frc social report 2001/02

S o c i a l R e p o r t 2 0 0 1 - 2 0 0 2

Proving it?

Acknowledgements We would like to thank the following people for their help and guidance in the preparation of these social accounts:

• All of our stakeholders who completed questionnaires • Sarah Brennan, PhD Student, Liverpool University • Paul Jones, School of Law and Applied Social Sciences,

Liverpool John Moores University • Fausto J. Sains Salces, School of Computing and

Mathematical Science, Liverpool John Moores University • All the staff at the Furniture Resource Centre Group who

helped in the collection and analysis of data

Page 1 FRC Group Social Report 2001-2002

Assurance Statement Objectives csr network was commissioned by Furniture Resource Centre (FRC) to provide independent assurance on the 2002 Social and Environmental Performance Report, which will be published on its corporate internet site. The objectives were to check claims and review the arrangements for the management of social and environmental issues and the systems for collection of data. We were also asked to comment on the completeness of the reporting and on the company’s social and environmental programme. Responsibilities of the directors of FRC and the assurance providers FRC has sole responsibility for preparation of the Social and Environmental Performance Report. This statement represents our independent opinion. We were not involved in the preparation of any part of the report and have no other contract with FRC, however FRC have also commissioned csr network to provide advice on social accounting throughout the coming year. This presents a conflict of interest, particularly in relation to future assurance exercises. At this stage we envisage the establishment of an assurance review panel during the course of the year. Method and Scope The independent assurance process was conducted through meetings at FRC’s premises in Liverpool, U.K., with managers responsible for collating the data and information on which the report text and data was based. During these meetings, claims were discussed and data substantiated. We did not directly witness any stakeholder dialogue. The assurance process was guided by the AA1000 Assurance module. Strategic Commentary The responsible ‘ordinary business’ strives to make a profit while regarding social and environmental issues as constraints. ‘Social businesses’ tend to reverse this perspective. FRC certainly makes it clear that its social and environmental objectives are central whilst profit is an unavoidable constraint. The way in which FRC management weighs up the balance between economic (including financial), social and environmental performance is crucial. Although this is difficult to describe, the process for achieving this balance is not articulated in any formal way in the report. It would be helpful to see more transparency over decisions such as that to use more social enterprises as suppliers in future reports.


FRC have reported more fully this year on their environmental impacts. It would however be helpful to see a more complete account in future reports, which could, for example, provide further information on the environmental benefits of one of their core businesses (Bulky Bob’s). Opinion On the basis of the assurance process described above, and taking the comments and qualifications in the following paragraphs into account, we are satisfied that FRC’s social report for 2001 provides a reasonable basis for understanding the key aspects of the company’s behaviour and social and environmental impact. Assessment against AA1000 Assurance Principles

Principle Assessment (H=high conformity; M=medium conformity;

L=low conformity) Completeness H Materiality H Responsiveness M Accessibility L Evidence H Recommendations and Qualifications Accessibility and scope csr network commends FRC Group on the high level of disclosure they have shown in this report. However, while we appreciate that the report is aimed primarily at policy and decision makers, the considerable length, as well as its web-based format and complex language, make it inaccessible to certain stakeholder groups such as trainees. In the future it would be helpful to see a clearer distinction between the report and the underlying social and environmental accounts. Completeness This report goes some way towards covering the impacts of both the activity of the business and its governance and management. Areas for the future might include the benefits to society as a whole of taking materials out of the waste stream and further analysis of stakeholders such as policy makers. Page 3 FRC Group Social Report 2001-2002

Governance and management structure The process of gathering information for the report has highlighted some areas for improvement in management information systems. We recommend that these gaps be filled in the coming year through the development of a risk management approach, KPIs and a comprehensive database. Stakeholder engagement and disclosure While FRC appears to have good links with several stakeholder groups (particularly customers and suppliers), their issues are not routinely discussed with them. Considerable effort has been made to understand the needs of trainees, and potential trainees. Issues needing further work include ethnic and gender diversity in the workforce. FRC have engaged with many of their stakeholder groups through annual questionnaires. This dialogue now needs to go beyond asking stakeholders prescribed questions about FRC’s performance and be opened up to deeper forms of engagement, such as the staff forums, which can better capture stakeholder interests and concerns. The surveys themselves could benefit from stakeholder input into their design. Future reports should set out the company’s plans for stakeholder dialogue. The communication of this report to the company’s various stakeholder groups will be a key component of this dialogue. Identification and prioritisation of issues The report covers such a large number of issues, that some form of prioritisation would be helpful. There are, however, some gaps in the coverage of social and environmental issues, particularly: • Knowledge of toxic or polluting components in FRC products; • Working conditions in the manufacture of FRC products, and components. • Indirect impacts in the supply chain. FRC appear to have a close relationship with their immediate suppliers. This is an excellent platform for understanding the risks, and working out how to address them. FRC should now complement these informal arrangements with a formal requirement on suppliers to work to improve their performance, including issues such as risk management, commitment to good working conditions and their environmental performance.


Targets and benchmarks The report includes relatively few SMART targets and benchmarks. Where these are reported (e.g. ethnic diversity of the workforce) it adds greatly to the transparency of the report. Future reports should make more systematic use of benchmarks drawn from comparable operations and of targets and indicators. Adrian Henriques, Associate

Deborah Seamark, Associate

Hope Sherwin, Consultant csr network limited September 2002, UK --------------------------------------------------------------------------------------------------------------------------- csr network is a business focused, corporate social responsibility consultancy organisation, bringing together specialists from the fields of environmental management, social accounting, and sustainable development. www.csrnetwork.com


Contents

An Introduction to our Social Accounts

7

About Furniture Resource Centre Group

8

Group Structure Map

10

Our Methodology –2000-2001

11

The Furniture Resource Centre Group Social Objectives 2000-2001

13

Our Values: beliefs in action

14

Our Year of Progress 2001-2002

15

So How Well Did We Meet Our Social Objectives 2000/2001? Objective 1 - To provide furniture to enable disadvantaged people to access accommodation

