 Rhaid fawr yn cyflawn. Welcome to the 20th meeting in 2014 of the Economy, Energy and Tourism Committee. Can I welcome members and our guests this morning? I remind everyone to turn off or turn to silence on mobile phones and other electrical devices so that they do not interfere with the sound system. I think that we have no apologies this morning, so we have a full house from members ond yn gweithio i gyd yn gwybod, aeth yn i gyd yn gyntafol. Iphone 1, yn y dyfodol, wedi cael ei chyfnodd iawn, yn cyffin i'r prifnodd iawn sy'n cyffinodd iawn? Iphone 2, yn cyffinodd iawn, yn cyfnodd iawn, yn cyfnodd iawn, yn cyfnodd iawn, yn cyfnodd iawn, yn cyfnodd iawn. ond y cyntaf ymlaen i ymgyrch gyda'r agenda yn ymwneud y ffordd o'r cyfrifau a'r oedd yn gyd yn y prifyddiogau. I'm great, thank you very much. Item 3, ysgolwch eich gweithredu, yn y ffawr nifer o'r cyfrifau o'r cyfrifau, i fynd wedi cymdeithasol a'r ffordd o mynd i'r cyfrifau i'r cyfrifau o'r cyfrifau i'r cyfrifau. Felly, dyna dweud hynny yn ôl i fynd fod yn myd i gyll toutiau firmaeth a dyna gynnwys tyd, ei wneud yn ei hynny, ond ond ond rwy o'n gweithio. Mae cyfan yn oed yn ddifiddel iawn o adeiladau gan ein syniad. Felly, o hoffi i'w ddweud o gyd, I might be useful if we went around the table and introduced ourselves and said who we are and who we are here representing. I just start and I will pass on to Dennis. I will go round the table this way. I'm a Murdo Fraser, I'm a member of the Scottish Parliament for Mid Scotland and Fife, and I am the convener of the committee and in the chair for today's session. I'll hand over to Dennis Sheehan. Good morning, I'm Dennis Robertson, I'm the MSP for Aberdeenshire West, and I'm the deputy convener of this committee. Hello, I'm Andrew Nick Sieman, I'm the Assistant Chief Executive of the Kalman Trust. We operate a range of social enterprises in Highlands as a vehicle for delivering employment and training to young people. Mike McKenzie, I represent the Highlands and Islands region. I'm Brian Weaver, I'm the Chief Executive of Hices, which delivered business support to social enterprises in the Highlands and Islands. I'm Jim Brodie, I'm one of the MSPs for the South of Scotland region, and I have the privilege of being the convener of the cross-party group on social enterprises. My name is Duncan Oceler, I'm a partner with McRoberts Law Firm. I'm here as chair of Social Enterprise Scotland, which is a member-led organisation promoting an interest in understanding and development of social enterprise. I'm Margaret McGregor, MSP for West region. I'm Ewan Fraser, I'm the Chief Executive of the Drian Canmore Group, who are an affordable housing group based in Edinburgh, but working across the Edinburgh Northlands. I'm Richard Baker, and I'm an MSP for the North East Scotland. I'm Matt Halster-Davies, the Chief Executive of Social Investments Scotland, and we make loans on other repairable investments to charities and social enterprises across Scotland. I'm Joanne McAlpine, MSP for the South of Scotland. I'm Fiona Pearson, the co-ordinator of the Wesleyan Social Enterprise Network. We're one of the newer networks. Marco Biagae, MSP for Edinburgh Central. I'm Calan McGregor, Chief Executive of Firstport. We support new start social enterprises across Scotland. We provide them with business support, start-up funds and practical help. Alison Johnston, MSP for Lodian. My name is Neil McLean, I'm the Chief Executive of the Social Enterprise Academy. We run accredited learning for social enterprises and social entrepreneurs across Scotland. Okay, thank you. I'm also joined by Diane Duggy, who are from our department team. Good. Thank you all for introducing yourselves. I think the way I would like to run this is really around three broad topics. I'm going to get a discussion around three. The first topic would be on what is a social enterprise, do we understand what that is, do we understand what the scope of social enterprises are in Scotland? The first topic is about definitions and the scale of the sector. The second topic that I'd like to introduce is what is the value of a social enterprise, what are the benefits to society of a social enterprise, what are the advantages, what are the social and economic opportunities that arise. The third topic, which I suspect might be the meatiest of the three, is what are we currently doing to support Scottish enterprises and what more should we be doing in terms of Scottish Government policy and other agencies, and we can touch on things like funding, public procurement and business support and so on. The way I'd like to run this is, obviously we need to cheer up, so if you want to contribute, just catch my eye and I'll bring you in, and the MSPs here feel free to chip in, ask questions, make contributions, but we really want to hear from the witnesses. So if we can maybe start off on the first topic, which is what is a social enterprise, maybe I could start dunking with you, given your role. Can you tell us what you think a social enterprise is? Yes. A social enterprise is a business that trades like another business, but has a purpose, which is a social one, more than simply the making of that money. If you are a charity, you have a beneficial charitable aim. If you're a community interest company, you'll have a community interest more fundamentally than that. The question is, if a surplus is generated by the social enterprise, by the business, where does that profit go? So the generation of profit, but along the way, when you engage in activities that you do to achieve that surplus, that income and that enterprise, what impacts are achieved along the way, such as in relation to employment, employability, environmental and other gains? So if I could answer a different way, there is no standard definition that is an absolute unchanging, unfixed one because of the nature of human endeavour. Yes. The point that I'm going to follow up and ask you is, to what extent is the definition very helpfully outlined, agreed by everybody, or are there different interpretations? It's a fluid and on-going discussion. I mean, I think others should comment on that as well, but I think that I'm a lawyer, and therefore a definition is a good thing, but I also know that definitions are something that you don't always agree on. It's important to be discussing it so you get to the essence of purpose, and it's business with purpose is another way to look at it. Emre, you also want to chip in on this point, the question of definitions. Yes, please. One thing that frustrates Wesleyan social enterprise network members is the term not for profit, because a social enterprise is not for profit. It's what you do with your profit that's important. I think it's interesting to note that in Scotland our definitions of social enterprise are perhaps more rigid, particularly when compared to the rest of the United Kingdom, but also when contrasted to the rest of Europe and also to organisations in the States, where there might be a more liberal interpretation of where the profits from a social enterprise can go, as long as it was making a social purpose, whereas in Scotland in particular we are quite keen on the idea of having things locked in in terms of where that profit can be distributed. So there is a difference between Scotland and other countries. But when you say there's a difference between Scotland and other countries, who in Scotland is enforcing that definition? I think that the social enterprise movement to a certain extent polices the definition, but I think that as the movement grows in prominence and understanding, then that will be open to more challenge and discussion from other organisations and other people. I would like to add to that that I think we've had years to actually define social enterprise properly and it hasn't happened, I don't think. I'm not a lawyer, I used to be a biochemist and we liked hard definitions. My fear now is that the UK Government has just decided that tax relief will be given by individuals to invest in social enterprises and that says to me that the people who are going to make a definition of social enterprise will be HMRC, because the tax authorities will decide what is a social enterprise and what's not. And we've kind of missed a trick there, so I would really like us to sit down and have a very specific definition of social enterprise. I think that it's worth mentioning that one of the membership organisations in Scotland has a code of practice, and that's, I think, fair to say, is generally widely accepted amongst social enterprises in Scotland and probably is what most of his work to in terms of getting closer to an accepted definition, but I think that Brian makes a fair point about who me ends up giving us a tighter definition. Ewan. I think coming from a housing association point of view, we have rules that are to register friendly societies and the inner rules and charitable rules that we have. We are in business or in business to the benefit of the community, and it's just really the community benefit and I will go back to the kind of profit for a purpose. Every business has to make a surplus of some sort, but it's what you do and it's a profit for a purpose, it's really the key thing for housing associations. So we have to really deliver a service, we've got to deliver a service in the community, but to give the affordable housing service, the affordability bit is really important, that you've got to retain the affordability, so to do that, you must use your money wisely and then create the benefit for the community. I think that this house association has been around a long time, but it's only recently they've been recognised themselves as social enterprises using that kind of enterprising nature really to give that benefit back to the community. Mark, where were you trying to come in? To come back to one of the points that had been made about the definitions being broader elsewhere, Alasdair, where else would those returns go and where did they go in those other areas that you were referring to, I'd be keen to have it explained about Mark. So in the main, a proportion of those profits may be distributed to either the owners or the shareholders in that particular social enterprise, so in for example Germany, the context of who is a social entrepreneur, maybe somebody who wants to set up in business to have a social purpose and still creates that social purpose, but may extract wealth from that enterprise personally, which is what we wouldn't necessarily see in Scotland. Now I'm not for a minute saying that I believe that is right