A new model for social enterprise?

Pioneering a new model for social enterprise across Northern Ireland, Social Enterprise of the Year for 2018 AEL’s chief executive David Hunter talks to David Whelan about his ambition to see the model adopted further.

In 2010, Acceptable Enterprise Ltd (AEL), formed as a social enterprise in 1998, took stock of their impact and considered the risks economic turbulence could have upon their ambition of fulfilling their social mission. Three key decisions flowed out from those frank discussions. The first was a desire to move the outfit from an industrial estate on the outskirts of Larne to a more central location, improving accessibility and awareness. The second was a goal to be more self-sufficient, building up a range of businesses to help mitigate against the economic risks posed by the financial crisis. The third was the desire to fully deliver on their social mission to work in partnership with others to provide a centre of excellence, offering opportunities for disadvantaged individuals.

AEL is a social enterprise that aims to create training and employment opportunities for individuals traditionally excluded from the labour market, especially young adults with learning difficulties. Their social mission is facilitated by a business model that currently consists of a broad mix of enterprises which vary from the manufacturing of bottled water; online retailing on Amazon and eBay; sub-contract work; and the delivery of horticultural and allotment services, as well as the management of an on-site café.

In 2018, AEL enlisted the support of Queen’s University Belfast to better understand the outcomes as well as the impact of their own social enterprise activity, facilitating the culmination of detailed statistics which AEL could use to present their partnership-working approach as a model across Northern Ireland.

David Hunter explains that the basis of their model lies in the decision to relocate to the Centre Point building in Larne. At the time the building was operated by the Northern Regional College (NRC) but was in danger of closure after the NRC suffered a major drop in enrolment numbers. After submitting a tender, AEL took on a master lease for the building located in Larne’s Pound Street but continues to share the building’s classrooms with the NRC, whilst also bringing on board the Northern Health Trust to rent some of the building.

“At the time the approach was unique with a social enterprise taking the lead and two statutory bodies falling in behind. To enjoy that cross-sectoral collaboration was a new concept for Northern Ireland and represented exactly what we were trying to achieve in terms of driving efficiencies for the public sector through partnerships and social enterprise,” says Hunter.

To date the approach has been a success. AEL has grown its number of employees from 13 in 2012 to 47 currently, with annual turnover during that timeframe increasing from £272,000 to £1,126,000. It also boasts of its high levels of self-generated income, with almost 70 per cent of their funding stream coming from commercial activity.

However, it is the outcomes behind these figures that Hunter is keen to stress. “Our model is set on partnership working across the sectors. We’re working at the minute, in the context of a Social Value Act being progressed, to highlight to the public sector, the biggest procurers of services and goods in Northern Ireland, that through a partnership scheme, people from the social and private sector can work together to deliver these goods and services to the public sector with wide-ranging benefits.”

The QUB report found that in 2017 alone, AEL’s training and employment activity reduced the total value of benefits and public sector services accessed by its employees from £444,863 to £80,246, an overall saving across the organisation of £364,617. The figures were reflected across four benefit categories including housing; health; training and employment; and social care. While this figure is significant, it is even more so when added to the value created by the gross annual salaries of AEL employees for that year (£552,882), releasing additional monetary benefits for the economy in the form of Income Tax, National Insurance contributions and expenditure in the local economy for goods and services.

“We have made our achievements with no set down structure or roadmap and hopefully through that work we can serve as an example of how progress can be made through a social partnership scheme.”

“The report and the statistics within the report equip us to highlight to those making the procurement decisions that through our model the greater benefits that can be realised are seismic. Through our model of social enterprise, which relies on self-income generation and the promotion of a mixed ability workforce, we are creating both social and economic benefits in equal measure. It therefore represents an increasingly effective model which statutory government agencies could consider as a viable partner to help deliver care in community-style services.

However, Hunter rejects that progress in this area is not possible in the absence of a functioning Assembly, which has prolonged the introduction of a much sought after Social Value Act for Northern Ireland.

“We’re inhibited by a non-sitting Executive,” he admits, “but I think there are potentially other ways around this, such as lifting current legislation existing in Scotland and England. We would call on the Secretary of State to assess the option which contains no friction. I don’t think it’s a good enough reason not to make progress because there is no Executive. Our model proves that. We have made our achievements with no set down structure or roadmap and hopefully through that work we can serve as an example of how progress can be made through a social partnership scheme.”

Turning to those businesses that have generated the income for AEL to deliver on their social agenda, Hunter highlights the range of training programmes facilitating a safe and supportive environment in which trainees can develop their social, educational and employability skills. These include:

• Transition Programme: a job coaching programme offering school pupils aged 16-25 preparation to transition into adulthood, progress to the world of work and be active citizens in their communities;
• Hands on Training Programme: enabling trainees and volunteers to progress onto paid employment, long-term volunteering and/or further education, whilst potentially gaining qualifications;
• Day Opportunities: Enabling individuals diagnosed with a learning disability through Northern Health and Social Trust, to volunteer at AEL, introducing them to work, whilst boosting skill and confidence to progress; and
• Life Programme: A person-centred support and action plan setting realistic goals to promote their physical, mental and social health to enhance their quality of life.

AEL’s catalogue of businesses are impressive and activities range from packaging and assembly through to sample making and subcontract work for some of Northern Ireland’s top companies, as well as community allotments which serve their on-site café, Lunchbox.

However, there are two businesses that stand out as prime examples of AEL’s sound understanding of emerging markets to develop commercial success. The first is Candyrush, an online mail order service that provides party supplies and stationary to customers across the globe. From 2016 to 2017 the turnover of Candyrush increased by 54 per cent to £325,193, sustaining five jobs and providing training opportunities for AEL’s training programmes.

The second is Clearer, a project established in 2015, providing bottled water, which generated sales of over £75,000 in its first year. Packaging for the water, which is bottled at source in Magheramore, County Antrim contains a unique trace code to track the product and a biography of the individual staff member responsible for bottling it. The brand has successfully negotiated supply chain relationships with the likes of Lough Erne resort in Fermanagh, the Fitzwilliam in Belfast, Shu, Ox, Wine & Brine, Titanic Belfast, Henderson Food Group and even into London shops.

“The growth of the business aids us in our ambition to persuade the public and private sectors to see the value of our model and to see social enterprise as an investible opportunity.”

In 2018, Clearer invested in a new automatic carbonator, significantly increasing output and opening up greater potential to expand its customer base. Hunter explains that further negotiations are underway that could see Clearer sold in vending machines in a number of notable locations in Northern Ireland.

“It’s exciting times,” Hunter says, “but we also have to ensure that we don’t overstretch ourselves and that’s where we see the value in additional partnerships. The growth of the business aids us in our ambition to persuade the public and private sectors to see the value of our model and to see social enterprise as an investible opportunity.”

Looking to the future, Hunter states that Brexit uncertainty is a notable challenge across all sectors. However, he is confident that given AEL’s levels of self-sufficiency, the company does not share the same level of concern as those other social enterprises in Northern Ireland heavily dependent on grant funding.

In the short-term, Hunter envisages continued growth of AEL’s online business, increasing the number of products and with that, recognising opportunities to grow employment numbers. Adding: “Clearer is a shining star in terms of a social enterprise and we see it as an effective tool to get our message across around understanding the value of social enterprise.

“Looking more long-term, following the creation of 35 jobs in the past five years, I see no reason why we can’t strive to become an employer of 100 people, focussing on our local community and enabling those people with low expectations of employment to get involved.”

Reflecting on the journey of AEL to date, Hunter states: “The past five years have been my most enjoyable in business. As a team I know we have changed people’s lives and we aim to continue to do so.”