18

18

Objective 2 - To recruit and train long-term unemployed people

29

Objective 3 - To reuse, refurbish and recycle household items from the bulky household waste stream

37

Objective 4 - To create a culture based on a fair and empowering working environment for employees

41

Objective 5 - To treat our customers and suppliers fairly

50

Objective 6 - To operate good environmental practices in the running of our business

54

Objective 7 - To influence the shape and development of social policies relevant to the achievement of the Furniture Resource Centre’s charitable purposes

66

Rewarding Our Values 70 Our Board Of Directors 73 Stakeholders 74 Looking To The Future 76 Our Priorities 2002- 2003 78 Appendix 1 - Stakeholder Map 81


Introduction to our Social Accounts 2001/02 Welcome to Furniture Resource Centre’s fourth set of social accounts, which reports on our activities from the 1st of April 2001 to the 31st of March 2002 and runs in tandem with our financial year 2001/02. We have found that social auditing offers us profound and challenging insights into the scope and quality of the impact we claim we have as a social enterprise. What follows is a huge amount of data and analysis from an organisation deep in the struggle of sustaining and managing a triple bottom line business. The evidence is showing that in some areas we are right on the button, exceeding our targets, in others we have missed the mark by some way and still in other areas it is difficult to tell! If the time and money we have invested in the process is to be justified then the social audit must offer up data which makes us a better business and better at achieving our charitable and social goals. Is this happening? Yes, but not nearly enough. This social audit is still too backward looking and we have yet to develop systems and processes, which put the data in front of us in the regular way, that financial information is organised to help us manage the business. Unless over the coming year we can embed in our systems and culture the capturing and presentation of social accounts then our social audit will continue to be a valuable but limited annual exercise which absorbs too much of the time and energy of some of our best brains. We have made significant strides over the last year in developing user-friendly databases to capture information about such issues as training and the identification of the backgrounds of people shopping in Revive. There is no doubt that the social audit process keeps us honest. We have been confronted with uncomfortable data and things we would rather not hear. The challenge now as always is to respond to the reality illuminated by these accounts and take positive action. Inevitably there is a gap between the lived reality of managing a group of sometimes very messy businesses and our high profile reputation. We like to think that our commitment to warts and all honesty is part of our strength and that what we are learning about the challenges of running a social enterprise (and proving it) is of benefit to not only ourselves but to the wider world. The Leadership Team Liam Black Alison Ball Shaun Doran Tony Rowan 23rd August 2002


About Furniture Resource Centre Group At the heart of our Group is the Furniture Resource Centre, which is a registered charity. Founded in 1988 and based in Liverpool we provide a One Stop furnishing service to registered social landlords throughout England and Wales. We also manufacture upholstered goods that we supply as part of our furniture packages. Revive, our high street store, opened in 1998 and retails second-hand furniture direct to the public offering discounts to people in low-income households. In 2000, we launched Bulky Bob's, a trading subsidiary and a furniture recycling company that collects bulky household waste on contract to Liverpool City Council. Bulky Bob’s also out sources items of furniture and white goods for refurbishment. In early 2001, we launched the Cat’s Pyjamas, a joint venture company with Urban Strategy associates that offers a practical training programme on the challenges of running a social business. All of our businesses operate from Liverpool. Our One Stop furnishing service, warehousing, our upholstery production, our administration teams, the Cat’s Pyjamas team along with Bulky Bob’s are based on the same site. Revive, our high street store is based in Liverpool City centre. A map of our businesses can be found on page 11. We are a social business. We create economically viable commercial propositions to achieve our charitable and social purposes. We are socially entrepreneurial - mixing hardheaded business realism with a commitment to siding with the socially excluded and regenerating our great city of Liverpool. We occupy the territory between the voluntary, public and private sectors. We earn the majority of our income through sales of goods and services - rejecting the dependency of traditional "charity" as firmly as we do the belief that the free market will trickle down and help the dispossessed. In 2001/02, our income was £7.6 million; this is an increase of 14.16% on 2000/01 and 305% of five years ago in 1996/97. This year 90% of our income was earned from the sale of our services, goods and ideas. However, we believe that our business may have hit a high water mark on turn over. For the year 2002/03 our turnover will not be so big. At the 31st of March 2002 we employed 94 staff, 21(29%) of who were trainees on one-year contracts.


Growth, Turnover and Grant Income From 1993 to 2002

Year Turnover %Grant

income %Sales income

Staffing Average/yr

Group Profit/(loss)

£ £ £ 1993/94 264,941 84 9 17 11,543 1994/95 689,816 54 46 25 (839) 1995/96 1,190,551 29 68 24 (19,417 1996/97 1,881,062 19 79 38 10,435 1997/98 3,035,277 11 84 51 55,962 1998/99 3,143,800 20 80 62 221,855 1999/00 5,762,293 9 91 71 411,776 2000/01 6,682,950 7 93 100 504,320 2001/02 7,629,318 10 90 104 773,358

We have produced this set of accounts for the year 1st April 2001 to 31st March 2002 for several reasons:

• To be accountable in meeting our social objectives • To see if we are living up to our values • To set targets for continuous improvement • To be transparent in communicating with stakeholders • To be a learning organisation - allowing our successes and failures to

make a difference to our future operations Last year in July 2001, ethics etc … when verifying our accounts stressed the need for the Group to build an environmental management system into our reporting structure. We have made a start on this. The extent to which is detailed in the following pages along with the methodology we used to gather data and to put the accounts together.


