Taking tough decisions

(This is the text of my ‘Bottom Line’ column that appeared in the Brighton Argus on 16th August 2011).

In my working life I am involved in two very different organisations which share a common objective: the provision of specialist services for those in the greatest need. But in spite of the common objective, there are fundamental differences in expectations of my role in the two organisations

One is the charity, Brighton Housing Trust (BHT). The name itself is misleading. We don’t just operate in Brighton (and Hove), but also in Eastbourne, Hastings, St. Leonards and other districts in East Sussex. We do a lot more than housing, including legal advice and representation, mental health services, services for those with alcohol and other drug addiction, work and learning activities, etc.

The other organisation is BHT Enterprises Ltd., a profit making company, operated on a commercial basis. BHT IT Solutions and BHT Design are just two of the businesses within the company. The profits generated by BHT Enterprises are gift aided to the charity, BHT, to support its charitable work, for example, at First Base Day Centre.

First Base provides services to some of the most vulnerable men and women in Brighton and Hove. For example, we provide early morning sessions for those who have slept out. We ensure that the causes of their homelessness are addressed, and help them to secure and maintain accommodation.

The Centre operates at a loss of about £100,000 per annum, but because of the high “Mission-fit”, the charity chooses to support the work of First Base from our own funds and donations we receive from many very generous supporters.

Being a charity doesn’t stop us making difficult decisions, such as changing terms and conditions of employment for staff three or so years ago. And we have recently had to make a very difficult decision in BHT Enterprises.

It is not a charity and takes a commercial view on its activities. One of its business streams, the highly respected Blue Rocket PR, staffed by four very talented PR specialists, has in recent times struggled in the challenging economic environment in which it operates.

BHT Enterprises Ltd. has no room for sentiment, for considerations such as “Mission-fit”. With my fellow Directors we felt that the outlook for Blue Rocket PR was not positive, in spite of the expertise of its staff, and we have made the decision to shut the business.

Of course on a personal level I am sad to lose Blue Rocket PR from our wider ‘family’, but as a commercial enterprise we could not wait to see if its prospects would improve nor could we subsidise its business activities from charitable funds.

It takes different mindsets to run charitable and commercial organisations. But in each, tough decisions have to be made if we are to remain true to our purpose.

Social Enterprises are an essential component for the survival of charities

If charities must are to survive this period of austerity, they must control their costs and find ways of generating new income.

At BHT we have controlled our costs by, controversially, reducing salaries and changing terms and conditions of employment. We have also increased turnover by acquiring new services (such as work and learning schemes) and the organic growth of existing activities.  But most excitingly, we have developed a number of social enterprises which are designed to generate new income that is not dependent on local and national government or charitable giving.

Developing profitable social enterprises is not ‘an optional extra’ for charities but an essential part of surviving cuts in public spending and the reduction in charitable giving, while at the same time they benefit clients, the community and charities alike.

Clients benefit from learning and training opportunities.  Social enterprises provide meaningful routes from training, through work experience, and into employment or further training.

The community benefits because of increased employment, reduced homelessness and rough sleeping because those in training and employment have increasing access to accommodation.  There is a reduction in social exclusion, dependency on benefits, substance misuse, anti-social behaviour and crime.

And organisations, particularly charities, are able to generate additional income, compete for completely new contacts and business, and it raises profile.

By delivering social enterprises we send out a strong message that we are taking a positive stand regarding our future funding, it shows we are prepared to innovate, and it reaffirms that we are an interesting organisation and one worth doing business with.

Brighton Housing Trust has established a trading subsidiary, BHT Enterprises Ltd.  Together BHT and BHTE Ltd operate a number of social enterprises, including:

• BHT IT Solutions which provides a comprehensive IT infrastructure to other charities through the creative and cost effective use of Cloud and thin-client technology;
• BHT Training provides 40 different training courses to people and organisations throughout Sussex working in the social care and related sector;
• Blue Rocket PR delivers a diverse range of national PR and helps our clients develop and grow. Specialist areas of PR include charity, social enterprise, health, property, finance and environmental campaigns. Third sector experience includes RNIB, Help the Aged, Social Firms UK, SignHealth, Social Enterprise London, and Enterprise UK.
• Dine! A catering company that caters for public and private events including weddings, banquets, meetings and conferences;
• Flavour: A jam and marmalade production company selling its produce at farmers markets and other specialist outlets.

Our social enterprises are good news for Brighton’s economy.  Every pound that is spent in our social enterprises is a pound that remains in the local economy, creating local jobs which, in turn, pay salaries that are in turn spent in the local economy. On every level, and from every view point, social enterprise makes sense.

(This article was first published in the Brighton Argus Business Section’s ‘The Bottom Line’ on 5th October 2010)

I hardly notice our IT – surely the sign of a great service, and the costs are right down

About to go into a meeting with BHT’s own IT company, BHT IT Solutions, that provides IT services not only to BHT itself but to other organisations.  Amongst the issues being reported today is the savings in electricity being made by the technology used.  For BHT alone, the savings are £4,700 per annum because of the ‘thin client’ technology used.  Also, there are further savings because of the ‘virtualisation’ of servers.  Apparently, rather that running 10 servers, we now run just one ‘virtual server’ (if I have understood the technology properly!). 

The cost to BHT of our IT provision have been driven down by our two IT guys, Matt Andrews and James Clark.  This is not just the savings in electricity, but in setting up and supporting workstations.  Reliability is up and what was, in 2003 before the arrival of Matt and James, a very poor service, is now one that I hardly notice, surely the sign of great IT!

