Viking Report 2

Copyright The TREES Group, V Froggatt July 2011

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VIKING 2A report into the social and financial benefits of the Spark Challenge in the three years to March 2011

Igniting socialenterprise

Viking 2 Report into the Social and Financial Benefits of the Spark Challenge in the

three years to March 2011

AuthorVivienne Froggatt

BT

Supported by Dr. Mark C Graham, Director, Corporate FinancePricewaterhouseCoopers LLP

October 2011Leicester

Igniting socialenterprise


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Contents

Foreword ...............................................................................................6

Authors’ Note ........................................................................................6

Executive Summary ..............................................................................7

Report .................................................................................................11

1) About the report ..............................................................................112) Spark Model ...................................................................................123) Outcomes and achievements .........................................................154) Social value created / SROI ...........................................................175) Attribution rate ................................................................................186) What might have happened if Spark had not been here?..........................................................................................197) Leverage .........................................................................................208) Sustainability ..................................................................................209) Why would corporates want to be involved? ..................................2110) Impact and benefits of Spark ........................................................2211) Broader impact of Spark ...............................................................2312) Conclusion ....................................................................................24

Appendix 1 – Nigel’s story ..................................................................27

Appendix 2 – The Spark enterprises ..................................................28

2008 Investments ...............................................................................282009 Investments ...............................................................................292010 Investments ...............................................................................31SPARKLERS 2009 .............................................................................33SPARKLERS 2010 ...........................................................................33

Appendix 3 - About the author ............................................................34


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ForewordOne of the things that struck me when I moved into a social enterprise organisation after 20 years in the construction industry was the passion that social entrepreneurs had for their products and services, and the desire to benefit and improve the communities they served. Their enthusiasm and determination meant that they often succeeded against all the odds.

We wondered if there was a way to involve the private sector to support the development of business skills among social entrepreneurs.

We also considered whether the government might divert some funding to provide start-up capital – so often lacking in this sector.

Could that combination of passion, business skills and money really create sustainable social businesses?

Would it be possible to do this in a way that could address the particularly difficult issues surrounding homelessness?

Was it a good idea, could it work?

John Montague Co-founder of Spark

Authors’ NoteOn my first day, as a Charitable Secondee from BT to the TREES Group, I was given the “Viking” Report to read, it examined the results and projections from the first year of Spark investment.

I also discovered that investments had been made in over 30 social businesses in England; a version of Spark – “The Crunch” had been launched in Australia; and that a delegation from Japan was due to visit to find out if they could replicate the idea there.

This was my introduction to Spark and it seemed too good to be true!

Over the last 4 months I have visited a number of the businesses and met many of the social entrepreneurs. I have been inspired by their passion and amazed by their vision.

However, as an engineer, I wanted to find out more by researching the facts and drawing my own conclusions.

Is Spark a good idea and does it work?

Viv FroggattProject Manager BT


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Executive SummarySpark Challenge is managed by The TREES Group and invests in social enterprises that provide work experience, training and employment to homeless people. Spark demonstrates that combining public sector investment, private sector expertise and third sector knowledge to develop sustainable business ideas does work.

The investments made by the Department for Communities and Local Government in 2008, 2009 and 2010 have been examined, and the outcomes achieved in the years to 31st March 2009, 2010 and 2011 have been analysed.

This report demonstrates that Spark in an excellent model that creates real value for money, has helped vulnerably housed people and generates real social value.

Spark has helped vulnerably housed people.

• Overall 6,370 people have been assisted1 (5,930 directly attributable to Spark)• 696 have entered sustainable employment2 (536 directly attributable to Spark)• 872 have gained secure housing tenancies3 (832 directly attributable to Spark)

Spark has created real social value4.

• As at March 2011, social value £8.9m has been generated5 • A Social return on investment6 (SROI) of 1:3• No social value has been assumed for initial engagement, needs assessment,

individual work plans, job search, vocational training, work experience, healthcare or welfare benefit advice

“I love Spark. It’s a release of energy bringing two worlds together. Spark opens the eyes of our people to the world outside and I hope that it gives the enterprises access to professionals who will help them realise their social enterprise dreams.”

Phillip Wright, Partner, PricewaterhouseCoopers

1. Based on initial engagement including Information, Advice, Guidance and Needs Assessment2. Sustainable employment – greater than 6 months3. Secure tenancies - greater than 6 months4. Social value created is a monetary evaluation of employment & housing help provided to individuals by the social enterprises5. Based on Exchequer values, see SROI in the report for further detail6. SROI = Social value created / Initial investment


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Additional leverage was gained as a result of the Spark investment:

• Cash and in-kind benefits from Corporate Partners of £1.3m• Other direct investment of £3.2m• A total of £4.5m and a leverage rate7 on the government’s investment of £2.9m

equal to 2.5

Sustainable businesses are being created.

• Six of the nine 2008 investees are now profitable or trading at break-even, with the other three expecting to reach break-even within 12 months

• Six of the 2009 investees are now profitable or trading at break-even, with only one of the remainder facing financial difficulties

• It is too early in the life cycle of the 2010 investees to evaluate, however one is struggling and is being supported by their corporate partner and the Spark team

The corporate partners gained a variety of benefits from involvement with Spark.

