A report published today based on data from the RBS SE100 web platform reveals the social enterprises that are delivering leisure services and becoming serious competitors to privately run businesses.
The RBS SE100 Index is a listing of social ventures, ranked and scored according to their growth and social impact. 303 (9%) of the 3503 enterprises listed on SE100.net deliver leisure sports, arts and culture services. The size of these organisations varies greatly, on the whole the organisations in this sector are small – the mean turnover is £6m compared to £17m on the main Index. The top 10 largest organisations in this sector are dominated by social enterprises running leisure centres, all of which turnover seven figures or more. The data points to a solidly performing group of social ventures (often referred to as leisure trusts), which are not only providing sporting opportunities to the UK’s most vulnerable people but are also challenging the private sector health and fitness chains for the lucrative business of young, affluent gym-goers. In this era of cuts to local government subsidies, social enterprises have risen to the challenge of running leisure centres and are increasingly operating a ‘Robin Hood’ model of cross subsidy – making money from young affluent gym goers in order to fund services for disadvantaged users. But to attract this market, the service provided has to be top notch, and social enterprises have upped their game to provide this. John Comiskey, chief executive of Edinburgh Leisure, which runs around 30 venues for the local authority said:
With such aggressive competition in the marketplace we have had to pull ourselves away from the old council gym mentality and understand what customers are wanting. We work hard at being innovative and are advanced as anyone else in the products we are offering.
These social enterprises claim that their USP is to offer great facilities in all areas of the country – whether affluent or disadvantaged – which are available to everyone in the community. On top of this they reinvest their surpluses to help older people keep active, nurture the talent of the gold medal-winners of the future and reach out to those people in the UK who are struggling with diabetes, obesity and other health problems associated with inactive lifestyles. This is a model that the government is keen on backing – it cuts local authority costs as well as persuading the nation off its sofas. Minister for sport Helen Grant said: “Top class sporting facilities are vital so that people have a good experience and keep participating for life. Leisure social enterprises are helping to improve the facility stock across the country and offering affordable, accessible sport for all.” Alasdair Brown, chief executive of Kirkless Active Leisure (KAL) which runs 14 leisure facilities in West Yorkshire said that his organisation ‘Works on the model of taking the best of the public sector and the best of the private sector’.
We have high standards of health and safety, quality and a focus on giving something back to the local area – plus a business-like approach.’ Kirklees has ploughed funding into creating slick new gyms and now offers high quality gym membership from £15 a month – attracting a wider range of customers, and providing a competitive offer compared with the mid-range private sector gym operators in the area.
Steve Ward, Associate Director at GLL said:
Research has shown us that generally when they are looking for a gym, people will be looking for price, location and quality first. Being a social enterprise acts as an extra bonus for us. If someone is weighing up against another gym, I want our social enterprise status to be shining through, as it might just be the thing that encourages them to join us rather than another place.”
Ian Walters, MD Business Banking at RBS, said:
Enterprise is the life blood of the UK economy and, at RBS, we believe that new businesses lead to job growth and wealth creation. The social enterprise sector is playing an increasingly important part and their approach to business is bringing many benefits, transforming communities, creating jobs for people excluded from mainstream employment and helping to drive a healthy, vibrant economy. We support the RBS SE100 Index because, like any other part of the economy, it is important to gather as much market intelligence as possible.