BLOG: Enterprising Approaches to Employment

In this month’s P4P blog, Pauline Graham, CEO of Social Firms Scotland, discusses the Scottish Government’s commitment to halving the disability employment gap.  Over the next few years Work Integration Social Enterprises in particular will play their part in creating more employment opportunities for people who have barriers to work.  However, it will take a step change in other parts of the economy – across the business community, and across the public sector, if we are to close the employment gap to allow all our citizens the right to work.

Closing the Disability Employment Gap

Across a broad range of policy areas, the Scottish Government supports, as far as possible, measures to give people who are recognised as disabled or disadvantaged, the opportunity to enter the labour market. However, it is recognised that more needs to be done to remove barriers to work for disabled people and other groups by improving their prospects of securing and sustaining employment.

Under the broad banner of Work Integration Social Enterprises (WISEs) – Social Firms and Supported Businesses are recognised as already playing an important role in providing employment for disabled people and those disadvantaged in the labour market – but more could be achieved through a greater visibility and understanding of their impact and through supporting their commercial and social aims.

The Scale of the Challenge

The Scottish Government has set an ambitious target of closing the disability employment gap and published A Fairer Scotland for Disabled People: Employment Action Plan. In this the Scottish Government outlines what actions it will take to meet the ambition to at least halve the disability employment gap in Scotland by 2038. It is worth noting that the employment rate of disabled people in Scotland currently stands at 45.4%, compared to 81.2% for non-disabled people. This represents a gap of 35.8 percentage points and reinforces the scale of the challenge. The statistics for people with a learning disability or enduring mental ill health are even starker.

The plan sets out a number of key actions to be taken across Health, Education, Social Justice and Procurement based on identified priorities of disabled people, the support needs of employers and labour market changes.  In terms of Public Procurement, the Action Plan commits to:

  • Extending conditionality for public sector grants and procurement to cover transparency around the numbers of disabled people employed;
  • The Scottish Government and public sector should make greater use of the levers available to them through the significant level of procurement and City Region/Regional Growth Deals, to secure more job outcomes for disabled people from public investment;
  • In relation to procurement and social enterprise support, develop sustainable procurement tools and guidance to help buyers across the public sector in Scotland identify and pursue equality outcomes in procurement.
  • Highlight the opportunity and need to use public procurement in Scotland to achieve employment of disabled people.
  • Continue to promote awareness of disability employment as a ministerial priority to contractors across the procurement landscape, building on work undertaken in 2018 by EHRC, Inclusion Scotland and Scottish Government Ministers.
  • Work with City Regions and Regional Growth Deal areas to ensure that they use all available levers to increase employment rates for disabled people by: addressing barriers to employment (e.g. the lack of accessible public transport); and supporting disabled people, from those in school to older workers, in Deal regions to develop the necessary skills to meet the current and future needs of the labour market.
  • Respond to and implement recommendations, where agreed, of the short life working group set up to consider how supported businesses and social enterprises could contribute to increasing employment rates for disabled people.

A New Public Social Partnership to Support Employers

As part of its Action Plan, the Scottish Government is to invest up to £1 million to establish a new Public Social Partnership (PSP) to develop, test and implement solutions to barriers employers face in hiring and retaining disabled people.

The Scottish Government should be commended on this investment – recognising that no one agency or sector can meet the scale of the challenge around disability employment. Our shared ambition for this PSP are:

  • That by the end of the PSP’s second year, it will have identified, developed and piloted a project (or projects) that help employers: attract, recruit, and retain disabled people. 
  • That the PSP is seen as an opportunity for interested, capable organisations to develop and implement these projects, drawing on their own networks and expertise, and utilising funding and assistance from the Scottish Government. 
  • In terms of leading by example, the Scottish Government is to set a target for the recruitment of disabled people in its own workforce and has recently publish the Scottish Government’s Recruitment and Retention Plan.

The Role of Work Integration Social Enterprises (WISEs)

Scotland’s Social Enterprise Strategy (2016-2026) recognises that social enterprises are making a particular contribution to inclusive growth, a fairer Scotland and improving the lives of Scotland’s citizens, including disabled people. It acknowledges the key role that social enterprises play in tackling inequalities; stating that the sector has ‘found ways to successfully reintegrate people with disabilities’ and highlighting the ability of social enterprise to ‘unlock the full potential of people furthest from the labour market’.

The Scottish Government makes the following commitment: “We will step-up our support to Work Integration Social Enterprises. This includes finding creative ways to enable Social Firms to take on employees with higher support needs and to enable an expanded base of Supported Businesses to flourish commercially and sustain employment for disadvantaged and disabled people.”