• Training and personal development of staff• Gaining new business• Increased corporate social responsibility• First-hand engagement with social enterprises and homeless people has enabled

over 200 hundred staff from the corporate partners to increase their personal social awareness in a practical way

Nick, who is a trainee at Aspire’s Heritage Kitchen Garden, is a qualified psychiatric nurse but his drink problem made him unemployable. He says:

“I have been amazed at the opportunities I have been given here.”

This unique social business investment model is replicable in developing social enterprises in:

• Specific business areas e.g. health • Delivering innovative sustainable solutions to disadvantaged groups e.g.

ex-offenders

The Spark model also demonstrates a method of engaging the private sector in using their expertise to tackle social issues.

Because of the ongoing development of the Spark programme, future investments will have the potential to create an even greater impact.

7. Total of government and third party investment divided by government investment


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Core to the success of Spark is that it is an iterative investment model, with the ongoing impact of investments made in 2008 creating increasing value in subsequent years; for every £1 invested in 2008, £1.45 of social value was created in the year to 31st March 2009, £2.54 to 2010, £4.63 to 2011 and £8.62 over the 3 years.

“Creating lasting change by encouraging social enterprise…..is enormous value for money.”

Richard Cunningham, Homes and Communities Agency


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Report

1) About the reportThe purpose of the report is to show how the initial concept for Spark has transformed into measurable social outcomes from the original belief of the founding partners, John Montague of the TREES Group and Nigel Kershaw OBE of Big Issue Invest, that “sustainable social justice can be delivered through business enterprise”.8

Spark was launched as part of CLG’s9 strategic initiative to bring an end to rough sleeping in England10, with a government investment of £2,940,000 over the 3 years to March 2011.

Marija Ilic, Nottingham Stride typifies the stories of people who are given opportunities to work through Spark investments,

“Now I’m working, I feel I can get on with my life. I’ve got my confidence back and my family are really pleased that I’m happy and moving forward. The best thing for me is being given a chance.”

Following the Viking Report11, which investigated the impact of the 2008 investments made by Spark Challenge and assessed its potential impact over 5 years, this report deals with the actual outcomes achieved in the 3 years to 31st March 2011, arising from the investments made in 2008, 2009 and 2010.

The methodology, structure, formulae and questionnaires used to prepare this document are based upon those developed in the original Viking Report.

Dr Mark Graham of Pricewaterhouse Coopers has again advised and guided in the preparation of the report.

All the organisations in which Spark Challenge had made major investments were contacted. It was agreed that for the purposes of this report there was no validity in including the eight minor awards made in 2008 and 2009 as they were essentially compensation to those organisations that did not get a major investment. Sparklers is an investment programme to assist individual homeless entrepreneurs to start their own businesses or become self-employed and was an integral part of the overall Spark Challenge in both 2009 and 2010.

8. John Montague, presentation to Spark Partners 20079. CLG – Department for Communities and Local Government10. No One Left Out - Strategy document, Department for Communities and Local Government, London 200811. The Viking Report into the Social and Financial Benefits of the Spark Challenge 2008, Copyright The TREES Group, F Olausson,

K Giodesen May 2010


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For the purposes of this report it was agreed to include both the 2009 and 2010 Sparklers programmes as major investments.

Andy Wand had not worked since his release from prison. He said:

“I want to become self-employed and develop my own business, something I can focus on and enjoy. I’m ready to turn my life around.”

Sparklers has helped him to achieve his goal – he now has his own painting and decorating business in Melton Mowbray, Leicestershire.

Data gathering was carried out by sending out questionnaires to all the 34 Spark and Sparkler enterprises that had received Spark investments. All of the questionnaires were completed and returned. When further information or clarification was required this was achieved by telephone interviews.

In addition to the information described above, this report has also made use of other data and values gathered from a variety of sources, with guidance from CLG and PricewaterhouseCoopers, primarily for establishing monetary values, including employment and housing costs.

Table 1 - Overall Investment Total 2008 2009 2010Major Investments 34 9 13 12

Returned Questionnaires 34 9 13 12

Government Investment in Spark £2,940,000 £740,000 £950,000 £1,250,000

2) Spark ModelSpark was launched in December 2007 and was founded on the conviction that an enterprise approach offers a long-term and sustainable way to address homelessness. Spark believes that the collaboration of cross-sector partners is the best model to achieve this.

The Spark Partners comprise: -

• Department for Communities and Local Government (CLG)• Big Issue Invest (BII) – co-founder• The TREES Group (TREES) – co-founder / accountable body• BT Global Services (BT) – corporate partner• Places for People (PfP) – corporate partner• PricewaterhouseCoopers (PwC) – corporate partner • Willmott Dixon (WD) – corporate partner (2010 only)


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The original Spark model developed in 2007 was heavily dependent on an external firm of consultants to manage the overall process, as follows:

• Application process— Managed by external consultants

• Short listing— Managed by external consultants

• Selection of finalists from shortlist— Spark Partners

• Development of business plans— Written by external consultants with input from finalists

• Pitching event— Presented by finalists — To panel comprising Spark Partners

• Investment decision— Spark Partners— Investees allocated corporate partners

• Implementation— Supported by teams from Spark corporate partners

• Post implementation— Ad hoc support

Various issues arose from this process, significantly:

• The corporate partners did not really get involved until the implementation stage• They, sometimes, found that the business plans were not appropriate and had to

re-work them• Post-implementation the investees received little ongoing business support,

unless a corporate partner had joined the board

This led to the corporate partners wishing to become involved earlier in the process and the need for ongoing business support to be given to past and future investees.