in every case, but I think it's worth being aware that there are a range of definitions in Scotland, but also a range of definitions probably in a worldwide context. Okay, I think that Neil, you were next. Adding more confusion, many social enterprises also have charitable status, so you have that kind of confusion as well, so the extracting profit is in a particular model with a community interest company. Charities obviously have to be governed by those rules as well, so to my view, in the broader third sector, there are charities who are social enterprises that don't use the term, and there are organisations who are social enterprises who use the term and probably are not operating as social enterprises, but are jumping on that bandwagon, so it's a confused scene generally. For me it's that code of practice that Karen referred to, which we're subscribing to, but also that sense of an exchange of value taking place, so there's a business context, exchange of value taking place, and the profit's being broadly retained for the purpose of the organisation. Mike, what's coming? This is obviously an interesting discussion, but I think it would be more interesting or certainly I would be interested to hear, and I think that Brian may be touched on this, is that does it matter that we don't have a precise, all embracing, universally accepted definition, or Brian may have been hinting at it, does this give rise to problems? Certain things occur to me that I'm aware of some social enterprises, for instance, who are undertaking projects that they're raising finance for it through a crime funding mechanism whereby they distribute profits to those that buy shares in the project, and given HMRC, given Oscar's role and so on, is this lack of a definition and understanding likely to cause problems, or is it already causing problems? I'd be really keen to hear about that. Brian, to your point, if we are talking about a specific tax benefit, then clearly there will need to be an agreed definition, won't there? Even if you look at that piece of research that was done just recently for the big lottery, they actually say in that, I think that they inquired about 3,500 organisations, they got 192 responses from them, and yet when you read three or four pages further on, of those 192, 42 per cent of the respondents didn't actually fulfil the definition of being a social enterprise themselves. Now, if we are getting organisations responding who don't know or don't think that they're social enterprises themselves, if they're confused, God help everybody else. We've seen probably 500 social enterprises, small ones throughout the Highlands and Islands over the last six years, and we're always trying to work out, would you actually be a social enterprise or are you just a straightforward charity? Do you trade or do you trade sufficiently that actually you should just be a charity and just leave it at that? We put all sorts of demands on people simply because we've brought in the whole concept of social enterprise, and if we defined it and said, actually, if you're a social enterprise, you're going to be aspiring to something, you're going to be aspiring to a big business, therefore, why aren't you VAT registered? Nobody's ever suggested that, but I think that that registration would really focus the minds. You don't need to be a big organisation to be about registered, but you need to be concentrated. Those are the kind of things that I think about, keep me awake at night. I think there's another point, which is that there's almost two different types of social enterprise, and I think that some of it covers charitable status, but it's whether your social mission is part of your activity or is it that your activity generates a surplus, which is then used for the social mission or a combination of both, and I think that adds another layer of confusion as well. I think Richard, can I make a point? He's thoughtful on what Brian Weaver was saying. I mean, you mentioned the fact that some organisations, which may be social enterprises, aren't defining themselves as such, wondered also to what extent there's a factor with more and more local services being contracted out of organisations doing that work, and that it might well be a care service, but they're actually in it for profit rather than for investing that any profits are making in social causes or in the enterprise they're carrying out, and to what extent is there for a number of organisations who are actively looking to push the boundaries themselves to try and define themselves as a social enterprise when that actually is not what they're doing, and of course there may soon be a tax incentive to do that as well, so it seems to me it's quite a challenging picture at the moment. Yes, thank you, and good morning everyone. As a spect, I have a view on what the answer to this question is, but it'd be interesting to hear the views round the table, as we've heard about what may or may not be a social enterprise, who qualifies a social enterprise as being a social enterprise in your opinion? Social Enterprise Scotland has members who are social enterprises, and when someone applies to be a member we would assess whether or not they are social enterprises, which is easier to do in the context of a registered charity because their purpose is obviously aligned with the social mission, and in cases where it's unclear as to their purpose, we would not be comfortable qualifying them as a social enterprise. That is a qualification for the purpose of membership of our organisation, it has no other significance in its end. That's good, but asking the other organisations, are the standards all the same in terms of the interpretations or definitions, all the same as to you are a social enterprise because you fulfil the set of criteria? This is something that frustrates Wes Lothian and our members greatly, that if I had a pound for every hour I've spent trying to define social enterprise instead of actually getting on with my work, I would be making a profit myself. However, I think that Wes Lothian, we are a fairly new network and we've got a lot of traditional voluntary sector charities who are trying to become more enterprising, but that does not mean to say that there will be a social enterprise business. I think it's a really interesting time for social enterprise development. We seem to have a cultural change happening where we have businesses that are set up with the purpose of making surplus profit with which to do good things and to support social good on the way along. Then we have the traditional voluntary sector charities whose grant funding is being squeezed to the point where they are now looking inward and saying, can we actually sell what we do? You can only make a business out of something that people want to buy. A befriending charity is never going to make a profit because nobody wants, nobody can pay for it. The people who buy the end product don't have the money. There's definitely two sides to that development. It's quite an interesting one. I used to manage a social enterprise in Wes Lothian that was set up as a cleaning business. It's very successful. It denates its surplus profits back to a housing association that's a subsidiary of a housing association. It runs as a business with its own management committee. It is VAT registered and it has to pay corporation tax occasionally if they don't pay everything back to the charity. They've given away £28,000 over the last five years to support the local community, but they're a business first. They employ people in an area multiple deprivation. They recycle 75% of all the waste that they handle, so there's an environmental impact, and then they support organisations with the profit, surplus profit, but that's fairly straightforward. If you've got a charity and we have another one in Wes Lothian that's a good example called Homemade and their Furniture Recycling Charity, they used to give furniture free of charge to people who were coming out of homelessness. They now have to sell their furniture in a shop at prices that are above what homes people can afford in order to generate profit to try and supply some free stuff, so they're struggling badly with that shift. Definitions, I think it is useful, we use the same score, a voluntary code, and we would always look at is there an asset lock? For us that's the thing. What happens to the profits? Is it locked? Are the assets of the company locked so that if that company winds up, what happens to all the assets? It's as good as we've got at the moment, but I really wish we had a clear definition and we could stop talking about it and just do it. Okay, well I sense that we're getting towards the end of this particular point, but a few others want to come in. Dennis was there. I think that to some extent, if we have Social Enterprise Scotland saying that they've got a criteria in terms of membership, is it not then logical to say that if there is a criteria to set out what is a Social Enterprise in terms of membership, then they take that criteria and define the definition from that criteria. Is that just too simple? Okay, perhaps talking. Right. It is a genuine social enterprise. But you have a criteria that you set. You mark it against a criteria, do you know, in terms of membership? We're simply a private organisation member led and we've over time developed a criteria which are core. Purpose and where the profits go, and indeed also the asset lock specifically looking at a charity or a kick, that is therefore a clear and relatively straightforward test to meet. The issue with which it's like the most simple is that there are other ways in which an organisation could set itself up legally in order to achieve social mission. And as time evolves, I would wish that there's a greater development and enhancement of the sector. Not that we stick things as at today's date and not evolve. Alice has mentioned developments overseas that there's a fundamental need for great impact to be delivered. Anything that tends to restrict that, impair that, I would urge you to think about. By impact, I mean social investment because the UK has introduced a social investment tax relief. Is that a social enterprise tax relief? Is it a social investment tax relief? That's an important distinction. I think it's because HMRC recognised that a definition of social enterprise per se is not as helpful as a definition of investment if it's about tax, it's about money and finance and relief in relation to that financial component of the business. But I'd also say that it is not simply a