Overview
The Community Transport Association (CTA) estimates that there are more than 800 community transport operators (CTOs) serving rural areas in the UK and, of these, many are enterprise based in the sense that over half of their total income is derived from charges for services or the delivery of contracts, as opposed to receipts of grants and donations
The Plunkett Foundation and the CTA believe that there is considerable potential for rural community transport operators to increase their financial sustainability, and thereby better achieve their social goals, by adopting a more enterprise-based focus. Plunkett have helped some operators to move in this direction through its Rural Revival campaign and its management of Defra’s Enterprise for Inclusion-1 programme, which provided grant and advisory support packages to voluntary organisations adopting social enterprise approaches.
The Department for Transport’s Strategy and Action Plan, 'Working in Partnership with the Voluntary and Community Sector' (VCS), identified the need for voluntary and community sector transport schemes to move away from 'short-term and precipice funding' arrangements. It also expressed the intention in its action plan to investigate ways of increasing the involvement of the VCS in delivering the Department’s commitments. The increasing use of enterprise-based approaches may be regarded as one important way of achieving these objectives. In response, therefore, the three bodies came together to undertake a systematic investigation to identify and promote enterprise-based models which work best for rural community transport.
The aim of the project was to identify the most effective enterprise-based models of rural community transport and to assess how best to promote these in a systematic manner to the sector. Specific objectives were to:
- assess the approximate number of rural community transport operators which currently use social enterprise approaches or could be described as social enterprises;
- categorise the social enterprise approaches used to define a number of identifiable models or approaches;
- consider the potential for community transport operators which do not use social enterprise approaches to do so, looking at the potential benefits of and barriers to this approach;
- develop a programme to increase the use of enterprise-based approaches in community transport to be implemented jointly by key sector stakeholders.
The project approach comprised the following elements:
- A survey of rural community transport operators to identify their key characteristics and funding models. This resulted in a sample from which an assessment of the characteristics of the sector as a whole could be made.
- Selection of a broadly representative sample of operators for closer examination, involving a researcher spending a day on location with each group. The examination supplemented quantitative data with the qualitative opinions of key participants of each operator.
- Analysis of the findings and preparation of a typology of operators, characteristics and models which enables the sector as a whole to be 'mapped' according to the extent to which they use social enterprise approaches.
- Using the typology to assess the potential benefits and barriers to the wider adoption of social enterprise approaches in the rural community transport sector.
Preparation of an outline development programme to stimulate the use of enterprise-based approaches within the rural community transport sector as a result of consultation with sector stakeholders.
Funding
Results
The qualitative and quantitative research has shown evidence of the extent to which rural Community Transport Organisations (CTOs) currently use social enterprise approaches, their attitudes towards the further use of such approaches and the barriers to them doing so. Combining the findings and analysis of the two previous sections of the report, the main conclusions which have emerged from the research may be summarised as follows:
- Much of the sector already uses social enterprise approaches, at least in part, whether or not they describe them as such. Almost all rural CTOs charge some of their beneficiaries fares to cover part of their costs and many conduct part of their services in what may be described as contractual relationships for public bodies, normally local authorities.
- Whether or not the sector uses social enterprise approaches or not, most of the sector is extremely enterprising, in its ability to juggle income from a variety of sources, both in the form of grant and trading income, to sustain and grow individual rural CTOs.
- It is unlikely that any of the rural CTOs surveyed, either in the quantitative or qualitative research, could be described as 'pure' social enterprises, in that their viability almost always depends partly on grants, donations or the use of volunteers. The extent to which individual rural CTOs act as voluntary organisations or social enterprises is a question of degree and attitude, and not a black and white division.
- The sector is somewhat unique in the manner in which it combines the traditional characteristics of voluntary organisations with the use of enterprise-based approaches. Most rural CTOs are registered charities and make extensive use of volunteer labour, but almost all of the sector charges its target beneficiaries for the services provided. This ability to draw on the best of the voluntary sector and the social enterprise sector may be regarded as a key strength, rather than a source of confusion. Because of this, it is concluded that it is inappropriate to talk of successful 'social enterprise models' which can simply be replicated in their current form in other areas or by other operators. Rather, there are many examples of good (or effective) practice which have worked well for some operators and which could benefit others in the sector within a different organisational environment. It is, therefore, good practice in the use of enterprise-based approaches that can be replicated, rather than an
Technical Implications
Whilst technological advances should be able to have a major impact on the use of social enterprise approaches, for example by better optimising routes to match customer demand, the research concludes that this is not a critical success factor to adopting an enterprise orientation. These solutions are more likely to be introduced after more conventional trading approaches have been pursued.
Policy implications
In order to understand what parts of good practice can be used in different situations by different rural CTOs, it is beneficial to divide them into different types of organisations which offer different types of services or pursue different approaches to the way in which they deliver their services and maintain financial viability. This approach is described in the form of a typology of CTOs in relation to the use of enterprise-based approaches.
Many of the skills required to make better use of enterprise-based approaches are readily transferable, either from rural CTOs which already have them, or from the wider business sector. These include the ability to set prices at levels which optimise income without affecting demand, the use of loyalty/membership schemes to strengthen the bonds between the organisation and its regular customers and the professional management of volunteers.