Furniture Resource Centre G

FRC Group Social Report 2001-2002

Leadership Team

Chief Executive

FRC Group Board oTrustees

roup July 2002

Page 10

-

f

Our Methodology- 2001-2002 This year we have still worked to the objectives adopted in March 2001. These objectives were not changed in the year 2001/02 but the way in which our company delivers on them did. Much of the data used in this report has been collected throughout 2001/02 as part of our business practices. However, because of changes in many aspects of our work, we are not able, in all areas, to make comparisons with the data in 2000/01’s accounts. Data has also been collected from our stakeholders on how well they think that we are meeting our social objectives. We asked for feedback from 11 of our stakeholder groups (See Appendix 1) in April and May 2002. They gave feedback on our 2001/02 performance. We issued 914 questionnaires out to them and overall had a return rate of 40% (365) Many of the questionnaires used were an update of those used to prepare the social accounts for 2000/01. Some new questionnaires were devised, and updates made after consultation with relevant team leaders. Our Head of Project Development who oversees the Furniture Resource Centre’s social accounting process carried this out in March and April 2002. We did not involve our stakeholders in the updating or designing of our questionnaires. New questionnaires were designed for Revive customers, Cat’s Pyjamas customers and householders in Liverpool who have had a Bulky Bob’s collection. Major changes were made to our staff questionnaire, our One Stop customer questionnaire and our referral agency questionnaire. We did not ask all of our One Stop customers for feed back, instead choosing to ask the top 69 spending customers who we believed could most comprehensively comment on our service and objectives. We also approached 200 of Liverpool City Council’s tenants for feedback. In April 2002, we surveyed 72 employees using a questionnaire based on the questionnaire used in May 2001. This number was low because the questionnaire was carried out just before a new intake of trainees. Staff completed the questionnaires anonymously, which were then handed over to Paul Jones of Liverpool John Moores University’s School of Law and Applied Science for independent analysis. He also advised on a change in the scoring system of our existing staff questionnaire, allowing individuals to score their responses on a scale of 1 to 5, where 1 equalled a strong agreement with a statement, and 5 a strong disagreement. It was felt that this reflected an individual’s views more accurately. The staff questionnaire was analysed by a PhD student at Liverpool John Moores University’s School of Computing and Mathematical Sciences. Replies given in the questionnaire indicated that a number of issues merited further exploration with staff members in small groups. Four groups were chosen in order to represent different categories of staff within the company. In June 2002, 22 people participated in focus groups independently facilitated by Paul Jones. He opened up discussions with staff on issues such as training, health and safety and company values. These issues had all been raised by staff in feedback gathered through the staff questionnaire. Page 11 FRC Group Social Report 2001-2002

We expanded our successful Liverpool City Council tenants’ questionnaire of 100 in 2000/01 to 200. The purpose of the survey was to gain direct feedback from tenants to assess the extent to which Furniture Resource Centre’s One Stop furnishing service helps make furniture available to people on low incomes and in housing need. Due to the constraints of time and resources we decided upon a self-completion and return by post questionnaire method. A sample of 200 tenants were selected in the following way. 50 were from tenancies furnished in the financial year 1999/2000, 50 from tenancies furnished in the financial year 2000/01 and 100 were selected from 2001/2002. These tenants were selected from a representative sample of postcodes in Liverpool in which our One Stop service had furnished tenancies for Liverpool City Council. A PhD student at Liverpool University and a Marketing Assistant at the Furniture Resource Centre undertook the questionnaire analysis. The results of the stakeholder surveys have been used to account for the extent to which we are meeting our seven social objectives. The detail of our accounts is documented in the following pages. For our environmental report we used the baseline data gathered in July 2001 on our 2001/02 performance as a foundation for this report. This has enabled comparisons on performance between 2000/01 and 2001/02 to be made. Most of the data has been collated from financial records and invoices, and also from records kept by the various operational areas of the Group. Detailed information was collated, then total usages and costs calculated. This information has then been used to calculate relevant performance indicators such as total Carbon Dioxide emissions for the Group, using industry standard measures and conversion factors.


FRC

1.

2. 3.

4.

5. 6.

7.

M

The Furniture Resource Centre Group

Social Objectives 2001-2002

To provide furniture to enable disadvantaged people to access accommodation

To recruit and train long-term unemployed people

To reuse, refurbish and recycle household items from the bulky household waste stream

To create a culture based on a fair and empowering working environment for employees

To treat our customers and suppliers fairly

To operate good environmental practices in the running of our businesses

To influence the shape and development of social policies relevant to the achievement of the Furniture Resource Centre’s charitable purposes

arch 2001

Page 13

Group Social Report 2001-2002

Our Values: beliefs in action Our values are Bravery, Creativity, Passion and Professionalism.

Our Group values are about the way in which everyone in the Furniture Resource Centre Group works. They are beliefs in action and are championed by our Leadership Team, our team leaders and our board of non-executive directors. We reward staff who show they work to our values.

• We aspire to take the world as it is and deal with its realities, aiming everything we do at changing society for the better. This requires bravery, creativity and a passionate commitment. We believe that we must be at all times professional in all we do.

• We have devoted a full section to reporting on the progress we made 2001/02

on our values. This can be found on page 71 of these accounts.


Our Year of Progress 2001-2002 We have completed our fourth set of social accounts and verified much of what we say we do with real facts and figures. As with previous year’s accounts we have found areas that we must improve upon if we are to continue to meet our social and environmental objectives and furnish homes and lives. Selling our products, services and ideas This has been the most successful year in terms of sales, profitability and cash management for Furniture Resource Centre Group. Sales through our One Stop service have increased by 8% and we made a net Group profit of £773,358. For the first time we were able to put cash into reserves. A significant proportion of furniture sales have been to furnish the homes of asylum seekers dispersed around the country by Government. This is unlikely to continue into the next financial year given changes in Government policy. We successfully won a major contract with Birmingham City Council, which may provide us with the cornerstone for a manufacturing, and logistics based operation in the West Midlands. There were strong signals in the final quarter of the financial year that the level of sales achieved in 2001/02 will reduce dramatically over the coming 12 months and beyond. This is in part due to the enormous changes going on in social housing and in particular stock transfers. This is dealt with in more detail in the concluding part of these accounts. Our bulky household waste service to the people of Liverpool, Bulky Bob's, had a very successful second year. Demand for the service has been ahead of all expectations. Indeed, demand outstripped the City Council’s budget for the service and, in the spirit of partnership; we did not charge the Council for calls in the final quarter of the year. With regards to our retail operation in Liverpool city centre, Revive, the year was very much a game of two halves. In the first two quarters Revive Stores Limited neither achieved profitability nor our goal of getting furniture to people in real need. In response to this crisis situation we tore up the script and completely remodelled how we market and retail furniture to the public. We closed the retail unit at Bulky Bob's on Brunswick Business Park, got rid of all of the slow moving stock at Revive and filled it with pre-loved Bulky Bob's collected stock. We sub-let the basement to the Bed Factory and continued to let space to Phoenix Fireplaces. The turn around in fortunes was dramatic as reflected in sales levels, profitability and crucially the numbers of low income families benefiting from the bargains on offer. Whilst Revive will never be a big money spinner it is month on month covering its costs and making a small profit. Sales of places on Cat’s Pyjamas events have been very encouraging in what is its first year of trading. All three-day events were sold out well in advance and the company ended the year with a strong cash balance and heading for profit.