matter of economic and financial activity. These businesses have a social purpose. That is their essence in some way or other. Okay. You and your colleague. I did. I think that the pure social enterprise in a box is so firmly defined. It might curb entrepreneurship. I mean, it might stop things happening. I think diversity is a strength. I think there has to be a broad guideline on what social enterprise should be and this is about something like profit for a purpose. I mean, it really has to go on a social means. But to have it so finely defined, you're going to be curb opportunity. We are a social enterprise in the sense that we've got two companies. One's a charity, one's trading. One trades to support the charity. We don't want to be living off grant funding all the time. Public money is going away very quickly. It's very difficult to get it. But we've still got tenants. We've got huge needs. We've got people in communities with huge needs. So how do we support that? How can we have businesses around that company that are going to give a benefit to communities and business? The profit from the business then gets chung back into supporting people in a whole range of different ways about supporting homelessness, as Fiona has already been saying. I think that diversity should be seen as a strength and let's not put social enterprise into a box, which is so firmly defined that it just curbs opportunity. So you don't want a definition? I want a broad definition, but not too tight. I think that historically the debate between what's a social enterprise and what isn't in relation to the third sector has been done to death and is largely agreed. The bit that's still to be agreed and I think is really interesting is what's going to happen between the social enterprise and the private sector, which isn't existing in a vacuum and will respond as Duncan is saying. That idea of social investment, where the social change comes from, becomes much more interesting rather than the definition of the organisational structure that happens in the middle. I would agree with you in terms of keeping a broad definition as possible so that we're not boxing ourselves into a corner. I'm just wondering what the links are. I'll probably direct this to Duncan in the first instance, the links between traditional business models and social enterprise business models. I mean, these days lots of multinationals are falling over themselves to prove and emphasise their corporate social responsibility. Have you ever had anyone come to you that, you know, I suppose, I don't want to name any particular companies here, but there are companies out on the high street who are determined that they're playing a really important role in their communities. Do you ever have anybody, you know, coming to you saying, actually, we'd like to get more involved and are you learning from one another? Could that be useful? We have a category of associate members, which are entities that don't meet all of the test of being a social enterprise, but are nevertheless interested in social enterprise and working with and collaborating with social enterprises. I would also distinguish a private business, which has got a corporate social responsibility element from a social enterprise. It's a fundamental difference between a business that trades to make money privately and the owners take that money as profit, and they may use CSR in order to further that profit-making endeavour and a social enterprise, which actually has its purpose, that social aim. There's a lot to talk about investment and where that's going. I think there is a risk that, by focusing too much on definitions, we run the risk of forgetting the fact that we're all about creating social impact in whatever sense that may be. It is a real sign of strength that the social enterprise community is now attracting the attention of business and investment and the wider economy, because it's being seen as something that is attractive and sustainable and viable. That means that the private sector is interested and there are new streams of social investment opening up that are interested, and there is a risk that you may miss out on the opportunities that that investment may bring by too tightly defining the types of activities that that can be invested in to the detriment of the people of Scotland, in some senses, which may, in fact, be benefited by a slight opening up of interpretation of what can and can't be a social enterprise. I think it's good that we're starting to have that discussion, but I don't think we should compromise ourselves just for the sense of following the money that's out there. I think, I mean, also that needs to kind of take us on to the second part of the discussion, because I think we've more or less exhausted the definition point, and I think we might bring in a second, but I think we've come to the view that we're not going to agree this morning on the definition and there are different views. Mike, you're desperate to make a point on definitions? Yeah, I mean, I just wanted to say that in my experience, having dealt with a number of constituent problems, I think it really is quite important that we get, perhaps not a single definition, but a set of working legal guidelines to give people some comfort and certainty. We always get called in as MSPs when there are problems, and perhaps we see, you know, our views may be a bit jaundiced by that, but the lack of a definition is clearly understood in what are often very complex areas I think can cause great harm and great difficulty, representing a primarily rural area. I think in rural areas sometimes these problems come to the floor more often than they do in urban and city areas, but you know, just to give you a brief example, the Viking wind farm on Shetland, a collaboration between the community or a community interest company, if you like, or, you know, something that would be broadly defined as a social enterprise and SSE, whose board members comprise a number of local councillors, and the amount of difficulty that, you know, the kind of loosely defined good purpose is caused for individuals and in legal terms and so on is just staggering. And as we get further into this territory with more social enterprises, hybrids, you know, I can foresee even more problems. One of the big recurring themes is HMRC and VAR people struggling themselves to keep up with this territory, and all kinds of judgments being made that appear to be in some instances fairly perverse. And individuals who largely as volunteers getting involved in social enterprises wishing to do good for their communities, ending up saying, I don't want to have anything to do with this stuff, you know, I've been threatened with prosecution, fines, convictions, all kinds of stuff, it's too complex, nobody seems to be able to give me clear guidance or, you know, and, you know, so I see it as a territory that's fraught with difficulty and the purpose of getting a good working definition or set of definitions is to give guidance to all, all who interact with social enterprises from your local VAT inspector to the, you know, the local volunteer that wants to do some good for their community. Okay, well look, I think if we can, if we move on to the kind of the second part of the discussion, which was really about the value of social enterprises, what, what are the benefits from having a vibrant social enterprise sector? I'm simply looking at a situation Richard was kind of touching on earlier where we're seeing perhaps more traditional public services being, being delivered through a social enterprise model than perhaps was previously the case, what are the, what are the advantages, what are the potential pitfalls around that? Somebody have a, a view on that, that issue? Putting traditional public services out, social enterprises can be very well placed, especially if they work in partnership. It's very rare, certainly in a small area like Westlothian, that any of our social enterprises could get the whole pie, but working together they could all have a piece. The issue that we have, and this is another discussion that we've been, seem to have been talking about for years, is community value and, and how you value that in the procurement system. Westlothian council are fairly forward thinking and they have now gone through every contract they've got to see if they can put a community benefit clause in, or a social benefit clause. Unfortunately it is not weighted in the decision making process, so they're, they're actually still, we're working on that to say that for a bit, if you're going to, if you're going to say that social outcomes have a value, you need to have a mechanism for valuing it, and that is another box of frogs, great one to say. In Westlothian, we've, we've whistling council with the help and money from the Scottish Government are actually doing a research project with Strathclyde Universities to see if there can be one tool that can be used across community assets that transfer procurement and measuring social outcomes and funding. We have to have a value to that. Richard. Certainly it is clear from other countries on the parts of the UK that you can give a higher weight thing than Lothan in the case, currently given to community benefit clauses for example, but hasn't some of these issues been addressed through the procurement bill act now, Fiona, or is that some of that work still to be done? It's ongoing. It's sort of been kick-started all by the procurement reforms. I think it's only a good thing, but we have to get it right. We can't spend another five years messing about with, are we going to use social return on investment, are we going to use social auditing? It might well be that each authority will come to its own mechanism, but we're saying don't make this too complicated because it just, there's an awful lot of the smaller social enterprises, just look at it and say, that's just beyond our resources to do an SROI calculation. Actually did one and it was horrible and somebody else did it and came up with a different figure, so we could actually make it save what we wanted. So I think that that's a useful kick-start there and we're on the right lines and certainly it can be fairly frustrating to do research and do the background work, but we think it's really important in West Lothian when the council's going forward, putting the clauses in, is to get one mechanism that can be used across the disciplines. It might well be that that wouldn't work for other authorities, but it seems to be the way we're going in West Lothian. Just a