing progress in the government’s social value agenda.

Commenting on these findings, Charlie Wigglesworth, Deputy Chief Executive, Social Enterprise UK said:

“This research shows that the government is failing to open up public procurement to a wider pool of providers. This means that they are losing out on the benefits of working with social enterprises, which reinvest their profits back into the communities they serve leading to better outcomes.”

“We must learn the lesson of Carillion which is that public procurement is not sufficiently diversified.  Social enterprises are proven to deliver at a local and national level, but government is not doing enough to build partnerships with them. The Cabinet Office needs to go back to the drawing board and work with social enterprises to change this picture before we see another Carillion-style failure.”

NOTES

  • Download the research here
  • Social Enterprise UK is the largest network of certified social enterprises in the UK and the leading global authority on social enterprises. Together with our members we are the voice for the sector. We raise awareness through our advocacy and campaigns and build the evidence base for social enterprises through our research. We have led public policy for 15 years, helping pass the Social Value Act, and are a strategic partner to government. We exist to increase the profile of the sector and build the markets for our members - working with some of the UK’s biggest companies to support them to bring social enterprises into their supply chains. Our members reflect the diversity of the sector ranging from local grass-roots organisations to multi-million-pound businesses. We see social enterprise as the future of business.
  • Tussell is Tussell is a data provider with a mission to unlock the value of public procurement. It aggregates disparate sources of open data on public contracts into a single searchable database, empowering suppliers of all sizes with the business intelligence they need to make more impactful bids. Leading media publications also rely on Tussell’s insight into government outsourcing, generating more than 120 citations so far in 2018. For more information, please contact Joel Pearce, Head of PR & Partnerships, on[email protected].
  • Social enterprises are business which trade for a social purpose that reinvest or donate over half their profits to further this social or environmental mission. They are an increasingly important part of the UK economy contributing £24 billion and employing nearly a million Estimates are there are between 70,000 and 80,000 in the UK. Research carried out by Social Enterprise UK, the membership body for the sector, shows they are outperforming traditional businesses when it comes to start-up rates, turnover growth and innovation. They are also ahead of the pack when it comes to workforce diversity and pay. For more information and statistics see Social Enterprise UK’s State of Social Enterprise Report – The Future of Business - https://www.socialenterprise.org.uk/the-future-of-business-state-of-social-enterprise-survey-2017

Please contact Andrew O’Brien, Director of External Affairs, for more information (Andrew.o’[email protected] or 07889129