Supporting Our People Yet again the ways in which we support the personal and professional development of permanent members of staff and unemployed people who come to us for training have changed in the face of our business’s realities. With regards to permanent members of staff, our How’s It Going performance review was implemented across the Group and in the final quarter of the year we launched our University for the People which aims to offer everyone high quality and flexible opportunities to learn and develop. It is based on a highly successful model pioneered by South West Airlines in Dallas, USA. Whilst the number of people employed over the course of the year has increased, it has not been an easy year for everyone. The re-organisation of retail and merging of Furniture Resource Centre’s and Bulky Bob's Logistics Teams led to the compulsory redundancy of 7 people. Another three people were redeployed in other jobs. Another significant development was the opening of our refurbished site on Atlantic Way. This offers all staff that work there a very high quality environment and also, for the first time in seven years, all Furniture Resource Centre employees, except Revive, are based on a single site. This has significantly improved communication and the sense that we are all part of one culture. There have been significant changes this year in our Intermediate Labour Market (ILM) programme. As part of a review of the business by the newly formed Leadership Team, the process and economics of the programme were analysed. The conclusion was to move towards offering fewer places and to concentrate on recruiting people who face severe barriers to employment. We closed down our reupholstery programme because it was uneconomic and did not offer training for which there is a market demand. Another key element driving the restructure of training has been our inability to source reliable funding. Again this year we have been the primary match funder for our European Social Fund allocation. We have put more than £216,000 of our own revenue into training. This has been possible because of the success of our business operation but it cannot be sustained indefinitely. We need to recruit a Head of People Development to lead the rethinking of how we remain one of the best chances for unemployed people in Liverpool. We have continued to build our values culture seeking wherever we can to include people and to expand and grow understanding and practice. Most people in the Group have engaged with enthusiasm but culture building is a non-stop process and there is still much to do. Influencing the Policy Environment As the interest (and hype) around the social enterprise business model has continued to rise, the profile and influence of Furniture Resource Centre has similarly risen. We have sought to play as full and productive a part as we can in the debates going on locally, regionally and nationally around social enterprise. This has ranged from our taking the lead in the nitty gritty of ILM provision in the sub region to advising the Department of Trade and Industry (DTI) and having breakfast with the Prime Minister to talk about social enterprise! In less than 18 months the Cat’s Page 16 FRC Group Social Report 2001-2002

Pyjamas has established itself on the leading edge of practice based analysis on the potential and limits of the social enterprise business model.


So how well did we meet our social objectives 2001- 2002?

GettiCentrelyinpeopfurnitand oin the In 202000morea reta One Our Osociathis ppeop This authoMancregisaccoincre

FRC G

Objective 1 To provide furniture to enable disadvantaged people to access accommodation by offering:

a. A One Stop shop furnishing service for Registered Social Landlords and Local Authorities

b. Low cost goods to referral agency customers at Bulky Bob’s

c. Offering discounts on goods at Revive Stores to people on low income

ng furniture to those in need was the key reason why the Furniture Resource re began in 1988. Back then we collected unwanted furniture and gave it away, g on grants and donations to keep the charity going. Today we get furniture to le in need through our One Stop furnishing service, we collect and salvage ure through our collection service at Bulky Bob’s and we sell direct to the public ffer discounts to low income households through our high street store, Revive, centre of Liverpool.

01/02, we saw our One Stop furnishing service furnish more homes than in /01, saw us re-invent Revive and rethink Bulky Bob’s retail. We dealt with even collections through our Bulky Bob’s service and continued our work to develop il based credit union.

Stop Service

ne Stop business offers a furnishing service to local authorities and registered l landlords wishing to offer furnished accommodation to their tenants. They do redominantly either to manage housing voids or as an explicit way of supporting le in poverty.

year we furnished 3,816 properties for 116 customers. Of these 39 were local rities. Our top spending customers were Liverpool, St. Helens, Salford, hester and Birmingham local authorities. We worked with a total of 42 tered social landlords and had 53 other customers mostly offering special needs mmodation. In 2000/01 we furnished 3,676 properties. This represents an 8% ase on our turnover with the One Stop furnishing service.

Page 18

roup Social Report 2001-2002

The total number of properties we furnished increased by 4%, and our turnover increased by 8%. We believe this is because customers purchased more furniture items per property. They therefore either offered more comprehensive furniture packages to tenants or furnished homes for larger family groups. This will also partly explain why we were unable to meet the target that we had set ourselves of increasing properties furnished for the year 2001/02 by 10%. It appears that the customers chose to spend more on fewer properties. In May 2002, we sent a questionnaire to 69 of our top spending customers about our 2001/02 services. Thirty-seven replied representing a 54% (36%, 2000/01) return rate and this included our top five spending customers. The questionnaire covered a range of issues about the service from confirming why and for how long our customers have offered furnished accommodation, to giving valuable feedback on the quality of the products and services we provide. 57% (55%, 2000/01, 82%,1999/2000) of these customers offer furnished tenancies citing void management and retention issues. 70% (68%, 2000/01) offer them to meet tenants needs citing vulnerable tenants or rehousing of single homeless people, and 9% (19, 2000/01) offer special needs. Particular reasons given by our customers were: “To assist with the marketing of voids, to enable tenants to obtain furnishing paid for through housing benefit.” “Lack of sustainability / demand, deprived areas where applicants have little money to furnish their own property.” “Difficulty letting bedsits, lots of young people who have no belongings, as first independent accommodation.” “Ongoing contract with the Home Office to assist asylum seekers.” “Control voids, stabilises. Best value. To help tenants move in. Affordable safe housing. Stop the use of loans.” “Improve demand issues. Provide furnished accommodation to those who may not have the financial mean to purchase their own.” “To reduce youth homelessness.” Our One Stop service customers also said furnished housing offered the following advantages: “Turns bricks and mortar into homes, helps to create sustainable tenancies, reduces turnover, prevents tenants going into debt.” “The tenants are appreciative and it helps them a great deal.”