little bit of the fact that the Procurement Act and perhaps you'll get some comment in terms of local authorities' views of social enterprise and how they engage. I mean I'm planning to get social enterprise set up in-ear with Rick Shaw's with youngsters going around on these encouraging people not to drop a litter. Now how do you measure that other than you know the place looks better etc. I'm not persuaded that the local authority necessarily will jump up and down something great. So it would be interesting to see the opportunities for the outsourcing in areas that will see a social benefit as to whether or not local authorities will embrace the knowledge that they will provide the core elements that they're there to provide and be prepared outsource particularly to social enterprises you know exclusively, but those things like whatever what have you that clearly demonstrate a social value and a social benefit. Do we have a sense of the total value of social enterprise to the Scottish economy? Has they done that calculation? I'm not speaking on behalf of the enterprises but I would have thought that because so much of it is a social impact it would be almost impossible to quantify. Is that a fair analysis? I mean I have seen economists try to analyse the value of clean water and streams and so on. There's nothing beyond economists attempts to quantify but it would strike me that that would be something that would be difficult and therefore actually be a challenge for the sector in justifying its value. We evaluated our services over the last five years and I'm talking about young fledgling businesses given that we work with individuals from a standing start and we found that the social enterprises that were up and running had stayed up and running and had begun say for just under three years. On average they were creating 2.4 local jobs in the area and about 140 people were benefiting on average from each enterprise so we were trying to find some harder statistics I think you know you're right in terms of you know from our point of view because we're not necessarily delivering the social impact it's quite hard for us to go out and measure that but I think it's important to realise that not all social enterprises are set up to deliver public services a lot of them are set up in the trade like ordinary businesses they deal direct with the consumer and if I may just tell you about a particular initiative that Firstport's been running in Glasgow which is part of the Commonwealth Games legacy and we started a project called beyond the finish line and we set ourselves a target of working with 10 young social entrepreneurs at a very very early stage and gave them the deadline of the games to get up and running we ended up working with 15 of them because the quality and the variety of ideas were so good and I'm pleased to say that by the time the games kicked off that about 10 of those actually were trading but at a local level what we're finding you know in terms of these young businesses and a lot of them were from the creative industries so it was craft-based products it was environmental upcycling businesses the biggest issue that they now face is finding the right kind of affordable short-term lease and at a local level there's a real issue around landlords and how they're approaching you know that issue and that won't just be for social enterprises I think that's for small businesses you know across the board and I think a really positive outcome you know of this work not just in Glasgow but across Scotland would be for local landlords whether it be the local authority and the properties they own or some of the absent landlords to start really looking at that issue because we'll all benefit from it because what we were demonstrating was that social enterprise for example can tackle that problem of empty shops vacant spaces in the high street nobody wants to be walking down and seeing this but retail is not the only answer and you know it's not providing us with the whole solution and a social enterprise can go in and it can deliver a completely different experience because our high streets are about you know a place to learn a place to be creative you know a place to meet a place to be active it's all of these things and I think that's where the you know going back to the original question about the value that social enterprise can play and that regeneration agenda is not just about economic regeneration you know it can help really make an impact on that but only if we all work together and that has to be the local authorities along with social enterprises. In terms of scale the published numbers suggest that the size of the social economy in its broader sense is about three and a half percent of the Scottish GDP and about four percent of employees in Scotland are employed in some form of first sector organisation. The Eco study that was done by the big lottery suggested the majority of that was in a social enterprise category but again you're back to definitions that's the kind of scale of it. I think just to pick up on what Karen was saying we need to be clever about what it is that we try to measure um I mean if I can touch on my organisation purely in terms of numbers we support about 400 young people a year train about 150 and employ 40 but actually the reason that we do business is because we believe that the trading is better not necessarily to increase the numbers. We think that you can train more people with employability skills if you are training in a real business and therefore they become better employees when they move on so our interest would be in measuring that the sustainability of the outcome rather than particularly the numbers of young people involved or the income generated but all three are important. The social enterprise actually provides then opportunities for individuals or groups of individuals that maybe aren't getting into the employment market through the sort of normal standard means of you know getting out there and just finding a job you think in terms of the training opportunities for certain individuals that may be finding it hard to get into the employment market is that the social benefit of some of the social enterprises? That's that's the the essence of the organisation that I'm involved in yes so we can we can employ people who are when they join us not employable because they have potentially other challenges going on in their lives so young people who may be late to work every day we can put support to work with them because it may actually be that they're carrying out an inappropriate caring role at home so we can work with them to solve that problem while offering them training and employment and not many employers I think would be able to to take that amount of time. I think you and you and your in your submission so looked at this as being opportunities rather than barriers is that right? One of the kind of initiatives we have is we have a homeless hostel in Leith and people are coming to the hostel you know because they're homeless because they've got a whole range of different issues or different problems so what we're trying to do is to try and break that cycle of homelessness and the way to do that is to give them a house and get them a job but the people who are coming to our cells are probably unemployable so what we've been looking at is assessing them for a matter of eight to twelve weeks and then we put them into a class a training flat and we teach them social skills budgeting skills computer skills how you try to see v anything to really get them into employment and make them employable and then we move them from a training flat into a permanent tenancy and that's again creating opportunities for people who have really got personal issues and the people who have gone through that system over the last two or three years have had a hundred per cent success rate in people sustaining their tenancy for more than a year it's very good and a lot of them are now going to college they can they can go into employment they can they can hold down a job so you can hold down a job because they can sustain their tenancy so i think you've got to look at opportunities and we've been looking at other opportunities and how do you how do you build confidence and there's just the simple things like Street Soccer Scotland who is a kind of a social enterprise and we work with them and we've got a kind of initiative called football works so they play football and then we give them a bit of training so they have to part of the deal is after they've had their get a football they must have our session the classroom we'll give them a bit of skills on on on we've been becoming a bit more computer literate how do you at tv what kind of some of the skills are and it's linking simple things like that it creates opportunity and that is getting people back into employment it's helping the economy but how do you measure that success is in in a number site and that's really quite difficult um right your question is about the value of social enterprises and the the topics we've heard there just now have been about homelessness and care and employability which are all the big ones that we see all the time when you go into a highland village you might have a generation where you don't actually have one of those problems but you have other things that are that your economy is so small that no national organisation is going to come into so all over the highlands we get small social enterprises that will do everything from running the ferry in Glen Elg to hundreds of them running their village halls to other ones who will start um organisations which are about bringing new crafts back into or or retaining old crafts um and so we have this really really wide range of delivery of a social value which would never be delivered commercially because there's not enough money in it for commercial organisations to be interested in it so so social enterprise is much wider than and sometimes just now i'm hearing it becoming you know more centralised and here is the things that this that social enterprise can do for government of our or for delivering um you know a government policies and so on but the reality is it's about the people it's about the people that live in communities and the things that those folk want there's some brilliant art centres um there's some you know wonderful organisations all over transport all over the highlands um if it wasn't for local communities running their transport associations it just wouldn't have any so those are the i'd like you to keep that