CLG increased funding in 2010 to include the provision of business support to investees.

In readiness for the 2010 Spark launch the partners agreed that TREES would set up a Spark team to both manage the investment programme and provide business support across a range of areas including finance, governance, human resources, health and safety, marketing, website development and other specific areas as identified by the investees.

The revised model is as follows: -

• Application process— Managed by Spark team

• Shortlisting— Managed by Spark team

• Selection of finalists from shortlist— Spark Partners— Investees allocated corporate partners


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• Development of business plans— Written by finalists with support and guidance from the corporate partners and Spark team

• Pitching event— Presented by finalists, with support from allocated corporate partner— To panel comprising Spark Partners

• Investment decision— Spark Partners

• Implementation— Supported by teams from Spark corporate partners— Supported by Spark team

• Post-implementation— Review of all previous investees undertaken — Support made available to all previous investees as required— Support currently available to all new investees

• Spark Network— Promotion of all investees’ various businesses to each other— Inter-trading e.g. the use of Jericho’s printing business by other Spark investees instead of using commercial printers— Exchanging knowledge and ideas— Supporting other Spark investees in developing their businesses

Former drug abuser, Wayne, says he was “quite an unruly character” when he joined the Beyond Food team, but he’s proud of his progress.

“I’m just washing plates, but every clean plate means something to me.”

BT, PfP and PwC all stated that the revised model worked better for them and that their staff had had a far greater “buy-in”.

B.hug and PATH, two 2008 investees, gained further investment in 2010 to expand and replicate their businesses. They both stated that the revised processes and additional support given in 2010 was a great improvement.

“The involvement of the Spark team made the 2010 process run much more smoothly than in previous years.”

Steve Mather, Director, Places for People


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3) Outcomes and achievementsThe help given to both homeless people and those at risk of becoming homeless is based on data received from the enterprises and is set out by year of investment and year given in Table 2 below. This means that enterprises invested in during 2008 will show figures for all three years whilst enterprises invested in during 2010 will only show figures against ‘Year to March 2011’. The figures for 2010 are lower as only two of these enterprises have been trading for a full 12 months, and six have been trading for less than three months.

Table 2 - Help provided Actual help provided

Year of Investment 2008 2009 2010 Total

Initial Engagement

Year to March 2009 670 670

Year to March 2010 1,185 890 2,075

Year to March 2011 1,838 1,608 179 3,625

Total 3,693 2,498 179 6,370

Job training


Year to March 2010 799 259 1,058

Year to March 2011 1,323 413 122 1,858

Total 2,555 672 122 3,349

Work Experience


Year to March 2010 478 187 665

Year to March 2011 546 264 106 916

Total 1,255 451 106 1,812

Initial Employment


Year to March 2010 152 127 279

Year to March 2011 545 158 22 725

Total 754 285 22 1,061

Sustainable employment


Year to March 2010 104 43 147

Year to March 2011 330 131 30 491

Total 492 174 30 696

Short-term housing


Year to March 2010 69 36 105

Year to March 2011 79 45 87 211

Total 198 81 87 366

Secure tenancies


Year to March 2010 218 101 319

Year to March 2011 194 124 92 410

Total 555 225 92 872

In terms of the number of individuals supported, not all the help that has been provided by the enterprises can be attributed to Spark.


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Each business was reviewed and assigned an individual attribution rate; see the explanation of “attribution rate” formulae in Section 5.

The help given that is attributable to Spark is given in Table 3.

Table 3 - Help provided Actual help provided

Year of Investment 2008 2009 2010 Total

Initial Engagement


Year to March 2010 1,185 861 2,046

Year to March 2011 1,470 1,582 162 3,214

Total 3,325 2,443 162 5,930

Job training


Year to March 2010 799 221 1,020

Year to March 2011 1,058 367 111 1,537

Total 2,290 588 111 2,990

Work Experience


Year to March 2010 478 118 646

Year to March 2011 437 153 102 783

Total 1,146 271 102 1,660

Initial Employment


Year to March 2010 152 118 270

Year to March 2011 436 153 21 610

Total 645 271 21 937



Year to March 2010 104 37 141

Year to March 2011 264 45 28 337

Total 426 82 28 536

Short-term housing


Year to March 2010 69 36 105

Year to March 2011 63 45 87 195

Total 182 81 87 350

Secure tenancies


Year to March 2010 218 101 319

Year to March 2011 155 124 91 370

Total 516 225 91 832

If the business would not have existed without Spark investment, the attribution rate is 100%.

If the business would have existed then the attribution rate has been calculated to include the strategic added value from corporate partners and Spark, for which there is qualitative evidence.


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All the 2008 investments have been further discounted by 20% in the year to March 2011 to reflect the reducing Spark impact in subsequent years.

No social value has been assumed for initial engagement, needs assessment, individual work plans, job search, vocational training, work experience, healthcare or welfare benefit advice that has been given to homeless people by the Spark Challenge investees.

4) Social value created / SROIThe social return on investment (SROI) illustrates the relationship between the government’s initial investment and the value that has been created by the investment. The value created is termed “social value created” and consists of new income and savings, to the government, generated from the individuals helped through Spark.