For clarity, a WISE is a type of social enterprise that has a specific focus on helping people with a disability or disadvantage move into employment. WISEs support unemployed people who have barriers back into society by combining economic activities, social empowerment and training. WISEs are ‘social’ in that they focus on the integration of people disadvantaged in the labour market, and they are ‘enterprises’ because they create products and services for markets through entrepreneurial activity.  While some WISEs act as temporary ‘springboards’ into permanent employment elsewhere, others offer work experience, training places and importantly, jobs, for people who would otherwise find it difficult to gain and retain work. Social Firms Scotland recently published a briefing paper which highlights some case studies to illustrate the sector’s contribution.

Supported Businesses and Reserved Contracts

Social Firms Scotland welcomed the expanded definition of Supported Business under the revised legislation of Section 21 of the Public Contracts Scotland Regulations (2015) and EU Directive 2014/24/EU. Changes to regulations provide an opportunity for market development in Scotland. As such a solution is required that could act to: offset risks that buyers may be perceive in being able to accurately consider whether a requirement could legitimately be fulfilled through a reserved contract; and remove the burden from eligible businesses to repeatedly submit appropriate evidence to buyers.

To that end, the Scottish Government’s commissioning of a research study of this evolving market resulted in a new supported business listing on the Ready for Business Register, currently being managed under P4P. SFS with support from Scottish Government and P4P will undertake to review the register of supported businesses to give further assurance to buyers that those on it can provide the

necessary evidence that they meet the criteria. The definition of those businesses who can benefit from supported business status and therefore access reserved contracts is in two parts:

Firstly, a supported business’ primary aim is the social and professional integration of disabled or disadvantaged persons. Secondly, at least 30% of the employees of those businesses should be disabled or disadvantaged. In order to be considered a supported business, you must meet both parts of the definition.

The Scottish Government has also put in place a national Commodities Reserved for Supported Business Framework which enables public bodies to reserve contracts for a variety of goods and services across 4 Lots. Lot 1: Furniture and associated products; Lot 2: Document management Services; Lot 3: Personal protective equipment (PPE) and uniforms; Lot 4: Signage.

Whilst the framework might be regarded as limited in scope, the advantage for buyers is that due diligence has been completed on those businesses on it –  so procurement can be assured that they meet the supported business test and that reserving contracts is legal.

What more can we do for buyers and suppliers?

As noted earlier, changes to the definition of Supported Business and in procurement regulations provide an opportunity for market development in Scotland but a number of challenges remain on the buyer and supplier sides and so further effort, actions and resources are required in this area to realise greater benefits.

Buyer challenges

Some public sector bodies report uncertainty over which organisations ‘qualify’ as supported businesses, given the change in definition from 50% disabled employees to 30% ‘disadvantaged’ employees.  Furthermore, from both the public sector and private sector, perceptions over quality, capability and price of goods and services supplied remain in some quarters – suggesting that there is still some way to go to overcome resistance to the use of supported businesses – and reserved contracts.

  • It is recognised that we need a stronger collective voice to promote and campaign on behalf of WISEs – including social firms and supported businesses in Scotland – and to exert greater policy influence at DWP, UK Government level and across the Scottish Government and wider public and private sector. 
  • We would like to work with others to undertake an engagement programme involving buyers across the public sector, including the centres of procurement expertise and WISEs to raise the profile of their commercial interests and their social impact.
  • This will, of course, need to be coupled with efforts to raise the profile of the supported business market and make the process of identifying the market easier for public bodies, along with continued access for supported businesses to an eco-system of social enterprise support under the SE Strategy and Action Plan. 
  • Buyers should be encouraging their prime contractors and indeed wider supply chain participants to offer more employment opportunities to people with disabilities and health issues. This can be done in many cases legitimately under the provisions of the Procurement Reform (Scotland) Act 2014 – and of course there is nothing to stop private sector firms doing more too.
  • Contracting authorities can also choose (out with the supported business framework currently in place), to reserve contracts for organisations providing supported employment opportunities to disabled people so that only supported businesses can bid for the work.
  • Social Firms Scotland will continue to work closely with P4P to ensure that public bodies are aware of the supported business register and the wider social enterprise community.
  • SFS is represented on the Scottish Government’s Supported Business Advisory Group, and the Procurement Suppliers’ Group and we will continue to work closely with the Scottish Government’s Procurement Policy colleagues to support the promotion of the supply side as well as support public bodies to do more in their engagement with the supported business and wider social enterprise market.

Finally, public bodies are keen to do business with more supported businesses and social firms and recognise the benefits of doing so.  Indeed, APUC (the centre for procurement expertise for Further and Higher Education) has now identified a supported business champion in every institution across its sector. This is a good start!

About Social Firms Scotland

SFS is the national support agency for Social Firms and Work Integration Social Enterprises. We are a membership organisation and have been representing the interests of our members for 19 years. SFS also facilitates a wider Employability Social Enterprise Network, bringing together over 200 social enterprises who deliver employability outcomes. SFS has a delivery role to support our members, a policy role to represent them and a leadership role to champion what they do. Our values reflect our objective to tackle inequalities in society and within the labour market.