in mind you know when you're outside of Edinburgh that there are loads of social enterprises out there and they're not just doing the things that hit the headlines all the time those groups appear where there isn't a critical mass for a commercial delivery so how do they make their money i mean how do they bridge that that unbiability and that's a really fascinating one because what tends to and what has happened over the last 10 years is that contracts have got bigger and bigger and bigger and that's a real problem if you're a small social enterprise and it can be doing anything it can be you know a social enterprise who's you know a village hall who has somebody there um being the janitor of the village hall and if that village hall could also cut the grass locally they could get enough money from cutting the grass to to help running the village hall and yet the grass cutting contract is likely to be a million pounds and picked up by a multinational because it's a whole national contract you know if local authorities where you mentioned community benefit clauses community benefit clauses enable local authorities to see oh there's a good organisation to give this contract to but a small contract makes it even easier we high says has a turnover of 225,000 pounds a year we can't go for a three million pound contract we need small ones if we had 30,000 pound contracts we could go for them all the time and that's how i'd ask you to do thank you but i mean by that's a very interesting point and and it kind of needs neatly leads on to the kind of the third probably the most important topic i want to discuss which is you know in terms of you know public policy what is the support currently available for social enterprises in terms of government local authorities agencies and what more needs to be done and you know we've already touched on one thing about in relation to procurement where parliament passed a procurement bill just a few months ago which is provisions in it for community benefit clauses which obviously the step in the right direction might not go far enough but i'm interested to hear you know what is the experience of public support of social enterprises in terms of the framework in terms of funding access to funding always issues of all more needs to be done i think it is a fair assessment to say that compared to other countries scotland has a leading position in relation to social enterprise compared to dozens and dozens of countries have travelled and others here have travelled internationally to visit the world forum of social enterprise and scotland is regarded with envy because there has been a long-term consistent and coherent programme of support for social enterprise ground up and the scotland's government is to be commended for that and indeed over a number of years a number of organisations have added to that and i would not say that and that's that that's really social enterprise scotland's role in terms of promoting policy is in this sense that's important than the work of the of the programme delivery agencies that have actually implemented these programmes over many years it relates to training it relates to enterprise funds and the like and that that is all good the um there is much more however to be done in this context and i would just a couple of points on on on value and on measurement clearly we need to measure and clearly there needs to be a broad base of data but it's impossible to measure the gain in confidence of a young person so there is a limit to that exercise but if you look at christie and the requirement for preventative measures um as well that the people un is talking about who are able to to play a greater contribution in society um able to be employed able to contribute and their families that therefore don't need the social support the cost is reduction it it's actually it's not so much a percentage of an a factor of the benefit financially it's nothing else in in in social enterprise endeavour and although as a procurement lawyer i will tell you that the authority such as West Lothian must create a level playing field between all potential bidders for contracts um if and if an authority is able to take into account the impact then actually it's a pretty tall order to compete with that with an effective social enterprise furthermore the the one of the key things about the procurement reform act is not just on the community benefit side but also the requirement for an authority to think about breaking contracts into lots because currently to to great an extent the language of the procurement rules at european level is money it's currency mere money we're actually we're all interested in social matters and procurement is about doing things for people and social people to people people to people so that as brian says breaking things into smaller units is very helpful but at the end of the day we're talking about social matters and and finally there are so many different types of social enterprises as carne was saying there are many which face the public sector to support and indeed work work with with local authorities in the light there are many which seek to trade on a retail basis to compete head on with with the high street shops and and that is to be commended because as Neil is saying that's proportion of the Scottish economy that is social enterprises i would say only three to four percent that's not insignificant but we wish it to be greater Richard Duncan says about the the position of the sector in Scotland being in a positive one compared to other countries but you know what i hear many of my colleagues will hear is life fact getting increasingly tough the social enterprise in terms of support in terms of re-tendering exercise in terms of less money for the contracts occurring out a long time ago now we had cost we had debates around a strategic funding review in full cost recovery those seem like ancient history now so i mean i wonder what more can be done to alleviate that situation and one question they have is for example on three year funding cycles which is again a question asked very frequently in for a long time we talked about progress or more financial security for social enterprises going forward in terms of their grants and so i'll be interested to hear any comments people have on on those kind of areas and on that question specifically as well as i have as i have said there have been a long term coherent programme to support social enterprise which is a good thing but you're right that the focus has to be on the future and where we go forward the reality of increased demographic pressures and and and and a widening gap between the affordability of current level of health and social care for example means that we have very pressing need and i would suggest that social enterprise is a very serious contender for one of the solutions to making that a smaller gap as possible and all those on the table have better explanations of why that is so but we need we need to work very hard and there is absolutely not one bit of complacency about what needs to be done and we're not resting on any laurels we don't have any. I'm a more broader point I suppose from our perspective because what we're interested in doing is building a healthy and robust pipeline of new starts that will come through and I think you know from where I'm sitting I think in terms of what's needed in Scotland is looking at that pipeline and looking at who's starting up so I would like to see as being you know bringing more people in who are much more you know ambitious more confident but I think that can be said whether you're starting up a private business or a social enterprise I think we need to be sharing more success stories but not everyone will relate to the Tom hunters or the Richard Bransons in this world we need to be showing people that actually it's just people you know like them that can go on and be successful and start up you know some really good businesses so for me you know there is funding out there whether it's the new social investment funds coming along whether it's existing grant funds or whether it's finding your right market in terms of trading I think that exists I think it's about who's coming forward and where this you know where the pipeline is coming from. Just on the last point that can make something I think it's a social enterprise in Scotland there's no question it's been a remarkable success the engine of that of course is why I asked the question about who decides who the new entrants are and how they're qualified but that's compounded by the fact that many of them require business support and where do we qualify those that are supposed to give born and fighting business support to the various social enterprises particularly the new entrants and we also had the access to finance session that we had convener that including small businesses there are three three hundred and thirty different funding streams now and to probably get Alice's view on this I mean we have to keep this free entrepreneurial spirit going but there has to be some form of discipline in terms of reducing or qualifying probably the business support and also looking at the funding streams because I would suggest that without some form of discipline whether it's defining three or four different types of the social enterprise without qualifying the business support community that is meaningfully and similarly guided as the social enterprises are towards a social end and then looking at the funding sources we have this maze of contacts between social enterprises business support funding resources and that must be swollen up cost and expense and money that could be utilised elsewhere so I think I'd like to understand the reviews of the experts in the field as to how this thing hangs together or should hang better. I was about to say better together but I wouldn't say that. Politics is definitely off the table today. Alistair maybe I'll bring in Neil but Alistair first. I think that that is a very good point because as the social enterprise market has developed the social investment marketplace has matured or is maturing alongside that and there is a greater availability of investment options and funding options and grant options available to social enterprises now than perhaps there have been in the past and that's not just coming from Scottish Government sources which have been an excellent supporter in terms of that continuum of funding and support over the past five years or so but there is a requirement on organisations like social investment Scotland and