A lasting legacy of the Games

In 2012 the Olympics will get under way in east London - what role can social enterprises play in ensuring the local community is left with ongoing engagement and jobs? Saba Salman reports on a recent debate
Aquatics centre and Olympic stadium
The Olympic Stadium is taking shape but, after 2012, will east London enjoy lasting regeneration or become 'a ghetto with a beautiful park in the middle'? Photograph: Anthony Charlton/ODA/PA

With his recent declaration that the NHS will be transformed into the "largest social enterprise sector in the world", health secretary Andrew Lansley left no doubt as to the rising profile and burgeoning role of the social enterprise movement.

There are some 62,000 social enterprises in the UK, according to government estimates, with a combined turnover of £24bn, working in almost every industry from health to transport to IT. Trading as they do with social and environmental aims, placing profit back into the business instead of into shareholders' hands, social enterprises will be more necessary than ever given the squeeze on public spending and the need to reform public services.

But it's not just public services that social enterprises might transform. The 2012 Olympic and Paralympic Games could link the aims of social enterprise to one of the biggest sporting and cultural events in the world. As the Olympic Park, Village and other venues take shape in east London, there is huge potential to boost regeneration, employment, skills and training, plus the chance to create a lasting environmental, social, physical and economic legacy after the Games.

As businesses that recruit locally and are rooted in the community, social enterprises can offer sustainable outcomes after the Olympic athletes, staff and spectators leave.

A recent roundtable debate, hosted by the Guardian and sponsored by Social Enterprise London, a leading social enterprise development agency with support from the Cabinet Office, focused on the role social enterprise can play in creating such a legacy.

The discussion explored the opportunities and challenges for the public, private and third sectors in creating long-term community benefit and asked what is needed for everyone, including society's most marginalised citizens, to feel the positive impact of the Games.

To encourage frank discussion, the event, which also included a discussion of the general benefits of the social enterprise movement, was held under the Chatham House rule, allowing comments to be reported without attribution.

Local engagement

One speaker argued that the very nature of a social enterprise business ("a company including true local engagement") means that the public sector must engage the movement if the Olympic legacy is to be fulfilled. Another said: "If we want to keep investment in London then companies that have a commitment to reinvest their profit into their social mission are an effective way of achieving just that."

However, as one speaker warned, a major barrier to social enterprise playing a greater role in the Olympic legacy is the image of it as the "second-class citizen to real business". Another participant described the incorrect perception that social enterprises are "not quite proper businesses" because they are part of the third sector. Others suggested the Olympics presented an opportunity to shatter that myth and illustrate how business can be conducted in a socially responsible way.

As another speaker stressed, social enterprises certainly reflect the coalition government's big society concept to encourage civic engagement, with 2012 acting as "a catalyst for mass participation". It was suggested that, because the movement advocates social responsibility, it might help the public to grasp the concept of greater civic engagement.

However, there was also scepticism that big society was "extremely vague and extremely amorphous". There was criticism of political rhetoric around civic engagement and frustration that politicians and policy makers spend more time on theory than action, "writing documents and not building a thing".

There was agreement that the effect of social enterprise will be to leave a "soft legacy" - including creating community engagement and jobs, for example. One participant spoke of the impact on the long-term unemployed: "If you want to engage the local community in east London the easiest way is to get a social enterprise in, because they will recruit from the local community. That person will go back into their community and say 'this is what I'm doing' and other people will want to be involved."

As for increasing the involvement of social enterprise in the Olympics, it was felt that the best way in was through partnership with the private sector. The concern, however, was that the inclusion of social enterprises could be a tokenistic gesture to illustrate the socially responsible credentials of the private firm.

One speaker added: "There is a new opportunity in partnership with private sector companies but not on the basis that we will do the 'touchy feely' bit at the end and they walk off with all the big contracts." It was suggested that the formation of partnerships between private sector organisations and social enterprises, when bidding for 2012 contracts, could be beneficial to both parties.

Another participant warned, however, that although a consortium approach was the way forward, "the leadership that is required to build that consortium of commercial, social and third sector is the challenge".

Private-sector scepticism

From a private-sector perspective, there was scepticism about what partnership with a soci al enterprise could actually bring to the table and a feeling that the movement was viewed as a risk. O ne speaker doubted the "language of social enterprise" would make a compelling case for investment in a corporate boardroom. There were questions raised about such organisations "being entirely relevant", having "a business case" or "adding value".

One subject, however, that united both social enterprise organisations and their private-sector counterparts was the bureaucratic, complicated and costly procurement process for public-sector contracts. Many felt that procurement methods actively dissuade companies - regardless of their sector - from bidding for contracts.

"They send us a 100-page tender document and expect us to complete it in two weeks - that's totally unrealistic," said one speaker. " There was unanimous criticism from both private sector and social enterprise organisations that much of the information required for contracts was "not relevant to services being delivered" but was requested simply because, historically, it had always been asked for.

It was suggested that if conditions relating to social impact were included in contracts it would boost the chances for social enterprise when bidding for work. For example, a clause in a government IT contract could require bidders to employ local people. However, this creates problems from a purchasing perspective, another speaker added, as social impact clauses would be "measurable outputs" and result in a costly administrative burden.

Another challenge in winning contracts is that the public sector spending squeeze is leading local authorities towards bulk-buying services to achieve economies of scale. A group of neighbouring councils, for example, might jointly purchase nursing home care in their region from a single provider. Smaller firms might not have the capacity to compete.

It was noted, however, that the web-based tendering system CompeteFor is designed to increase the chances for smaller companies to bid for Olympic work and encourage larger firms to sub contract to their smaller counterparts.

Longer term, there were concerns about focus moving off legacy issues after 2012. However, participants were reminded about plans for an urban development corporation led by the London mayor that would take control of developing the Olympic Park after the Games. That should help safeguard against east London being left with what one speaker warned might be "a ghetto with a beautiful park in the middle of it".

Generally, the roundtable debate suggested that social enterprise has incredible potential to deliver a sustainable post-Olympics legacy, but that this role might be threatened by preconceptions about the movement, procurement problems and a public sector spending squeeze.

As one speaker concluded, with the eyes of the world on London 2012, shutting social enterprise out of legacy issues "will be an enormous missed opportunity - and a globally public one at that".

In Focus
There are opportunities and challenges for the private, public and third sectors in creating a lasting legacy after the 2012 Olympic Games, and the social enterprise movement could play a significant role in this. The community-led, values-driven nature of social enterprise can help even the most disadvantaged in society overcome barriers to education, employment and social interaction.

At the table
Mike Mulvey
Chief executive, London Business Network

Philip Cox

Director, Olympics, Thames Gateway and regeneration, Communities and Local Government

Allison Ogden-Newton

Chief executive, Social Enterprise London

Dai Powell
Chief executive, HCT Group

John Charles
Managing director, Catering2Order

Sarah Ebanja

Former deputy CEO, London Development Agency

Mark Sesnan

Managing director, GLL (Greenwich Leisure Ltd)

Richard Sumray
Chairman, London 2012 Forum

Tony Gale
Director of commercial operations, infrastructure, GE Corporate

Lord Andrew Mawson
Board member, Olympic Park Legacy Company

Guy Nicholson

Cabinet member for regeneration and 2012 Olympic Games, London borough of Hackney

Neil Crockett
Managing director, public sector, Cisco

Sophi Tranchell
Managing director, Divine Chocolate

Lord Nat Wei
Government advisor on big society

Jane Dudman (chair)
Editor, Guardian Public

• The Guardian roundtable in association with Social Enterprise London
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