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Proposal to Develop a Social Firm in Norwich that will offer

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					                                                                Cabinet
                                                                6 March 2006
                                                                Item No 19


 Proposal to Develop a Social Firm in Norwich that will offer Employment
                   to People with Learning Difficulties

                        Report by the Director of Adult Social Services

                        Summary
                        This report represents the proposal to set up a
                        social firm as a viable, self-sustaining business,
                        employing people with learning difficulties. The
                        business will sell wholefood and environmentally
                        sound, fair-trade products. The business model
                        will be developed under a franchise that is based
                        on a tried and tested successful business
                        currently    operating    in    Cambridge     and
                        Northampton.



1           Introduction
1.1         The progress report for the Employment Plan for People with Learning Difficulties,
            ‘Just the Job’, was presented to the former Social Services Review Panel on 14th
            March 2005 and to Cabinet on the 11th April 2005. It was reported that work was
            being done to develop social firms in Norfolk, and links had been made with City
            College, Norwich, and agencies involved with developing social firms. We have
            since developed links with the Economic Development team in Norfolk County
            Council, Economic Development at Norwich City Council and Norfolk and Waveney
            Enterprise Services, which have worked with us to look at development of this
            proposal. An outline proposal was presented to Adult Social Services Review Panel
            on the 16th January 2006 to request support in principle to take this proposal
            forward

1.2         This proposal to set up a social firm offers a much needed opportunity for people
            with learning difficulties to gain employment in a supportive work environment. A
            social firm is a financially viable and self-sustaining business which employs people
            with disabilities, has a social purpose and invests profits in the business by
            employing more people or rewarding the employees. At least 55% of income must
            be generated by trade. ‘It is a business that supports, rather than a project that
            trades’. It would support the achievement of national Valuing People objectives for
            employment, specific targets agreed in the Employment Plan to develop social
            enterprise and social firms in Norfolk and implementation of the agreed Action Plan
            to modernise day services.

1.3         The franchise for the business and ongoing support would be provided by Social
            Firms UK, which is the national support structure for Social Firm development in the
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            UK. It is registered as a charity and is a Company Limited by Guarantee. Social
            Firms UK aims to create employment opportunities for disabled people through the
            development and support of Social Firms.


2           The Proposal - ‘Wholefood Planet’: A Social Firm for Norwich and Norfolk

2.1         Overall Aim

2.2         To build a business that promotes and provides employment for people with
            learning difficulties. In line with Government policy, it would seek to take people
            with learning difficulties off benefits and into paid employment. Once established,
            the business would be self-financing and profits would be used to develop the
            business or employ more people with learning difficulties. Key objectives are:

            1. To develop the business into a model social firm which could be replicated
            throughout the region working with Social Firms Eastern Region. The business
            would be pro-active in supporting and encouraging other social firms by offering
            presentations, visits and disseminating information.
             2. To develop training packages for people with learning difficulties and be an
            example of best practice to other employers.
             3. To give people with learning difficulties the opportunity to be part of, and
            contribute to, the local economy.


3           The Business

3.1         Wholefood Planet is modelled on ‘Daily Bread’, which is a wholefood retail business
            that has successfully run for 25 years as a self- financing business in Northampton
            employing 30 staff, the majority of whom have learning difficulties, and 13 years in
            Cambridge, employing 30 staff. Daily Bread has recently won a national social
            enterprise award for enterprising solutions. The business would be located in an
            out-of-city centre location that has parking, a delivery and storage area, a packing
            area and a café, in addition to the shop (recommended 3-4,000 square feet). The
            shop would sell wholefoods, which would be bought in bulk and packed on the
            premises, thereby offering a greater number of jobs in different aspects of the
            business. The shop would use environmentally friendly and locally produced
            products. The business would make links with the local community and education,
            offering visits, information and cookery demonstrations linking with local schools. It
            would be ideal if the business could be located in a regeneration area because it
            could offer employment to the local community and may be able to work with local
            community groups and schools to encourage healthy eating.

3.2         As part of the licensed package, Social Firms UK have written a detailed manual
            based on the Cambridge branch of Daily Bread which gives all the information
            needed to set up Wholefood Planet, including details of suppliers of equipment,
            furnishings, products and accessories. Social Firms Eastern Region will, as part of
            the license, offer support with writing the business plan, training staff and
            maintaining the business. This includes monitoring sales, trends and customer
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            service. The regional co-ordinator of Social Firms Eastern Region has a wealth of
            first hand experience of Daily Bread.

3.3         It is important to the Wholefood Planet brand and Social Firms UK that this new
            business franchise is successful as the life and continued growth of this brand will
            be dependent on it. This will be one of the first Wholefood Planets developed under
            license in the whole of the UK. It is hoped that a chain of stores will develop
            nationwide and this national growth and development will be influenced by the
            success of Wholefood Planet, Norwich.