Richard Cunningham from the Homes and Communities Agency, one of the government bodies involved in Spark, says he believes that Spark is making the most of the funding it has been given: “Creating lasting change by encouraging social enterprise, sharpening business skills and promoting different ways of thinking about delivering social outcomes is enormous value for money.”

The government investment in Spark during the three years to March 2011 was £2.9k. The social value created as at March 2011 is £8.9m, which gives a SROI of 304%; see Table 4 below.

Table 4 - Social Value Created Attributable to Spark

Year of investment Total 2008 2009 2010

£k £k £k £k

Initial employment


Year to March 2010 433 244 189

Year to March 2011 980 700 246 34

Total 1,505 1,036 435 34



Year to March 2010 907 668 239

Year to March 2011 2,705 1,697 829 179

Total 3,985 2,738 1,068 179

Short-term housing


Year to March 2010 99 65 34

Year to March 2011 183 59 42 82

Total 329 171 76 82

Secure tenancies


Year to March 2010 1,197 819 378

Year to March 2011 1,391 584 465 342

Total 3,124 1,939 843 342

Total social value created 8,943 5,884 2,422 637

Social return on investment 304% 795% 255% 51%


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The social value created reflects the value that each individual helped by a Spark enterprise creates. To simplify calculations, only employment and housing are included in the calculations. This implies that the total social value created is higher.

The values used are as follows: -

• Sustainable employment £6,426, being the total yearly benefit to public spending from person becoming employed12

• Initial employment £1,606.50, being 25% of the annual rate • Secure tenancies £3,756 being the difference in cost between settled and

temporary accommodation13 • Short-term housing £939, being 25% of the annual rate • No values have been included for all the other support given to vulnerably housed

people

“I felt totally insecure, couldn’t handle responsibility and tried to find contentment. Gilead provided me with the environment to get my life back together. The work experience I have gained has been so important. I have also learnt about personal responsibility and the importance of diligence and discipline.”

Paul, who is now in sustainable employment and housing.

5) Attribution rateThe attribution rate is used to determine what amount of the help that has been created by the enterprises can be attributed to Spark. The size of the rate does not just depend on the Spark investment in relation to the total investment. It also includes the significance of the Spark investment and the strategic added value delivered by the corporate partners and Spark.

The critical question is whether the enterprise would have existed without Spark:

• If the answer is no, the attribution rate is 100% • If the answer is yes, the attribution rate is determined by the other factors shown

in Table 5• The investment ratio is the relationship between the total investment and the

Spark investment plus additional investments attributable to Spark. • The impact from partner and Spark strategic added value is determined based

on how critical the help was and whether it was provided in an area critical for the success of the business.

• Whether or not the enterprise was a start up.

12. CLG report ’Research into the financial benefits of the Supporting People programme, 2009’ cost of benefits and related services P150 (£4,152) added to Employee NI and Tax and Employer NI based on a person earning the minimum wage http://www.hmrc.gov.uk/rates/nic.htm accessed 26th July 2011

13. CLG report ‘Research into the financial benefits of the Supporting People programme, 2009’ pages 150/1


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No data has been found to determine the multiplier for a “critical impact” from a partner or Spark or for a start-up.

The assumptions made, in conjunction with PricewaterhouseCoopers, to reflect the added value of these factors, have been set deliberately low to ensure “realism” and are set out in Table 5.

Table 5 - Attribution rate multipliers

Category Multiplier

Level 0 - non-critical impact in a non-critical area 1.00

Level 1 - critical impact in a non-critical area 1.03

Level 2 - non-critical impact in a critical area 1.06

Level 3 - critical impact in a critical area 1.09

Start up - additional support required 1.05

The impact from corporate partners and Spark has been determined for each enterprise, from these factors the attribution rate is calculated as follows:

Attribution rate = Investment ratio * Multiplier from Partner * Multiplier from Spark * Multiplier for Start up

The initial attribution rate is annually reduced by 20%, as determined in cooperation with PricewaterhouseCoopers. This indicates that, five years after the first full year of trading following investment the initial support from Spark is no longer assumed to be attributable for any of the social value the enterprise subsequently creates.

6) What might have happened if Spark had notbeen here?A detailed evaluation of the enterprises suggests that if the Spark investment and support had not been available, 20 of the social enterprises would not be in existence; however 14 would still have proceeded with their business ideas, but at a smaller scale with more limited service offerings.

Of those businesses that would have existed without Spark, five stated that the investment was critical to their development, seven that the support received from the corporate partners was crucial and seven that the ongoing support from Spark was vital. This implies the social value created and the help provided by these enterprises would have been much more limited without Spark.

In Table 6, two counterfactual situations are compared to what actually happened, based on the returns from the investees and the variable factors given above:

• The actual outputs from the enterprises that would have existed without Spark • An estimate of their performance would have reduced without the investment and

support from Spark and its partners • Where the investment, partner or Spark support has been reported as essential

the outputs have been reduced by 20% per each applicable element


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Table 6 - Counterfactual PositionInvestments

madeIndividuals

helpedInto

employmentInto

housingTotal as per Table 2 34 6,370 1,557 1,238Total outputs from enterprises thatwould have existed without Spark

14 1,513 485 704

Reduced value without additionalSpark input

14 1,106 360 444

This shows that without any Spark investment and support the following effects would have been felt. The numbers of people:

• helped would have been reduced by 83%, • into employment would have been reduced by 77%• into housing would have been reduced by 64%.

