Scaling HCT Group Dai Powell Chief Executive, HCT Group 26 September 2012

Welcome ■ A journey from: –a small Community Transport charity… –to a large scale social enterprise with national ambitions ■ Hundredfold growth –from a turnover of £202k in 1993 –to a turnover of £28.6m in 2011/12 –700+ employees and a fleet of 370 vehicles ■ Increase in social impact in line with our growth ■ What did we do? ■ What did we learn? ■ What’s next?

1982 – 1993: A community transport charity ■ Founded in 1982 as Hackney Community Transport “To deliver social change through enterprise, empowerment and partnership” ■ Minibuses for community groups ■ Door to door transport ■ Mainly voluntary, grant funded ■ We learned that: –Access has an amazing impact on our communities –Services designed by their service users really work –Effective organisations work with all their stakeholders –Relying on one source of grant funding is too risky…

1993 – 2001: Learning to trade ■ Funding environment in 1993 very challenging ■ Threats to core grant ■ Community need undiminished ■ Competitive contracts seen as the answer ■ 1993 our first victory – hospital transport ■ Other wins, including funding for plus bus services ■ Improvements in our transport knowledge ■ By 2001, a sustainable business model

Our enterprise model

Our social model

Learning to trade: what we learnt ■ One key idea: “To be a sustainable social enterprise, we must also be an effective enterprise” h ■ Culture change from traditional charity thinking: “It’s good to make a profit” ■ Values can not excuse poor quality or high prices: “Get really good at buses” ■ The better we did commercially, the more we could do for our social mission “Commercial success: community impact”

2001 – present day: A social enterprise ■ In 2001, we won our first London red bus route… ■ We take on the big private sector operators in the marketplace and beat them ■ Have worked with a total of 19 Authorities… …we are still working with all 19 ■ 98% of revenue comes from contracts ■ Profits reinvested back into the core mission ■ 20% average growth per year

Turnover growth

Our development: national growth

Social impact ■ Profits reinvested in the communities where they are earned ■ Transport for community groups –deeply discounted accessible minibus hire –66,000 passenger trips in 11/12 ■ Individual transport –services for disadvantaged individuals –230,000 passenger trips in 2011/12 ■ Learning centres –a wide variety of programmes aimed at job outcomes –76 job outcomes (11/12) ■ Economic impact –an operation in 7 of the 15 most deprived boroughs

The future: Challenges and opportunities ■ We aim to double in size every 5 years ■ Expansion focussed on areas of deprivation ■ Our strategy is to meet challenges with innovation: –Funding challenges: the Social Loan –Barriers to organic growth: acquire private sector operators –‘Bus company’ culture: Social Enterprise Champions –Understanding new areas: JVs, partnerships and mergers –Public spending cuts: service-user led design –Community focus vs national scope: RACs –Poor procurement practices: write the book

Any questions?