3.4         The Business Plan has estimated that the start-up and working capital needed for
            the business is £172,000, although it would be possible to start up with £110,000 as
            delay in payment for initial stock can be negotiated. Through Social Firms UK 25%
            of this initial funding can be applied for through the Esmee Fairburn Foundation.
            We plan to secure the remaining 75% contribution through support from City
            College in the form of legal, marketing, PR, training and advice services and
            through the Norfolk Learning Difficulties Service through seconding staff to develop
            the business in the first three years. In addition, we will bid for money in the form of
            grants and apply for loans if needed. City College, Norwich has recently secured
            funding to purchase the initial license and annual rent for the first year on premises.

3.5         The business would be set-up as a Community Interest Company (CIC), which is a
            company limited by shares. Community Interest Companies were formally launched
            by the Secretary of Trade and Industry in July 2005, for establishing social
            enterprises. The advantage of this business being a Community Interest Company
            are that:-

                  •   It allows access to a wide range of sources of funding.
                  •   The structure safeguards the future of the business through asset lock
                      provision grants and monitoring of stated community benefit, which ensure
                      that the Community Interest Company is established for community purposes
                      and the assets and profits are dedicated to these purposes.
                  •   It requires the business to be managed as an independent sustainable
                      venture, owning its future.

3.6         It would be difficult to set the business up as a charity as regulations for charities
            mean they are not able to trade. The business must trade and generate a surplus in
            order to be sustainable, grow and meet its community benefits. It is also important
            that people with learning difficulties are enabled to make a valuable contribution to
            the local economy through successful business, and to be recognised as a viable
            paid workforce in the community. The Community Interest Company model will
            enable employees to have a share and a say in the business and its development
            once it is set up.

3.7         In order to get the business up and running, it is proposed that two unpaid founding
            Directors will be nominated by Norfolk County Council and City College, Norwich
            who will oversee the business in the initial years. When the business is established
            directors will be sought from a wider group of people. Three founding Directors, two
            employees and two shareholders will hold the initial nominal £1.00 shares. The
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            Director nominated by Norfolk County Council might be a Member and this is
            currently being explored. A third founding Director would ideally be sought from the
            business community.

3.8         Operational staff will consist of a manager with experience of running a retail
            establishment, staff who may be seconded from Adult Social Services who have
            experience of working with people with learning difficulties and setting up training
            programmes and people with learning difficulties recruited through Adult Social
            Services, City College and Job Centre Plus (who also have linked with this
            development).

3.9         All staff will be trained in health and safety, customer care, food hygiene and trading
            standards (weights and measures). As part of Norwich City College’s contribution
            to the business, we will have access to training through the business and hotel
            schools at City College.

3.10        In addition, Wholefood Planet Norwich will be developing its own training and
            information packages, which will be presented throughout the region. These will
            take two forms - one will be information based about setting up the business and it
            is intended that this will be delivered to social services, colleges, local groups and
            day services. The second will be much more based on training and supporting
            people with learning difficulties into work and will offer a role model for others.
            Wholefood Planet will be proactive in promoting the employment of people with
            learning difficulties with businesses across the region, offering support and
            guidance and the opportunity to see employment and training in action. The
            business will actively encourage sustainable business development focusing on
            employment in a supportive environment, also encouraging a cultural change, which
            will be needed if more people with learning difficulties are to come off benefits and
            get into work.

3.11        The business will be marketed and promoted by the City College Marketing and PR
            department and this will be through local papers, radio and television.         This
            approach will help to secure sponsorship and support from local businesses. We
            will draw up and follow a communication plan, which will be regionally focused,
            marketing throughout the region to raise awareness and build a customer base.
            Marketing and promotion of the business will be initiated with a business reception
            to introduce Wholefood Planet Norwich to the business community offering an
            opportunity for other businesses to support and contribute to this development.

3.12        It is envisaged that Wholefood Planet Norwich could be in business during 2006.


4           Summary

4.1         Wholefood Planet would:
            • Offer employment and training to people with learning difficulties.
            • Act as a model social firm which could be replicated throughout Norwich and
              Norfolk through shared intelligence.
            • Be pro-active in supporting employers to employ people with learning difficulties.
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            •     Take people off benefits and into employment.
            •     Develop social inclusion.
            •     Support local businesses by selling and using locally produced products.
            •     Contribute to economic development in Norfolk.
            •     Be environmentally sound, promote healthy eating and living, use and sell
                  ethically sourced and fair-trade products.


5           Risk

5.1         The Economic Development Unit supports the proposal in principle and will provide
            support for the project in the future, and has identified a number of issues that need
            to be taken on board as the project progresses.             In particular, the on-going
            assurance of financial viability, that sound business principles are adopted and
            maintained and that the potential impact on the existing market is assessed. It is
            also important to ensure that the project provides a link for employees to move into
            mainstream employment and acts as an exemplar to other employers to encourage
            more opportunities to be created elsewhere for people with learning difficulties.