7) LeverageTo date the initial government investment of £2.9m has attracted leverage of around £1.3m “help in kind” and cash investment from the corporate partners and an additional £3.2m of direct third party investment. A total of £4.5m and a leverage rate on the government’s investment equal to a ratio of 2.5.

The leverage consists of two parts: strategic added value from partners and investments attracted because of the enterprise’s involvement with Spark.The strategic added value by partners is the value of the time spent helping the enterprises, based on their regular hourly costs and cash inputs. The time input was 1,213 days and the total investment value £1,335,994, including cash in both 2008 and 2009.

The Spark investment has often been the first external investment in the social enterprises. The interviews have, on several occasions, confirmed the importance of this initial investment. This has helped the enterprises to attract additional third party investment totalling £3.128K.

Table 7 - Leverage Total 2008 2009 2010Corporate Partners pro bono days 1,213 308 397 538Corporate Partners cash & in kind £1,336k £402k £439k £495kThird party investment £3,128k £1,623k £1,408k £96kTotal leverage £4,464k £2,025k £1,847k £591kGovernment investment £2,940k £740k £950k £1,250kLeverage ratio14 2.5 3.7 2.9 1.5

8) SustainabilityThe aim of Spark is to create sustainable businesses that will help to break the cycle of homelessness today and for many years into the future.

14. Leverage – Additional investment plus initial investment divided by initial investment


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Despite the worst recession in living memory, none of those businesses that have received investment have failed. This compares to the average failure rate for start-up businesses of 1 in 315 in the UK during the same period. This is as a result of careful selection by the investment panel, which is made up of representatives from our corporate, founding and government partners, combined with the ongoing business support that has made been available from 2010 (see Spark Business Model in section 2) and the legacy involvement from the corporate partners.

Increasingly the Spark partnership has been able to provide practical help and support to the enterprises whenever issues and problems have arisen.

Table 8 - Sustainability Levels

Sustainability factor Total 2008 2009 2010

Level 1 Trading profitably 9 5 4 0

Level 2 Trading at break-even 4 2 2 0

Level 3 Making progress towards break-even 19 2 6 11

Level 4 Struggling to stay in business 2 0 1 1

Level 5 Out of business 0 0 0 0

Total 34 9 13 12

For the 2010 investments it is generally too early to achieve more than a Level 3. However the review has identified one enterprise that is having problems. This enterprise is receiving support from both its corporate partner and Spark.

2009 shows a promising situation with six enterprises having achieved break-even and/or profitability, six making good progress and one struggling. Once again the struggling enterprise is being given support.

The most encouraging aspect is that of those enterprises that have been trading for between two and three years, the 2008 investments, 78% have now reached break-even or profitability.

9) Why would corporates want to be involved?Tick a few CSR boxes? Yes, but much more!

Spark currently provides a unique opportunity for organisations and their staff to find out about and become involved in Social Enterprise.

It provides professional and personal development experiences for employees and the opportunity for them to play a part in creating innovative new businesses that generate public and/or community benefit through trading activity.

Partnering and working with social enterprises to create new businesses takes employees out of their comfort zones, into new business areas, getting things done without a support network behind them and develops them as leaders.

15. The Times 100 12th edition – Business Failure section


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“Spark is a good opportunity for us to nurture up and coming talent by taking people out of their day job and throwing them in the deep end in an unfamiliar sector.”

Douglas Johnson-Poensgen, Managing Director of Global Defence and Security, BT

The partners’ employees bring a range of skills to the new businesses and quickly find out how transferable they are! They adapt and become very committed to the businesses they work with, many staying on in non-executive roles.

Not only do the UK’s top corporates have valuable expertise to share with fledgling social enterprises, but the Spark programme offers significant benefits in return.

BT has been involved since the start and Douglas Johnson-Poensgen, BT’s managing director of global defence and security, says the decision to join Spark had nothing to do with fulfilling BT’s corporate social responsibility, but “hard-nosed business reasons”.

Mr Johnson-Poensgen also points out that being involved in Spark has given BT a track record in working alongside social enterprises, which stands the company in good stead for winning public service contracts.

“The Spark challenge provided us with an excellent opportunity to support a local social enterprise and to extend the business knowledge of our Management Trainees, who offered front line support to the new venture.”

Nick Gibb Pre Construction Director, Willmott Dixon, after their first years’ involvement with Spark.

10) Impact and benefits of SparkTo date all the enterprises invested in are still in business.

A key reason given by the enterprises is the advice and practical support they have received from their corporate partners and in 2010, the Spark team. This is illustrated by comments from 2008 and 2009 investees:

John Hamblin, Chief Executive of Shekinah Mission stated “Though the financial support was of great importance the impact from the corporate partner was even greater.”

“It wasn’t just the money; it was the advice and support that really benefited us.” Simon Boyle, Chief Executive of Beyond Food Foundation

Spark has helped to change the culture of organisations, For example Steve Coles, Social


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Enterprise Development Manager says: “The impact on the Salvation Army from Spark has been highly significant. The start of PAT-testing as an independent social enterprise in the multinational organisation has ignited a cultural change. Initially it started as an internal debate about risk taking and social enterprises, and eventually the general view was changed because of PAT-testing. Today five social enterprises have been created, and the PAT-testing enterprise has helped more than 27 unemployed people into sustainable employment.”