“Increased choice, helps sustain tenancies, increases demand from young single people.” “Easier to let when furnished especially if the tenant is young and does not own any furniture. Letting time is also reduced.” “We deal with women who are homeless and leave home without any furniture or even personal belongings.” “Most of our tenants do not have the resources to furnish their flats.” “Allows a person to get started when in a position of need. Supporting people e.g. relationship breakdowns, single parents etc.” They also cited the following as the disadvantages of offering furnished accommodation: “Valeting furniture, theft and increases rent arrears.” “Affordability, young tenants who become employed cannot afford rents and service charges, yet they don’t want to move into unfurnished properties. We have had occasions where tenants would prefer to remain unemployed than to lose their homes.” “Tenants abscond and take furniture with them. Tenants take up the tenancy, don’t move in and then sell furniture. Damage the furniture as they don’t feel it is theirs to look after.” “The main problems are effective record keeping, has proved difficult, storage of furniture is time consuming, difficult to achieve.” “Deliberate damage.” We have continued to furnish properties for our customers who have contracts with the National Asylum Support Service (NASS- is part of the Home Office) offering accommodation to asylum seekers. This year 28% of the turnover ( 30%, 2000/01) of our One Stop furnishing work was with local authorities with these NASS contracts. We have spent the year working on our plans to expand into the Midlands. We continued to work closely with our local partner, Mercian Housing Association, who bring local, social and political knowledge to our partnership with them. In November 2001, we won a contract with Birmingham City Council to furnish properties so that they can offer furnished accommodation to tenants. We had hoped to start our Midlands operations in the spring of 2002, but over the year the long process of engaging funders for training and capital start up took much longer than we originally envisaged. We therefore re-visited our development strategy and now aim to start operations in the autumn of 2002.


In the spring of 2002 we appointed a general manager for the Midlands business. His job is to put into place our three year development plan that will see us: setting up a distribution warehouse in Birmingham; pursuing funding so that we can recruit trainees into a growing business and working with other locally based social enterprises. The first of these is the social firm1 Shelforce, who will manufacture bed bases for both the Liverpool and Birmingham based distribution operations. We have now found a site in a New Deal for Communities area and want, when we begin operations to recruit people who reflect the make up of this local community. Tenants In May 2001 we carried out a survey of Liverpool City Council tenants. In May 2002, we repeated the survey targeting a total of 200 tenants to prove the effect on their lives of having a furnished tenancy in 2001/02. The main claims for furnished tenancies are still that:

• They help people in housing need to set up a decent and comfortable home,

• They help providers to let property and stabilise tenancies We still believe this and wanted to get wider feedback from a wider group of tenants to prove how it helps them set up a decent home. We therefore selected 50 tenants who had been in furnished accommodation since 1999, 50 who had been in furnished accommodation since 2000 and 100 who had been in a furnished tenancy for less than one year. The overall response rate was 47%. Of those who replied 49% (39%, 2000/01) of them were unemployed, 26% (33%, 2000/01) sick and 61% (61%, 2000/01) single. 34% (36%, 2000/01) of them had been homeless or near homeless within the last two years and 68% had been in that particular accommodation for less than a year. Once again as in the 2001 survey, in the responses to open ended questions there is no doubt that the furnishing service is highly valued as a way of creating a home and that people did not have the means to do this otherwise. In response to the question ‘Would you choose a furnished tenancy if you had a reasonable income’, 55% of them said ‘Yes’, and that goods were of a better quality than they could have afforded to buy for themselves. This is why they took a furnished tenancy. “I think this is a very good scheme. It puts the help where it is needed and helps people stay out of debt.” “I think the furnished tenancy is an excellent idea for people who are not financially well off enough to afford their own furniture. You have given people like me a chance to set up home without the added worry of not being able to afford all of the items you have given us. Without your help I would still be struggling to afford these items for my home. The people who came to bring these items were extremely nice and helpful and I would like to thank them. Keep up the good work, you have helped me and many others in my situation – thank you.”


1 A social firm is a social enterprise specifically employing people with physical and mental disabilities.

“All the furniture you supplied is very good, only one moan. I only received a 2-seater sofa and could really do with an armchair as well for any visitors or family visits. Thank you so much.” “Being a single-mum with two boys and only on low income, having a furnished house helped me tremendously, as I had only the clothes I stand up in. I moved into the property with a lilo bed for me and the boys to sleep on and borrowed chairs, which was so depressing. Then I got the furniture, which helped me and the boys feel more like it is a home. Financially it would have taken me a long, long time to furnish the house without the furniture you gave us.” “I was pleased with my flat and I find the furnishing very good indeed, especially as it gives unemployed people a good start.” The effect of the provision of furniture in stabilising the tenancy depends upon a tenant’s housing aspirations and how well a furnished tenancy suits those who can manage and maintain a tenancy. Tenants who have health or social problems may find a furnished tenancy absolutely ideal. However, the service that we provide does allow for differing amounts of furniture to be provided but once delivered the furniture cannot be returned and the service is therefore not flexible to the fact that tenants’ circumstances can change. The difficulty with a service designed to increase lettings is that it can lose sight of the longer term and overlook the possibility of managing furnished tenancies more creatively. For example, building in a flexibility to accommodate tenants changing circumstances. This is a challenge to the sort of service that the Furniture Resource Centre Group provides to our customers. We made it one of our targets for 2001/02 to talk to Liverpool City Council to see if it was possible to offer a more flexible furnishing service. This is not possible as the flexibility of a furnished tenancy service is a function of our customers’ policies and staff resources. Staff resources are often stretched or in short supply. To support our customers we are considering seconding a member of our staff into our customers’ letting teams on a short term, part time basis. This will enable customers who are short staffed to learn our ordering and furniture delivery procedures and therefore be able to offer furnished accommodation more easily. Customers can also attempt to be more flexible about the furnished tenancy service that they offer. The survey proved that a furnished tenancy has been invaluable to tenants providing them with a standard of accommodation that they could not possibly afford otherwise. When we conducted the original survey in May 2001 we aimed to use the information gathered to work with customers to design a continuing system to gather more information on tenants and their experiences of furnished accommodation. We set this as a target for our work in 2001/02. We have not been able to develop this work as far as we would have liked. We found that our customers do not collect this information in a standard way nor do they each collect it to the same degree. We also pursued funding to develop partnerships with customers and develop a pilot database but we were unsuccessful. It seems our customers are so busy managing properties they do not have the time to develop in depth reporting systems on the details of their tenants. In our discussions with the Housing Corporation to ascertain