5.2         A risk assessment has been carried out and the risk assessment team in Norfolk
            County Council has provided the following statement relating to the risk
            implications.
            “The overall level of risk posed to the County Council through the development of
            Wholefood Planet Norwich is assessed as low. This is in the main because
            Wholefood Planet Norwich will be set up as a financially viable and self-sustaining
            business separate from the County Council”.

5.3         In addition, the Project Manager for the Employment Plan has worked with a
            number of internal and external departments and organisations - Legal Services,
            Adult Social Services’ finance section. Social Firms UK, an independent consultant,
            and an external legal service specialising in Social Firms to ensure that any risks
            are identified and managed.

5.4         The project does, however, provide very clear opportunities and benefits for the
            County Council and in particular for people with learning difficulties.


6           Norfolk County Council Involvement

6.1         The County Council commitment will be to nominate a director (see para 3.7) and
            to hold a nominal £1.00 share, so that the company Wholefood Planet Norwich can
            be registered. The County Council would also commit to the secondment of staff
            from existing resources within the learning difficulties service for a three year period
            and commitment of Project Manager time to set up the business. The liability of the
            County Council will be limited to the nominal £1.00 share in the company.


7           Development Process

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7.1         A Full Business Plan has been developed, which includes the market research that
            has been carried out to look at national and local trends, competition and local
            market opportunity, all of which positively supports the viability of the proposed
            business. The business plan is available to Members only, as the intelligence is
            restricted under the terms of the license and is commercially sensitive.

7.2         In order to proceed to the next stage, Directors need to be nominated so that the
            Company can be registered. Agreement of the Articles of Memorandum and
            Community Interest Statement will be part of the process of registering the
            company.

7.3         A suitable property will need to be identified and a lease agreement entered into by
            the Directors on behalf of the company. There needs to be sign-up to the final
            license agreement between the Directors of Wholefood Planet Norwich and Social
            Firms U.K. The business will then be developed ready for trading including the
            recruitment of staff. Once the business is up and running successfully, the County
            Council and City College will end their involvement, which is expected to be after 3
            years. It is expected that the founding Directors will be replaced by non-
            shareholding directors, with an interest in the company and its benefits, and
            possess an appropriate business acumen.


8           Financial Implications

8.1         The financial implication will be managed within current resources in the
            secondment of a member of staff.

8.2         The liability will be limited to the amount invested in shares by shareholders. The
            share value is £1.

8.3         The monetary value of the secondment of a Day Service Officer is as follows:-

            £24,968 per annum for a period of 3 years

            3 x £24,968 gives a total input of £74,904 this is inclusive of on costs but not
            inclusive of any wage increase that may be agreed during the period of
            secondment.


9           Section 17, Crime and Disorder Act, Implications

9.1          This project is a key step in implementing the Employment Plan for people with
             learning difficulties. It would be likely to have a positive impact on crime and
             disorder reduction, as many more people with learning difficulties who are currently
             on benefits would be meaningfully occupied with an increased income. This is likely
             to reduce the risk of their becoming involved in crime and disorder, either as a
             victim or perpetrator, by increasing their self-esteem and offering a safe, supervised
             day-time environment.


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10          Alternatives Options

10.1        There are no alternatives that have been considered. The option of not doing this
            would not lend itself to meeting the targets and outcomes of the Employment Plan.


11          Conclusions

11.1        This would be an excellent opportunity to continue to develop a range of
            employment options for people with learning difficulties. It would also offer the
            opportunity for people with learning difficulties to move on from college or day
            services into work, which was identified in the Employment Plan as what people
            wanted. It would also be a good opportunity to develop a social firm as a
            sustainable business that would provide a valuable service to the community.

11.2        The setting up and success of the business could be used to encourage further
            development of social firms that would benefit not only Norfolk, but also the region.


12          Recommendations

12.1        Members are requested to:
              • agree to support the proposal to enable the business of Wholefood Planet
                 Norwich to be developed.
              • agree the commitment of existing resources for the purpose of developing
                 the proposed business.
              • agree to Norfolk County Council nominating a founding Director and to take
                 a £1 nominal share in the Company.
              • agree the continued involvement of officers in the setting up of the proposed
                 business
              • note the liabilities and risks to the Council in agreeing the development of
                 the proposed business


            Subject to the approval of Cabinet to the above recommendations, further reports
12.2
            will be taken to the Adult Social Services Review Panel as the business progresses.

            Officer Contacts:
            Amanda Reynolds, Assistant Director, Norfolk Learning Difficulties Service. Tel
            01603 223958

            Marcia Derbyshire, Project Manager Employment, Norfolk Learning Difficulties
            Service. Tel 01603 481139




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                  If you need this report in large print, audio, Braille,
                  alternative format or in a different language please
                  contact Keith Cogdell, Tel: 01603 223157, Minicom:
                  01603 223242, and we will do our best to help.




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Description: Proposal to Develop a Social Firm in Norwich that will offer