Mike Taylor, Chief Executive of Plymouth Access to Housing which Spark has invested in twice, 2008 Plymouth Homes 4 Let and 2010 Devon Homes 4 Let, commented about Spark’s 2010 involvement: “We really appreciate not only the investment but also the support that we are having. It’s great this time round to have support from Spark, with business planning, HR, H&S and website: it’s a great package.”

This illustrates the combination on offer to the investees of start-up capital and business support really does work and help to create financial sustainability.

“Bikeworks has given me back structure in my life again, showing myself and others that you can turn your life around. It’s given me the drive that I have been looking for and the skills to carry them forward. I would recommend Bikeworks to everyone and am now working full time.”

John, Bikeworks

11) Broader impact of SparkSpark has gone international – the Australian version “The Crunch” has had investment of around £2m and is now entering its second year. Social Traders developed this model with advice, guidance and mentoring from Spark co-founder John Montague.

The British Council arranged for a delegation from Japan to meet some of the Spark partners to find out about Spark in March 2011. A reciprocal visit to Japan has been delayed because of the after affects of the tsunami. They are also investigating the possibility of creating Spark models in Thailand and Indonesia.

Action Trust is based upon the Spark concept of combining the private, public and third sectors. It supports ex-offenders and homeless people to gain training, work experience and employment, by developing social enterprises to deliver services such as cleaning, painting and grounds maintenance primarily to social landlords.

It is a partnership between The TREES Group, Action Homeless (a former applicant to Spark), Apex (a training organisation founded to support ex-offenders) and HM YOI & RC Glen Parva.

The model is working and the partnership is in active discussions with various arms of the Ministry of Justice, to develop it regionally and nationally.


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“We want more social investors and corporates to get involved in Spark – it’s a fantastic opportunity to meet your own goals at the same time as inspiring and mentoring new sustainable businesses which help people to fulfil their potential.”

Nigel Kershaw OBE Chief Executive of the Big Issue Invest and co-founder of Spark

12) ConclusionThe Spark approach of combining public sector investment, private sector expertise and third sector knowledge to develop sustainable business ideas to tackle homelessness is a success.

Through a low initial investment, significant long-term benefits have been gained and will continue to be generated. These benefits include:

• Over 6,000 vulnerably housed people helped with advice, training, employment and secure housing

• Reduction in Government expenditure

• Development of 34 sustainable social enterprises

• Private sector partners gaining genuine training and business opportunities

• Increased awareness in partner organisations and the general public of the problems facing vulnerably housed people

It provides excellent value for money with an initial investment of £2.9m over three years already creating savings and/or additional earnings of £8.9m to 31st March 2011.Because of the ongoing development of the Spark programme, future investments will have the potential to create an even greater impact.

The initial business model anticipated that every £1 of Government investment in year 1 would create social value in that year, the next year and so on, therefore generating far more than a traditional intervention programme.


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Table 9 illustrates the ongoing benefits of the Spark model.

Table 9 - Increasing Social Value 2008 2009 2010 Total

£k £k £k £k

Year to March 2009 1,047 1,797 3,040 5,884

Year to March 2010 840 1,582 2,422


Total 1,047 2,637 5,259 8,943

Government Investment 740 950 1,250 2,940

Return per £1 Invested £pp £pp £pp £pp

Year to March 2009 1.41 2.43 4.11 7.95

Year to March 2010 0.88 1.67 2.55

Year to March 2011 0.51 0.51

Total 3.04

“I was on and off heroin for 10 years before I moved to Plymouth to make a fresh start. Without Shekinah and the Steady Work programme I would probably be dead! They don’t judge you and aren’t interested in the past – just in now and the future. I was part of the Chelsea Flower Show project in 2009 and managed a team at the 2010 Show. Last year, during the actual Show itself, I was actually doing hospitality on the Key garden, talking to members of the public about homelessness – helping them to see we aren’t social lepers.”

Lucy , Shekinah Mission

Spark investment creates opportunitiesfor people to change their lives.


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Appendix 1 – Nigel’s story Nigel Hulme, a 2009 Sparklers finalist, wanted to build on the success of the local community bike outlet ‘Bikeworks’, a 2008 Spark investee, based in Tower Hamlets. He set up Squeaky Chains, which was initially intended to be a mobile bike repair service that would be able to service schools, youth clubs and community facilities such as markets and libraries.

Over the past year Squeaky Chains has had tremendous success and now operates a bike repair shop based at St Mungo’s in Southwark. It operates as a

community organisation delivering free bike maintenance workshops to vulnerable and disadvantaged members of the community. It provides training in bike maintenance to homeless and disadvantaged members of the community, helping to provide vital skills and experience for them to move on to employment.

Squeaky Chains empowers vulnerable and disadvantaged people by offering them the opportunity to learn new skills and the freedom of owning and riding a bike.


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Appendix 2 – The Spark enterprises

2008 InvestmentsAcumen Trust, Possibility Place

Acumen, based in County Durham, believes that the biggest barrier to an individual achieving their full potential is their self-belief. Possibility Place is the regional centre for “self-belief and employability” where people are supported to develop skills for life and to move into employment or self-employment.

Bikeworks

Bikeworks is a community cycle organisation based in Tower Hamlets, East London, which offers a range of cycle-based services to organisations and to the public. The services include cycle training courses, rental, repairs, recycling, travel planning, new and refurbished bike sales. This creates training, work experience and employment opportunities for homeless people.

