Ashes to ashes: experience from the UK’s Phoenix fund

Peter Ramsden, Lisbon 3rd November 2008

Peter Ramsden Director of Inclusion

Phoenix Development Fund

The Development Fund is designed to encourage innovative ideas to promote and support enterprise in disadvantaged areas and in groups currently under-represented in terms of business ownership. Its purpose is to encourage experimentation, the evaluation of new ideas and the identification and spread of best practice

95 projects selected to last 3 years of which 25 had extra 2 years

Evaluation: Terms of reference and methodology

• Fresh thinking: to what extent has the Development Fund encouraged fresh thinking about stimulating enterprise and business support to people in disadvantaged areas and in under-represented groups;

• Effectiveness: How effective have specific project type approaches been? Training, outreach, incubation, enterprise champions, etc;

• Reaching target groups: To what extent have projects to help particular sections of the community been successful? (e.g. disadvantaged areas, women, Black and Ethnic Minority, people with disabilities etc);

• Mainstreaming: To what extent has the Fund helped to engage mainstream providers in the support of entrepreneurs in disadvantaged groups and communities.

• Capacity: To what extent has DF funding helped to build capacity within the organisations that are running projects?

• Methodology: 3 surveys, two questionnaires of 95 projects, telephone survey of 800 beneficiary enterprises, 24 case studies based on field visits

Key questions

• What have we learnt about outreach using specialist services?

• What are the drawbacks of the specialist model?

• Can it be sustained?• What should the support system look like?

BME and migrant facts

• 80% of Pakistani and Bangladeshi have incomes < 50% of national average

• 80% of new migrants working on hourly rates close to minimum wage

• 50% of all Muslims in the UK of working age are ‘inactive’ especially women (27% active)

BME business characteristics• 250,000 BME businesses in 2005 (out of 4.3million)• £15 billion in turnover• Younger - 20% of BME businesses have been trading less than

3 years (compared to 14%)• More based in services (90% compared to 70%)• Located in the poor inner city : 40% located in poorest 15% of

electoral wards (25%) • High level of aspiring and actual entrepreneurs (Other Asian

and Black 3 times the Total entrepreneurship activity)• High self employment for some groups 19% of Bangladeshis

and Pakistanis, 18% of Chinese, 15% of Indians• Low for others – african caribbeans 7% (12% white) and Asian

women especially Pakistani and Bangladeshi (<1%)

Reasons for low take up of business support by BME groups

• Cultural and language differences• Lack of trust and confidence• Lack of awareness of services (and these

services do not exist back home)• Inexperience in engaging support• Not linked to other advice needs (e.g. on

immigration, welfare rights)

(David Smallbone)

Faith in business: Piggy backing

• An outreach technique using pastors in Baptist churches• Focusing on raising levels of enterprise among African

caribbeans• Developing faith based business clubs and a loan fund • Uses church congregations and pastors as the route into the

community• Potential to link to 3000 black majority churches and 300,000

adherents in the UK

East end micro credit consortium: Hub and spoke outreach

• Micro finance delivered through a hub and spoke model - Finance hub - Environment trust - homeless families unit - outreach- Account 3 - outreach

- Quaker social action (streetcred) outreach• Peer group methodology (groups of 5 like Grameen bank)• High deal flow after 18 months – 150 loans with Very

hard to reach target groups - Bangladeshi and Somali women in London’s East End

• High social but low economic impact • Now continuing through Fair Finance and EERT

IMRC working with refugees and ethnic minorities

• Refugees are, in general, determined and enterprising individuals, often with professional and commercial skills.

• Even those with business backgrounds need help adapting to the culture of British business and finding their feet

• clients need confidence building and emotional support. advisors should show sensitivity. Ideally they should also use counselling and listening techniques.

• Refugees are often dealing with other major life challenges - such as personal and family life disruption - related to their immigration.

• IMRC builds a listening and learning relationship, and understanding their unique set of difficulties and dilemmas.

• Standard support packages are inappropriate.• advisers need to be culturally appropriate and sensitive -

particularly to norms of politeness, respect and hospitality.