others that operate in that field to make it as straightforward as possible for organisations to access that finance. We have to understand that for a social enterprise taking on investment for the first time that it can be terribly bamboozling for them because there's a jargon and there's a language and there's techniques and tools and products that they might not necessarily be aware of coming from a background where you've just been aware of applying for a grant and spending that and moving on from there so there's a big job for organisations like us to do to work with other providers and to actually develop the investment readiness of the social enterprise sector and that's something that social investment Scotland is doing quite actively with support from the European Union but just to go back about you were asking about Scottish Government support for the social enterprise community. Social investment Scotland has managed something called the Scottish investment fund for the past five years which was around about a third in terms of value in terms of the enterprising third sector action plan that came out in about 2008-9 and recently we've just evaluated that programme and we've been quite amazed by the results that have come out in terms of the fact that 100% of the organisations that receive their investment that's about 67 organisations say that they're more effective on the whole they are a lot more optimistic about the future so that there's more optimism than perhaps the evidence is there 96% increased their proportion of the income that they earn from trading and 95% say that they've increased their capacity so there are a movement of organisations who have taken that risk in terms of moving forward and taking more control of their own destiny that are now proving that that has made them more sustainable more optimistic of the future and they are able to deliver more social impact. Now that's a particular type of social enterprise in Scotland there are more than that but I think that by telling the story of that and by using examples of that then we can help other organisations move along that journey and to provide the support and advice that you were mentioning earlier. Can you just be clear like what kind of sectors these groups would be working in what kind of services they would be providing? It's a pan sector there was no particular theme but obviously a proportion of the money that came from the Scottish Investment Fund was repayable so they had to be already providing income streams that could be used to repay an investment so that in some ways provides a distinction to the broader social enterprise community but the whole mission of the Scottish Government support has been to make social enterprises more enterprising through providing enterprise ready funding and business support to support organisations that are moving along that journey to raising more income from their own resources. The other benefit is that it enables organisations to then get a match so we had money from the social investment fund which we could then use to match with grant funding which we otherwise couldn't have accessed so the impact was doubled. Just on that point I think one of the reasons when we go abroad talking about social enterprise that people are actually quite jealous quite frankly of the situation in Scotland is that it's been joined up and strategic for a long time so you have business support being funded you have investment as Alasdair is describing so well supported and learning and development so we've got kind of three legs to the stool there on a joined up basis across Scotland. The other point I'd like to make is in terms of the earlier question about where do we get the social entrepreneurs coming from the curriculum for excellence and again another part of the Scottish Government's strategy was to support entrepreneurship education in the school context through social enterprise. We've now worked in 600 schools across Scotland, 1,000 teachers, 24,000 young people and what we've found from the teachers generally speaking is that if you put the word social in front of the word enterprise the school is more receptive to the principle of entrepreneurship as a subject so we're seeing youngsters who are accepting that principle of entrepreneurship because they'll be involved in a learning by doing approach to social entrepreneurship and they know by the fact they've done it that they can at some point in the future start a business and I think that whole pipeline that kind of joined up approach that the Scottish Government have done so well on over that period I think is to be commended and it's going to bear fruit in the future. There's been not necessarily a social enterprise because our entrepreneurship basically is taking them forward and you're saying they've got the confidence to move forward. We're not precious about what other business model they want to adopt. We're saying that the entrepreneurship skills are completely transferable and they're the same and what they want to do in the future is their business but entrepreneurship education that the research shows is too late at university and later entrepreneurship in primary schools and secondary schools allows these young people to say yes I can at some point in the future and we're seeing the results of that it's early days but it's very positive. I'm hearing a lot of positive input about support financial and otherwise for social enterprises and the big lottery fund their research suggests that 64% of social enterprises think the future is rosy and they're expecting to increase turnover in the next few years. Is that your expectation too and I'd just like to better understand the survival rates among social enterprises do they you know how do they compare with private business survival rates? I think just picking up on that point there so we first of all we managed and have done since 2009 the Scottish Government's social entrepreneurs fund and we I know you'll read this because we did post a copy to all the MSPs but in the start something good's impact report what we found was that of the social enterprises that continued on their journey so that generally meant they'd access the what we call the label to build it awards three out of five of them are still around after five years which we you know were extremely surprised first of all but very positive about I don't have a comparison though with say business gateway figures or the private sector but I think you know I've brought some extra copies along here today but if you read the report most of the data does actually come from the social entrepreneurs you know that set up social enterprises through that support from Scottish Government and it does tell us that supporting start-ups really does work so that was a big change in 2009 when you know Scottish Government looked at putting start-ups into you know part of its wider third sector action plan one of the things though that we did do and I think coming back to the point that chick had made earlier which was about it being amazed what we did was we joined up with another fund called the millennium awards trust so what we we run a joint programme which is the government social entrepreneurs fund and the millennium awards trust so we take in all the complexity but for the individual start now there's just one point of access and then my final point on that is that when you have to combine the money with support I think if you give money in isolation with no support it's not going to deliver you know the the outcome or the best outcomes and vice versa you know you can have support but you know especially start-ups each business you know it will require some kind of seed funding to get going How do you establish and qualify the business support the good business support that's needed for you know social enterprises but my experience in in the industry going back is you know there's some very good business support I won't use the word consultant business support people but there are also some people who frankly are on the make it's a fair point and I think we've always taken the approach in first port when we employ business support advisors which we keep separate from the people who make the judgments on say the funding applications and they've come from a commercial background so you know the people that we've employed know about business you know can sit down with someone and help them analyse their market and their customers so I think we've ourselves have built that in you know to our own recruitment processes and just in terms of how we run the organisation but again that is I guess you know very subjective I think you're you know you're right there's a lot you know there can be lots of support out there provided through different networks and it's probably patchy in some ways we're fortunate in that we are a small organisation you know we only have two business advisors but they cover the whole of Scotland but what we measure their effectiveness on is well first of all the feedback from the clients which largely is customer satisfaction but then what we will go back and do you know a year or two years after they've had that support is to try and you know look at the direct links in terms of what interventions that we made made the biggest difference so things like obviously when people get that one-to-one support you know makes a much bigger difference that's why we've continually changed the service so that what we're doing is you know we're moving towards where we can provide you know a much more intense service obviously that makes it slightly more expensive you know to provide because when you think about the staffing time so we balance that up because we know at what points people will come into as where they get to and then when we can add in as I said you know a more intense service that's going to be more effective I can answer that question a wee bit as well hi says delivers the just enterprise programme for the highlands and islands and the just enterprise programme is the Scottish government's programme to enable advice to be there for social enterprises we measure our success simply by the number of you know if we are not getting phone calls then people don't like us if we're getting more phone calls than we got last year then you know forget the research that means that we're running the corner shop properly and people are coming to us for advice so we've got loads of inquiries coming in and the interesting thing that again I'd like you to think about in central Scotland is that north of the