Community Insight, Brent Homeless Users Group (BHUG)

London based BHUG empowers homeless people to help themselves and have a voice that is heard and listened to. Community Insight provides training and employment around customer research, surveys and mystery shopping to develop service users’ skills, confidence and employment opportunities.

Dine, Brighton Housing Trust

“Dine!” was created to provide a commercial catering service for events in the Brighton and Hove area. “Dine!” provides catering to a range of meetings, functions and events while providing training and employment opportunities to help people get off the streets and move into independent accommodation.

Gilead

Gilead provides a complete holistic rehabilitation programme, which deals with addiction and other personal issues and helps to re-settle vulnerable people back into society. Individuals are referred from local authorities across the country. They work on the farm, in catering and in administration for the organisation, to learn skills and sell dairy products locally.

Plymouth Homes 4 Let (PH4L), Plymouth Access to Housing (PATH)

PH4L, a social letting agency in Plymouth, believes that every person has a right to decent, affordable accommodation. It has established a network of landlords from whom it bulk-lets. This enables PH4L to assist people in housing need to access and sustain appropriate accommodation and move towards living independently.


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Salvation Army, Portable Appliance Testing (PAT)

The Salvation Army is a worldwide evangelical Christian Church and human service agency. As part of its mission to engage in a programme of practical concern for the needs of humanity it has developed a London-based social enterprise centred on portable appliance testing (PAT). This trains and employs people who have experienced homelessness and are at a point of developing skills to return to the work place.

Shekinah Trading, Shekinah Mission

Plymouth-based Shekinah provides a supported work environment for service users who have successfully completed training courses, but need a ‘stepping stone’ before holding down employment. It carries out property cleaning and maintenance service that provides work experience and employment to service users.

Stride - Nottingham

Stride assembles, recycles, renovates, sells and delivers furniture at its Nottingham workshop and retail outlets. The enterprise helps disadvantaged people improve their chances in life by offering training, work experience and employment.

2009 InvestmentsAspire Oxford – Heritage Kitchen Garden at Burford Garden Centre

Aspire’s homeless service users are offered training, work experience and employment through its Heritage Kitchen Garden. Aspire has a unique partnership with Burford who provided the land and buy all the produce.

Beyond Food Foundation

Beyond Food is a London-based social business centred on hospitality that offers training opportunities and support services to help people who have experienced homelessness. They provide a series of opportunities to engage trainees around food, in order to rebuild self-esteem and restart their lives.

Blue Sky, Groundworks

Blue Sky is a Manchester-based social enterprise that is focused on helping ex-offenders to find work. It does this by winning commercial landscape management contracts and engaging its service users to deliver the service whilst undertaking six-month employment placements.

Cycle Route

Offers flexible training to vulnerably housed young people at its workshops in South Tyneside. It provides training, work experience and employment to young people based around the sales of new and refurbished bikes, accessories and the maintenance of bikes. It also offers training to schools and community groups.


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First Fruit Warehouse

East London-based First Fruit Warehousing is committed to breaking the vicious cycle of ‘No Job No Home’ and is a social enterprise set up to provide job opportunities and training provision for people who are unemployed, homeless and /or with a history of drug and alcohol abuse. The particular business invested in by Spark is centred on recycling hard plastics, taking wastes from local councils, pelletising it and selling it for re-use.

Home by MerseyStride

‘Home’ is a furniture and white goods recycling social enterprise, buying ex-catalogue furniture to train and develop people who are homeless or long-term unemployed in the making and repairing of flat pack and catalogue furniture.

House of St Barnabas in Soho, London

The House of St Barnabas delivers a unique Life Skills Programme for homeless and vulnerable people through the imaginative enterprising use of its beautiful Grade 1 listed building, chapel and garden in the heart of Soho. Through its partnership with Quintessentially Soho it provides work experience and employment opportunities for its service users.

Paint It, Framework Housing Association

Nottingham-based Paint It is a painting and decorating social enterprise that offers homeless people an opportunity to attain vocational skills and experience of working life, in order to provide them with a gateway into permanent work or to build their own business. The Paint It workshop offers pre-employment training packages including vocational skills training, personal development and employability.

Refurnish Devon, Devon Furniture Forum

Refurnish Devon provides support and training to homeless individuals to enable them to increase their sense of self-esteem and well being whilst helping other people on low income to obtain low cost furniture and appliances.

Spark Fabrications & Framing, Two Saints Spark Fabrications and Framing is based in Southampton and delivers bespoke steel fabrications and framing services for domestic and commercial markets. The workshop provides training, work experience and employment opportunities to Two Saints service users, helping them to move towards independent living.

Wigan Housing Solutions

Wigan Housing Solutions is a social lettings agency that provides help and support to service users looking for accommodation in which they will be able to sustain residency. They offer training workshops to empower their clients so they understand the responsibilities of tenancy and feel supported going forward to find employment and stability in their lives.


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Winter Willow, Winter Comfort

Winter Willow is located in Cambridgeshire and is based on the cultivation, management and harvest of willow. It operates by designing, producing, marketing and retailing willow craft products. These include bicycle baskets, garden sculpture and eco-coffins. Winter Willow provides opportunities for occupation, training and employment for those with experience of homelessness or who are vulnerably housed.