the possibility of funding further research, they advised us that they did not believe that our data base idea was innovative enough to merit funding. We must not lose sight of the importance of monitoring the effectiveness of providing furnished accommodation, and we must think of a more creative way to carry out this monitoring so that we can improve our service and meet the needs of more low income households.


Low Cost Goods to Referral Agency Clients at Bulky Bob’s Bulky Bob’s was launched with a clear goal of getting low cost furniture to low-income households. Goods were sold from the warehouse to people in receipt of benefit. Referral agency clients were helped further by getting an additional 10% discount and free delivery if they lived in Liverpool. Between April 2001 – January 2002 Bulky Bob’s continued to sell items to the public and referral agencies. Referral agencies are organisations where low-income householders will go for help or advice and they will “refer” suitable customers in need, for example, on to Bulky Bob’s. Between April 2001 and January 2002 Bulky Bob’s sold 5393 items to 1165 customers. 76% of these customers were from low-income households. 672 (58%) of them were in receipt of benefit and 204 of them (18%) were referral agencies clients. In September – March 2000/01, 74% of Bulky Bob’s customers were from low-income households. We increased the number of low-income householders buying from Bulky Bob’s by 50% on 2000/01 and exceeded the target of a 20% increase that we had set for ourselves. By the end of November 2001, we realised both Bulky Bob’s and Revive, our high street store, were selling the same product to the same market, i.e. second hand goods to low-income households. Also, informal customer feedback told us that the Bulky Bob’s warehouse in a business park south of the city centre was not easy to get to on public transport. We decided that the best way to manage the Group’s business was to merge our retail operations and move retailing from Bulky Bob’s to a more accessible and visible city centre location at Revive.

Bulky Bob's customers 1st April 2001 - 31st January 2002

In receipt of ben672 (57.7%)

Referral agency client

204 (17.5%)

FRC Reupholstery37 (3.2%)

Dove Designs31 (2.7%)

FRC Group Staff96 (8.2%)

Dealers125 (10.7%)


Low Cost Goods to Low-income Households at Revive Our retail high street store, Revive, saw great changes throughout 2001/02 as we sought a balance between making this part of the business viable whilst meeting our social objectives of getting furniture to low-income households. In June 2001, we realised that selling new stock meant that it was hard to compete on a high street where there is keen competition in new furniture sales, and that our new furniture was often too expensive and out of reach to those most in need. Without our credit union plans in place we were also unable to meet their needs by offering, as we had originally planned, low cost credit. In late July 2001, we re-invented Revive. We sold off the new stock making way for the selling of refurbished and second hand goods at low cost. We had no robust way of proving that we were selling to people from low-income households. We continued to sell a mixture of refurbished and second hand items at Revive until January 2002 when we decided to concentrate on simply selling second hand items and devising a way to prove that we were selling to low income households. In February 2002, we introduced a new discount scheme for customers at Revive. We want Revive to sell good value furniture at low cost available to everyone and we have tried to price second hand items in a way, which matches how much money our customers have. We therefore give discounts to some of our customers. 10% is given to those in receipt of benefit and 20% to people who come to us through a referral agency and they get a free delivery. With this system we are much more confident about proving that we sell to the lowest income households and therefore those most in need In February 2002, 24% of our customers were from low-income households. This increased in March to 67% (when 64% were in receipt of benefit and 3% were from referral agencies.) This trend has increased throughout April-June 2002. In June 2002,75%(199) customers accounting for 73% of our sales were to people in receipt of benefit. We are convinced that we made the right decision in concentrating our retailing at Revive. In May 2002, we surveyed 46 referral agencies about the move to Revive from Bulky Bob’s. Of the 8 who replied all said that Revive was easy to find. However, there were two comments made that we must note: “Location is against you, though it is better than Brunswick(Bulky Bob’s). Referral vouchers are a great idea”. “I felt that customers were a bit confused around the difference between Bulky Bob’s, Revive and FRC. (Particularly once Bulky Bob’s was swallowed up by the larger organisation. Since Bulky Bob’s have closed their operation to new clients/ new donations the choice of furniture (and in particular the affordability of furniture) has been affected”. Even though we would not agree with the second comment it does show that there is a perception about Revive that we must change by improving our communication with referral agencies in 2002/03. Page 25 FRC Group Social Report 2001-2002