country you've got highlands and islands enterprise which has a social remit so there are quite a lot of social enterprises that will come on to us asking for specific advice about a particular subject and lo and behold we can be working along with consultants coming in from highlands and islands enterprise who will be delivering a particular thing and indeed we will use business gateway who will deliver particular things as well and when you get that kind of mix there is actually a lot of support there but you're right some of them are rubbish and some of them are also some of them are good but you don't get on with them and the whole thing about having that choice of hi says or business gateway or highlands and islands enterprise the chances are that you'll find somebody there that you'll pick up the phone. I better not say anything else before Andy asks for any names. I remember Chick Rooney was a consultant in a previous one. I was a transitional adviser. The success rate again say within highlands and islands and maybe other remote and rural parts of Scotland not necessarily just the highlands and islands are you aware of the success rate in terms of when business start up? Success rates are always too high because people won't give up when they're doing something impossible. We go into social enterprise with all the time when we look at them and say no, it's insane to try and do this, but you can't get them to stop because it's a social thing that they're trying to deliver so they'll be working 10 hours on top of their day job and still trying to make this impossible thing happen and you've got to love them for it. I've listened with interest in the discussion around the table this morning. I should perhaps say at this point that I'm a convener of the volunteering and the voluntary sector cross-party group. From the social enterprise point of view, many of the social enterprises rely on volunteers. They don't all have peer employees. I wonder where we have this crossover with volunteers and employed staff and we also have organisations who are calling themselves social enterprises and others who are saying they're charitable but actually they are social enterprises. They're all looking for funding as well from what I can understand. Most of them are looking for funding from the Government or big lottery different sources. How does that all get tied together? We hear about the minefield and I hear from social enterprises in my area about how difficult it is to get funding. Once they have got funding and they've reached that magic level where they can actually fill in the application forms and they're recognised, it is easier for them to get funding in the future although it's less. But there does come a stage where that dries up because they've had it last year so they don't get it. So how do we look into the future? How do we get that sustainability as well so that social enterprises can continue and indeed do what they want to do, which is put it back into the community and give the social benefit to their communities? We haven't got a clear definition. We can't measure the value because it is so difficult. It's just where we go from here. To me you're saying we give some funding to this one and that one but at the same time you must be able to measure that to do that to give that funding. It's really difficult and I just wonder if anyone's got an answer to where we go from here around the funding issues and the actual value that we are providing to the communities? Thank you for the question. Clearly the third sector is a phenomenally complex and the interface between the range of bodies in the third sector and the other stakeholders is phenomenally difficult to interrogate. Please remember one thing above all which is that a social enterprise trades to generate surfaces in a year on year basis so that it is economically viable and sustainable in the longer term. What that means is partly that whereas to begin with it may wish support and there'll be grant funding to start with and the programme is there, over time the aim of a social entrepreneur is to create a self-standing business that does not need to be subsidised and that is the distinction between it and another form of equally valid and important third sector entity, which may be a charity that perhaps has an endowment or other basis of approach and which has at its heart a mission and an activity and endeavour that will never be capable of being, at the example we had was in relation to befriending, to make it into a business model is actually really seen as possibly quite hard in some cases. It becomes a question of recognising and identifying social entrepreneurship and Neil's activities that the social enterprise economy pursues to encourage that identification. It becomes important to see how effective it is to support the social entrepreneur to enable as many businesses as possible to reduce the attrition rate and the failure rate and part of it is connecting up investment that is going to support in the longer term which raises the question of how you maintain the integrity of the social enterprise if you're going to have an investor coming in, will that weaken or impair the social dedication towards the mission? But overall please remember that a sustainable social enterprise should be able to operate without public subsidy and that is our benefit in relation to the work that needs to be done to maintain the level of social and community support that we would all wish in Scotland in the future actually. Thanks Neil. Yeah just to carry on a similar theme but not exactly the same but I think going with social entrepreneurship there's social responsibility as well. I don't think we can lose that. I think there's a professionalism required. One of the things our organisation's doing is now paying a living wage. I think that's important. The other thing we're looking at is quality all the time. We're not going to compromise stand-ups and if you look at an organisation like ours we are doing things for the long term, we're really into giving services in the long term so I think to have that can sustain the long term sustainability but the downside if you can do that you can sometimes meet yourself not as competitive it's making sure you get the balance between the quality you know paying people properly for doing a job as professionals. I think voluntary work is good but you have got regulation on disclosures etc so I think there's another range of issues around what we do but just the social responsibility going along with social entrepreneurship and having social driven companies is very important and that can be almost a kind of negative effect if you're trying to win tenders but a really positive effect when it comes to customer satisfaction so there are a few issues in there. What tears have got a huge role especially with some of the social enterprises in our area and the opportunities volunteering opens for people who would traditionally find difficulty getting into the workspace. The issue can come when you almost get to a victim of your own success running a social enterprise and you get to that crossover stage where the manager can't do everything anymore so they need extra staff but they're not earning enough money to pay the extra staff and I know that we have a social enterprise in Westland that is at that stage at the moment in fact I'm just going to bend allisters here about that afterwards because in order if that enterprise is not sustainable because they're just at that stage where their capacity has grown to the point where they really need to take the next leap but they don't have the resources to pay another member of staff the danger is that the whole thing will collapse and that particular organisation has something like 40 volunteers attached to it who will just have nowhere to go so I think that there's a slight gap and things like the enterprise ready fund and this enterprise growth fund have been really useful in helping organisations make the next step but some need a wee bit of help before that and I think that volunteers will always be involved in social enterprise but your business shouldn't rely on your volunteers and that there's a bit of a danger that in order to get something up and running you just cram a place about volunteers and we're talking here about shops and it's a great true there's lots of training health and safety training first aid everything goes along with it it's really good but the shop is dependent on the workforce of volunteers and I think that's an error I think you have to use your volunteers for things that are addirectrous that the volunteer gets something out of that not just that you're leaning on volunteers to grow your business because you'll come to a critical point where you need extra paid staff and that's a wee bit of a gap in that step up and I think social investment might be the thing that that comes in at that point it has to be said that lots of social enterprise boards are very risk avers and that's a cultural change that we need to try and promote is that you will get to a stage in your business where you need to invest if you always say to our members if you were running your own business where would you go for the money nobody's going to come along give you a grant if you're running your own business so what would you do if you get to that critical growth stage and we've found and we've got a very good relationship with business gateway with Scottish business in the community and a lot of the intermediary providers and there's lots of support out there the just enterprise fund is absolutely brilliant for people who are at that stage of growth and they maybe just need a skill or a bit of advice on one particular aspect that can take them over that hurdle but I have a fear that will grow social enterprises to a certain stage and then if they can't get the right support in that stage to keep them going that we will in future get a worse attrition rate. Okay I've got Brian and Neil I want to come in we've got about 10 minutes to go and when we've done that what I'd like to do is just go round and ask people if there was one or two things you wanted the committee to take away and try and influence subsequent to this meeting what would that be so just have a think about that for the next few moments and but to continue the discussion firstly with Brian. My you were asking about about funding and so on and our experience with these 500 social enterprises that we've seen over the last six years is that funding isn't really a problem to them