2010 InvestmentsCommunity Insight, Brent Homeless Users Group (BHUG)

Spark reinvested in London-based BHUG to enable them to expand to meet the increasing opportunities and demand generated by their Community Insight research business (see 2008 for details). This has already led to them being able to win work from national organisations.

Devon Homes 4 Let (DH4L), Plymouth Access to Housing (PATH)

Two years ago Spark invested in Plymouth Homes 4 Let, a social lettings agency (see 2008 for details) which is now financially self-sustaining. Following tenancy support work with Teignbridge and Torbay district councils PATH identified the opportunity to replicate the model in south Devon.

Good Soil / Bonterre, Top Barn Trust

Worcester-based Top Barn’s vision is to see people become healthy and independent adults through land-based and ‘outdoor’ activities. They work with different at-risk groups, from excluded school pupils through to substance abusers, homeless people and people who have a mental illness. They use the farm-based work to enable homeless people and those at risk of homelessness to grow skills and confidence, and move towards independence and unprotected employment.

Hope Enterprises, Northampton Hope Centre

Recycling garden tools is the first venture of Hope Enterprises which is using business as the next step in the social rehabilitation of their clients by providing training, work experience and employment opportunities, which will lead to independent living.

Jericho Wood Recycling, Jericho Foundation

The Jericho Foundation, based in Birmingham, “supports individuals to overcome barriers, and become fulfilled, skilled and employed”. It already operates social enterprises providing Print and Promotion, Design and Marketing, Construction, Catering, Cleaning and Landscaping services. Jericho Wood Recycling creates upmarket wood products from recycled canal lock gates to provide further work opportunities to client groups.


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Lydia’s House

“Restoring dignity, producing quality” is the motto of Newcastle-based Lydia’s House which provides training, with support, for women with complex needs, including ex-offenders, those recovering from addiction problems, self-harm and abuse, in the refurbishment, production and sales of antique furniture and textiles, and associated interior design crafts. Meadview, LCT Homelink

LCT Homelink provides a wide variety of services to homeless people in Littlehampton, East Sussex aimed at helping them access and sustain quality rented accommodation. To provide further training, work experience and employment opportunities for disadvantaged groups they have restored a derelict former nursery and transformed it into a production nursery and training centre.

reCYCLEd, Julian House

Julian House is a leading provider of services to single homeless men and women in Bath and north east Somerset. They are developing social enterprises as a means of providing employment and training to their clients. reCYCLEd is the first and only business collecting, refurbishing and selling second-hand bikes in Bath and its environs. It also carries out bike maintenance and repairs. It provides training, work experience and employment to its service users.

ReVive, St Mungo’s Community Housing Association Ltd

St Mungo’s is the largest provider of services to homeless people in London. They provide 1,500 bed spaces, delivery of street outreach contracts, support and treatment services, employment and training programmes and criminal justice work. The idea came from a client who suggested that he and other clients could paint their hostel rather than bring in outside contractors. ReVive was set up in response to that suggestion. It will provide work experience and employment to clients who had completed painting and decorating training courses at St Mungo’s.

Renew Maintenance, YMCA Derbyshire YMCA Derbyshire has changed its approach to tackling the issues of homelessness from focusing on housing and support to enterprise and employment. This re-focus has been based on the premise that employment, and the journey towards reaching employment provides a purpose and structure to people’s lives. This has proved to offer an effective way of enabling people to regain the skills, confidence and coping strategies to achieve and sustain independence. Renew, a property maintenance company, exemplifies this approach to breaking the cycle of homelessness.

Wheelie Great Bike Shop, BCHA

Wheelie Great Bike Shop recycles, repairs, services, hires and sells bikes from their Bournemouth town centre shop. It provides training, work experience and employment opportunities to BCHA service users.


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SPARKLERS 2009Squeaky Chains, Nigel Hulme

Bike repair shop and bike maintenance training in Southwark, London

Suitcase Media, Jimmy Connelly

Website development and design services based in Southwark, London

SPARKLERS 2010 ARW Decorators, Andy Wand

Painting and decorating services in the Leicester area

Martial Art Fitness, Hatem AlyElyazzat Aly

Provision of martial arts, karate and physical training to groups and individuals in London

New Force, Paul Coombes

Painting, decorating and garden maintenance services in the Littlehampton area of Sussex

Appendix 3 - About the authorVivienne Froggatt

• Vivienne is currently undertaking six month charitable secondment with the TREES Group from BT Global Services where she works as a project manager

• She has 33 years of experience in the telecommunications industry where she started as a drawing office assistant, then became a business installation field engineer and eventually progressed to project managing the delivery of high value complex communications solutions to major businesses.

Supported and guided by

Dr. Mark C Graham

• PhD Economics, BA Economics• Director, Corporate Finance, PricewaterhouseCoopers• Mark is highly experienced in advising, working with, conducting research for

and evaluation of a range of organisations across the statutory, voluntary and community and private sectors

Researcher

Nela Wroblewski

• BA (Hons) Business• Nela has spent 9 years with the TREES Group and been involved with Spark from

the beginning• She knew the organisations, the personalities and how to get the information from

them!

October 2011

For more information on the Spark Challenge, contact us:

Spark Challenge165 Glenfield RoadLeicesterLE3 6DP

Telephone: 0116 299 4466Website: www.sparkchallenge.org.ukEmail: [email protected]

Any use of the contents of this publication requires written permission from The TREES Group at the above address.

Viking Report 2

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Transcript of Viking Report 2