In May 2002, we surveyed our Revive customers for the first time to ask them about our services since switching in January 2002 to sell only second hand furniture. 63% of our customers said that they knew that we were offering the discount scheme. A total of 97 customers were surveyed to ascertain their views on our services. 76% of respondents were female, 45% were retired and 10% were unemployed. They made the following comments: “It’s very good.” “ I didn’t know until a staff member explained the scheme.” “See it as you walk around.” “Some confusion over how the pricing discount scheme works.” “Needs to be advertised much more – outside the shop, Echo and Merseymart.” “More inclined to shop here because of this.” 20% of our customers said that they would make a purchase that day, but 39% said they would not buy because we did not have the right product for them at that time. Amounts of money spent were between £5 to £300. Other comments our customers made about the store are as follows: “Last year it lost the whole feel of what it was about, nobody wanted expensive new suites.” “It’s a very good service for those who can’t afford new furniture.” “It’s a good thing as there are loads of people without much money and the furniture would get thrown away otherwise.” “Marvellous job. Ideal for people starting off, can furnish a home for a few hundred pounds.” 71% of our customers had travelled to the shop by bus and 67% said they had first noticed the shop as they had passed by on the bus. 75% of these customers were repeat customers and 45% had visited the shop in the last six months. Reasons they gave for visiting the shop were as follows:

• 38% to get a bargain • 15% in great need of furniture • 20% because of the price of the products • 24% because Revive sells what they want • 59% just to have a look around • 21% because they had shopped there before

Other reasons included: “Looking for something specific.” Page 26 FRC Group Social Report 2001-2002

“Came in to look with somebody else.” “Was just passing.” “Just wanted to check if anything new had come in.” “Came in to organise a collection of some furniture.” Re-thinking Revive and the move from Bulky Bob’s retail is working. The comments from customers prove this and the number of second-hand items selling means that we have to find additional sources of second-hand furniture to meet the demand. We get a passing trade that we did not get at the Bulky Bob’s warehouse and Revive is accessible by several bus services. As a result Bulky Bob’s collection service cannot provide us with enough goods to satisfy our customers. We are also continuing to pursue our plan to develop a retail based credit union offering low cost credit to customers. This facility will enable them to purchase furniture, even new or second-hand. Low Cost Credit at Revive Our intention for 2001/02 was to create a low cost credit facility at Revive for our customers. We know that people who are most in need of essential household items are the ones that face the highest rates of interest and are offered the least choice when it comes to credit options. They are also the people who can least afford household items. Since its opening in 1988, Revive's inability to offer credit has challenged the viability of the store and prevented it offering the kind of service its customers need. In the summer of 2001, on our behalf The Co-operative Bank funded an independent piece of research into the reasons why low-income shoppers make the credit choices that they do. "Access to credit on a low income"2 was published in June 2001. This research revealed a world in which a large number of people on low incomes have to borrow money regularly for essential items and to make ends meet. Most are excluded from mainstream credit services and turn to moneylenders and other alternative sources of credit. For this there is the price of high, often extortionate, interest charges and unfavorable terms and conditions. There is also a cycle of never ending borrowing and debt repayments. We are committed to creating a low cost credit and savings facility for our customers in partnership with Partners Credit Union. Following a successful vote by members to extend Partners Credit Union’s common bond to cover “all those who live and work in Merseyside”, an application is being prepared to the Financial Services Authority (FSA). A decision from the FSA is expected on this request shortly and a conclusion is expected in autumn 2002. We hope the FSA will favour this request enabling us to offer those on low incomes more choices and greater access to low cost quality furniture with which to furnish their lives.


2 Access to Credit on a Low Income – a study into how people on low incomes access and use consumer credit. Paul A. Jones, Liverpool John Moores University. June 2001.

Our Priorities for 2002/2003 are to:

• Introduce additional services for customers of our One Stop business

• Second staff into our customer letting teams to make the provision of

furnished accommodation easier and more flexible

• Encourage customers to gain detailed feedback on the benefits of furnished accommodation from tenants

• Open our Midlands logistics operation

• Source more second hand and low cost furniture for sale in Revive

• Improve our communications with referral agencies in the city

• Continue to push the development of our credit union.


a.

Objective 2 The recruitment and training of long term unemployed people by:

a. The provision of Intermediate Labour Market places in Upholstery, Logistics and Retail

b. The provision of employment for long-term unemployed people

with the Furniture Resource Centre Group c. Developing relationships with employers across the region to

promote the recruitment of staff on training contracts from the Furniture Resource Centre Group

The training of long term unemployed people is an important part of our business. We believe that getting a job is a clear way out of social exclusion. In 2001/02, we made significant changes in the way that we support our people. We continued to offer meaningful employment throughout our businesses in logistics, upholstery and retail to long term unemployed people. Staff on training contracts stay with us for one year and earn a salary, gain a clear work ethic, and a set of transferable qualifications increasing their confidence and employability along the way. This year we took a tougher stance on the way in which we support people. We were tougher on lateness, attendance and attitude to work. We were keen to reinforce the work ethic. We reviewed the type of people we wish to attract in to our business for training and how our training and operational departments work together. This review led to a renaming of our Training Department to The People Development Team and a repositioning of all staff training needs under the banner of our University for the People. We met our targets to set up a database so that we can now track our training outputs and our leavers for up to two years. Throughout the year 2001/02 we employed 53 trainees. In 2001/02, 60% (80% 2000/01) of our staff on training contracts, after a year with us, went into employment or further education. This is significantly higher than all Government intervention schemes. In 2000/01, the Liverpool Employment Zone, for example, succeeded in getting only 50% of long term unemployed people into jobs. Our 60% outcome is less than the 80% target that we set for ourselves in 2001/02. The reasons for this are explained later. In order to offer training we seek to find funding for our Intermediate Labour Market places. This year we were able to find European Social Funding (ESF) for our trainees. This covers 45% of their employment and training costs. However, we were unable to find the 55% match funding. As a result we funded the shortfall of £216,000 from our profits. This led us to closely examine where in our business we offered meaningful training. Were we offering the best deal to trainees? What was best for the whole business? Page 29 FRC Group Social Report 2001-2002