Targeting works

• 80% of BME and migrant clients were reached by 15% of the projects (similar findings on women entrepreneurs)

• Most of these projects were specifically focused on BME communities

• Generalist projects, even when working in inner city areas did not achieve high proportions of BME clients although some achieved high numbers (e.g. Prince’s Trust)

Fresh thinking in outreach

• Piggy backing locally based community organisations to access hard to reach communities- using the capacity of a locally based community organisation to reach the group (faith in business)

• Hub and spoke approaches (East End Micro Credit Consortium, Ideaspark)

• Building community capacity to deliver business support (Ideaspark but also Equal project Reflex/ ACBBA)

New ways of working with clients

• Working in the clients community, culture and language (Nazir associates, Ideaspark, IMRC)

• Working with them from inside their community• Providing support to the client to sort out non business

problems (most projects)• Finding new ways of supporting clients – e.g.

mutual support through peer, EEMC), mentors (Business enterprise centre)

What does Phoenix tell us about business support for migrants?

• Specialist approaches are needed to reach significant numbers of particular groups

• There are trade offs between economic and social impact • Mainstream business support services are not used by disadvantaged

groups and often ignore disadvantaged areas• People often need intense help that goes beyond the business plan and

includes confidence building, coaching, childcare etc• Self employment is very important for groups that are most

discriminated against in the labour market • For many people it is a stepping stone to employment• Diversity is very diverse (along group lines and gender lines)

The problem of specialist support• Specialist business support for BME and migrants has

developed as a separate system • few linkages to the mainstream• Not financially sustainable• Dependent on alternative funding streams that are

threatened (Equal, Phoenix ) or hard to access (ESF/FSE, ERDF/FEDER)

• Patchwork of provision – geographically and for groups• Confusing to the customer

Key questions

• What have we learnt about outreach using specialist services?

• What are the drawbacks of the specialist model?

• Can it be sustained?• What should the support system look like?

THEMES no specific target group

I found the administrative processes for setting up a business straightforward and quick

2,8

I was exposed to enterprise ideas while at school 1,0

Entrepreneurs like me are well presented in the media 1,4 I have attended events and trade fairs targeted at start ups 1,2 There are role models to encourage people like me to go into enterprise

1,8

AVERAGE SCORE

1,6

The advice system is easy to access and to get around 4,0 The business support available is friendly and answers my needs

4,0

I have had access to a mentor 4,0 Specialised training and materials are available which meets my needs

2,6

It is possible for me to obtain recognition and accreditation for training and experience which reflects my real skills

1,6

there are networking opportunities for start ups like ourselves 1,4

There are affordable business premises with easy to enter conditions (short leases, etc)

1,0

AVERAGE SCORE

2,7

All entrepreneurs are able to obtain high quality advice for a period after start up

4,0

Entrepreneurs like us can easily access high quality training in the areas required for business expansion (ITC, marketing, financial management…)

3,7

It is easy to join mainstream business networks 3,0 There are sufficient premises of an affordable nature to allow for business growth

1,0

Public sector contracts are accessible to entrepreneurs like ourselves

1,0

AVERAGE SCORE

2,5

Banks provide a wide range of financial products to entrepreneurs like us

2,0

It is easy for all to open a current based bank account 2,7 Public grants help cover some of the most important costs of setting up a business and are easy to access.

1,0

It is easy to get support for managing the financial aspects of the business

3,3

AVERAGE SCORE

2,3

ACCESS TO APPROPRIATE

FINANCE

CREATING THE CULTURE FOR

ENTRE-PRENEURSHIP

START UP SUPPORT

CONSOLIDATION AND

GROWTH

Some lessons

• Groups are useful for analysis but bad for planning policy delivery

• Diversity is itself very diverse

Resources

• Peterramsden2@gmail.com• Case studies on http://wikipreneurship.eu

and Leading lights • 2 Major evaluation reports by Peter Ramsden

on the BERR website• Key learning points: Investing in success

reports

Some common characteristics of community based business support

• Empathetic • Client focused• Reaches out • Tranformational and developmental of the person and the

business• Empowering• Intensive (and often intense)• Open ended not rationed• Safe and trusted (not an arm of the state)• Free at the point of delivery• Recognises the diversity of diversity• Accessible and usually located in the community • Not just a business plan or a referral