frequently they know how to get the money the big problem we see all the time is the capability of boards not even so much the management the capability of boards um and it might be interesting to look at that over the next few years I would love it if there was a law that said you can't be on a board for more than four years because what happens is you get 64 year old guys who are going to be on there for the next 20 years and they're too embarrassed to say I can't remember what we're talking about um you know there's also let me say the other horrendous thing about why don't we pay boards because the really interesting thing that happens if you don't pay boards you do get a whole lot of 64 year old guys and what you don't get is 30 year old young women because they need to earn now we block out and if you look at all the boards that we've got in small social enterprises they're all old folk who don't know don't know how to make work so limit limit that would be you know the one thing and limiting the period that it could be on and maybe asking for some kind of qualifications for board members it is not fair to ask somebody to be a volunteer board member of an organisation that employs 10 people when that volunteer board member doesn't understand what being solvent and not being solvent is and could potentially you know put the employment of 10 families at risk it's not fair so ask them either pay them or give them a ask them to make an investment or require a qualification for them before you give them half a million quid isn't that an issue in smaller communities you're talking about the highlands and islands where you know in a small village there may not be that person there absolutely they might not be there so that being the case don't ever dare give them 200 000 quid and expect them to be able to do anything worthwhile with it or give them 200 000 quid and just accept they're not going to do anything worth it thank you all right neil come back to your question i think duncan really eloquently described the point of arrival in the kind of where people would like to get to but the reality is there's a lot of folk on that journey and certainly the code of conduct talks about aspiring to in a trading context i think it comes back to a function of leadership you know organisations are faced with a changing environment in terms of the reduction in grants and i think we do need to keep investing in leadership development across the whole sector when we do deliver this it's ubiquitous in the public sector it's ubiquitous in the private sector but we're not seeing that same investment there's some in the Scottish government's plans but there's not enough and i think the governance question is also a question of leadership the governance boards need to be well led and there's far too much focus on competencies about reading a financial paper rather than a reflective discussion on what is your role as a board member in delivering this outcome and that's a leadership question that's reflective and requires some safe space to talk about not solely a focus on competence the competencies have to be there as well obviously but the bit we need to add to that is people having the opportunity to look at those questions reflectively and safely okay um we've got just over five minutes left what i'd like to do is just go round our guests and ask them to address the question i put which is if you want us to take away one or two key issues from today's discussion things that need to be changed before you think we might be able to influence policy what would they be um maybe start i'll start with yourself i'm just working away right i suppose mine is selfish in relation to the social investment marketplace but what i would plead with the Scottish government to be is to be respectful of the fact that there is now a diverse and active social investment marketplace and the government has a role to play in not compromising the development of that marketplace but perhaps by supporting the development of it by perhaps supplying less direct investment but by using its investment as a way to attract new funds into the sector which can come in an appropriate way that doesn't compromise md's mission or integrity or definitions but can help to grow further the size of the social economy in scotland to funds as a government funds as a catalyst rather than an intelligent way in a way that's aware of the infrastructure and market that has developed okay Fiona I would like to see a bigger role for the social enterprise networks we're all member led we know our members we know how to get them tapped into the right places but there's a whistle then it's probably the envy of a lot of social enterprise networks in that we are not attached to the local third sector interface that presents its own problems but I think that if the money for cents if cents could be more independent we would get better outcomes on social enterprise okay thank you I'd like you all to take a copy of this away so it'll save me carrying them back to Glasgow but I think I would like to see the you know the MSPs Scottish Government to look more closely at the start-up scene I think you know there's been a healthy investment you know made in that since 2009 but I think there's a lot more that we can do and I think you know there's some interesting developments you know that are going on where you see the start-up scene joining up now with what you've normally seen in quite a linear you know process with say social investment scotlands and I think they'll be really exciting things you know coming out of that so I think it's a case of just you know paying more closer attention to that for us repeat what I just said I think there needs to be a bigger investment and acknowledgement of the role of boards in terms of leadership and leadership development across the third sector it's a it's a modest investment going in just now which is very welcomed but there needs to be more of it to allow partnership working to happen to allow you know that continuation of moving towards sustainability and I think it's that area and that sense of mindset chef we've got fantastic resources in scotland and when we see that coming through in transformational learning where people see themselves differently and see themselves that the role that they have in the board as one of policing themselves rather than being asked to leave I think there's a huge opportunity that we're missing under and I'm involved with one of Brian's 64 year old board members in the development of a large socialised social enterprise hotel on the Inverness campus it's a 20 million pound project and we've today received huge amounts of support and encouragement from both HIE and the Scottish Government and my request would be for that to continue because actually the interest and encouragement gives us a credibility and a momentum that we would take a lot longer to generate on our own right I would like to go back to procurement and suggest that you look very carefully at requiring procurement officers to come out with smaller contracts simple as that and the other thing is that if you're putting large sums of money into organisations I would like those board members I'd like board members to be qualified in some way and probably limited so they can't be there for 30 years thank you thanks thank you for the chance to for us to speak with you today I hope you'll take away that social enterprise has huge potential for Scotland and the Scottish economy I hope we'll appreciate and this is maybe to look at again that there are strata's there are different types of social enterprises we've talked a lot about the public sector facing the ones that complement the public sector but there are innovative commercial entities that are social enterprises that I could and should be part of the Scottish economy and please look strategically at that and for instance in recent health and other innovations and research sector there are things and social challenges that we face in 10, 20, 50 years time social enterprise is part of that solution but second I would also say that there's an unusually high number of women involved in social enterprises and as social entrepreneurs and as well as this point about age not to be agest the bringing forward of the potential the empathies the skills of of of half of Scotland and the the female side of things is actually something that I think will will it also give huge benefits and is another source of untapped potential to next day and here finally I agree with everybody else all of these things but I think really there's a couple of things one on the kind of the grant funding the catalyst of the investment and I think Kevin there was a suggestion possibly on a three-year kind of investment because things don't happen overnight you know there is a kind of a feed-in to allow people to become established and to create markets of their own and then that will lead on so I think having a kind of you know a longer term grant funding side to make sure there's adequate time another thing I'd like the the government to kind of consider is you know looking at the measurements the difficult question was how would you measure a return on on that kind of social investment I think any kind of ways you can measure appreciate some of the kind of the the it should be output space how can you measure the outputs I think there may be some thought on on the output so there's not having to sell the output so hard every time when it is really difficult sometimes to do that so if you're going to give some consideration to that point okay thank you good right well with impeccable timing we have reached the end of our session so on behalf of the committee members can I thank you all very much for coming along and contributing to the discussion I've certainly found it very useful and I'm sure the other members have and we will now consider as a committee how we take some of these issues forward what's going to happen now is the committee is going to move into private session very briefly now I think I heard the rattling of your lunch arriving outside so if you are able to stay on for informal lunch we also have some other people who are joining us over lunch and I think we're going to have to ask you to to vacate and go outside and have yourself a lunch we're going to have a brief discussion and then we'll come out and join you in that at which point we can all come back in and have lunch and continue the discussion in a more informal manner so I'll have a short suspension and we will go into private session