For more information, see the IT section on the BHT Enterprises website.

Reflecting on successes and the need to keep moving forward

Last night was the regular meeting of the BHT Board of Management.  A regular item that I report on is developments.  Last night it was particularly easy to report given that in the three months since I last reported, various initiatives that my colleagues and I have been working on for up to three years have come to fruition. We have:

• developed new services, for example, in the private rented sector, in work and learning, and in profitable social enterprise, thereby attracting income from new sources;
• secured new contracts and expanded our service base;
• strengthened user involvement at all levels of the organisation;
• established a strong base in Hastings having set up a training project, Finding Futures, delivered housing advice outreach, and acquired Hastings Community Housing Association; and
• established BHT Enterprises Ltd., and acquired PR company Blue Rocket and its sister company Green Rocket.

Very often we can’t see the wood for the trees because we are so involved in the day to day management of the organisation.  We may put out a press release or post something on our website, but before you know it, we have moved on to the next thing.

But having to report on a quarterly basis to the Board allows us to take stock of what has been achieved knowing that every service development will help us to tackle homelessness, create opportunities and promote change.

But we are not complacent.  We need to look, as always, at what is next.  What next for the organisation, for projects, for service users? Any achievement is a milestone, not a destination.

Reaction to BHT’s purchase of Blue Rocket and Green Rocket

I have been delighted with the response we have received following our announcement that BHT Enterprises Ltd, the social enterprise arm of BHT, has bought the PR company, Blue Rocket, and its sister company, Green Rocket.

The media reaction, too, has been positive (although one outlet presented the story as BHT being criticised).  Most people have said it is an interesting thing to have done, some have said it is slightly odd (!), but almost everyone has passed on congratulations and best wishes.

Having worked very closely with staff at Blue Rocket this week in responding to a friendly barrage of press enquiries, I have been so impressed by the calm professionalism, the competence, and the integrity that they have shown.  It doesn’t come as a surprise, but doing due diligence on a company is one thing.  Working alongside them is another, especially when it is the reputation of your organisation at stake. 

Earlier this evening I was speaking to a journalist at 3rd Sector magazine about the purchase of Blue and Green Rocket, and the acquisition of Hastings Community Housing Association.  I heard myself reflecting that having worked for BHT for almost 25 years, I have rarely been more excited about the future.  While I am aware that colleagues in other organisations are feeling ‘under the cosh’, there is so much positive activity within BHT.  It isn’t just Blue and Green Rocket, or HCHA, although they are special, it is the day to day work going on by dedicated and skilled staff.

Sitting here in my office at 6 o’clock in the evening, I can reflect on what BHT is and where we have come from.  There are so many people who have, over the past 41 years, made such important contributions to the work of BHT.  But what is almost impossible to put into words is the difference BHT, its services, staff and volunteers have made to the lives of tens of thousands of people.  I feel truly humbled by what we do and the difference BHT makes.

So ends a blog post that feels a bit self-indulgent, even congratulatory.  Forgive me!

Why I am proud that BHT Enterprises Ltd has bought a PR company

Today BHT, or at least its social enterprise subsidiary, BHT Enterprises Ltd., has bought local PR agency Blue Rocket and its sister agency, Green Rocket.  The purpose of the setting up BHT Enterprises Ltd. (it was incorporated just before Christmas) was to allow us to undertake activities not permitted under our charitable objects, but designed to make some money.  The profits of BHT Enterprises Ltd. are to be gift aided to BHT to support our charitable work, such as running First Base Day Centre that runs at a loss of over £100k each year.

I am proud that BHT has had the vision to set up BHT Enterprises Ltd. given how BHT and our services users will benefit from all profits generated.

Reaction to the announcement has been mixed.  Some have said that it is an imaginative and bold step to take.  Others have questioned why we have done this, given that over the last year we have reduced salaries within BHT.

For example, the Brighton Argus carried the headline “Charity under fire after PR buyout” and reported that “Unions (sic) hit out at purchase following job cuts”.

There have been no “job cuts” at BHT. Not a single job was lost, nor was there any service reduction when we took action to reduce our costs last year. Nor are pensions being cut. There was a temporary reduction in the employer’s contribution last year, but as a result of the savings achieved the full pension contribution has been reinstated from April.

As The Argus itself reported, on the very same day, the delayed impact of the recession on charities presents difficult financial challenges and many are being forced to cut jobs. BHT is one of the few organisations avoiding redundancies by making reasonable pay cuts and taking positive action to increase revenue for years to come.

Charities across the UK recognise that we cannot solely rely on government contracts at a time when public spending is decreasing. The acquisitions of Hastings Community Housing Association (HCHA), Blue Rocket and Green Rocket are part of BHT’s drive to diversify our revenue and become more self-sufficient.

These purchases have been made after 6 months of consultation and due diligence. Blue Rocket and Green Rocket are much-respected profitable businesses while HCHA is a well established provider of housing and specialist support services for young people in Hastings.

Blue Rocket has been successfully trading for more than six years and unlike most companies its committed team has won more lucrative contracts in the recession due to competitive pricing and good value services. The purchase price for the two companies was well below 1% of BHT’s £9.5 million annual turnover and the charity’s cash is protected by creating the new legal entity, BHT Enterprises Ltd. 

The acquisition of HCHA gives BHT £4 million of new assets and additional expertise through its work with young people.

These purchases will pay for themselves over and over again.

These developments strengthen our ability to deliver our Mission of combating homelessness, creating opportunities and promoting change amongst the most marginalised and disadvantaged members of society.  I am proud of what we have done.