Due to the merging of Bulky Bob’s and Revive’s retailing roles we stopped retail training. Also, due to the business decision to no longer refurbish second-hand suites and to merge upholstery training with our production department we recruited fewer upholstery trainees. From January to March 2002, we experimented with offering job search skills to trainees that were delivered by an external organisation; in fact another Liverpool based social enterprise. Feedback from our trainees was one of dissatisfaction in style of delivery, content and poor outputs. We took the decision to offer this course in house and starting in April 2002. Our People Development Administrator has been successfully running this course, getting four out of four leavers into jobs. In September 2001, it became apparent that there were different priorities and approaches to managing our trainees between our People Development Team who organise recruitment, training, support and job search for trainees and our operational managers who manage trainees as they do their work on a day-to-day basis. We were keen to have a clear and agreed approach in place for our September 2001 recruitment and ensure that there were clear lines of communication between operational managers and the People Development Team. This was about tightening up on something that was on the whole a great success, but where there had been some communication problems leading to tensions between the teams. Discussions between our operational managers and People Development Team identified the issues to be recruitment of the right people in the first place and the number of trainees that we had recruited. Being clearer on the day-to-day management and what happens when things go wrong was needed. We also needed to decide on the extent of the support we wished to give, whom disciplines trainees, when training was to take place and when trainers were to be free to train. We agreed that the two teams should work more closely together in recruitment and selection and that managers would have day to day line management responsibility of trainees. The People Development Team would sign post trainees to outside specialists for advice on specific personal issues and not try to deal with it themselves. Joint planning on timetabling the training for trainees was also agreed as was offering job search to trainees and a weekly pay system for them to give greater support to individuals who could not manage a monthly salary. Monthly meetings were organised between operational managers and the People Development Team to ensure that this happened.


The Provision of Intermediate Labour Market Places and Employment for Long-Term Unemployed People We offer salaried training places in two of our businesses, the Furniture Resource Centre (upholstery and logistics) and Bulky Bob’s (logistics). Throughout 2001/02 we employed 53 staff on training contracts. In 2001/02, we recruited (July and September 2001) a total of 13 staff on training contracts. At 31st March 2001, we had 37 staff on training contracts. Throughout the year 40 left. A year later in March 2002, this had dropped to a total of 13, until we recruited a further 13 again in May 2002. This drop in numbers can be explained by the fact that we decided to reduce the number of trainees throughout our business. This enabled us to concentrate more of our effort on fewer individuals. We also met the target that we had set for 2001/02 to integrate our upholstery training programme into our production area. This meant that our trainees’ time at the Furniture Resource Centre was much more realistic as they worked in a production environment. We now offer fewer places in upholstery and none in retail. This is a result of our decision in July 2001 to stop retail training and the decision in early 2002 to stop refurbishment of second hand goods. We also delayed the recruitment of new trainees until May 2002 so that we were sure that we would have the relevant funding in place.

Annual Recruitment of Staff on Training Contracts

0

5

10

15

20

25

30

Logistics Upholstery Retail

No

of s

taff

recr

uite

d

1999/2000 2000/2001 2001/2002


In the 2001/02 recruitment, all our staff on training contracts had been unemployed for at least six months. 40% (39%, 2000/01) had been unemployed for 6 to 12 months and 32% (29%, 2000/01) for 12 to 24 months.

Staff on training contracts - length of unemployment

0

5

10

15

20

25

6-12 months 1-2 years 2-4 years 4-10 years 10 years plus

70% (73%, 2000/01) of staff on training contracts are between the ages of 25 and 44 years old.

Age range of staff on training contracts

25-3434%

35-4436%

45-5413%

55-64 17%

65+0%

The fact that 47(87%) (37, 90% 2000/01) of this year’s staff on training contracts are male and 6 (13%), (4, 10% 2000/01) are female reflects the fact that upholstery and logistics are still traditionally perceived to be “men’s work”. In April 2002, we ran a high profile campaign to recruit female trainees on to our logistics programme. We Page 32 FRC Group Social Report 2001-2002

were successful at getting 7 women applicants and short-listed 4 women candidates. We offered a training place to one woman but she left, for personal reasons, after a couple of days of starting her training. It seems that the sustained heavy lifting involved in our logistics work is off putting to many women candidates. However, we hope that this does not exclude women candidates in the future. The majority of staff on training contracts (89%) (92%, 2000/01) describe themselves as white and none of them are registered disabled (0 for 2000/01). This year, as in 2000/01 we had a zero drop out rate from induction. This meant that we met the target we had set for ourselves. Here are some of the comments, which our staff on training contracts made after their first day on the induction course and after 11 days at the end of the course. After the first day participants made the following comments: “Nervous, didn’t know anybody but comfortable by the end of the first day.” “Nervous.” “A bit nervous and unsure of what was required of me.” “I was happy to be here but I didn’t feel I was going to achieve what I have.” “I was so happy to have been given a chance to prove myself I was so nervous, I kept quiet for about the first 10 minutes, but the training staff are so supportive that I wasn’t quiet for long. Once I get to know people you just can’t shut me up just ask anyone.” After the 11-day induction course some of the participants said the following: “More confidence, more motivation.” “Confident.” “I feel more confident after doing the induction, and I feel that I am back in the swing of things and getting up at a set time and I feel I am doing something worthwhile.” “I cannot believe how confident I’ve become in just two weeks it’s done a lot for my self esteem. I feel I can do anything now.” “I feel fantastic I feel that I have achieved so much already and the job hasn’t even started yet. The induction has helped me so much with my confidence, even my girlfriend has noticed the change in me.” As well as offering our staff on training contracts qualifications in logistics and upholstery they can gain a further six qualifications in Customer Service, Computer Literacy and Information Technology (CLAIT), Manual Handling, Health and Safety, First Aid and Essential Food Hygiene. In 2001/02, all the 40 staff on training contracts that left us gained a total of 224 (223, 2000/01) qualifications. This is an


average of 5.6 (5.7 2000/01) qualifications each. The achievements and contribution of our training staff were acknowledged at our July 2002 Awards ceremony.

Qualifications gained by staff on training contracts2001/2002

0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40

Health and Safety Certificate

Customer Service

Manual Handling

First Aid

Fork Lift Truck license

CLAIT

Essential Food Hygiene

LGV Class II

NVQ II Upholstery

ADR carriage of hazardous goods by road

D32/33 Assessor's Award

NVQ II Retail

No of staff on training contract achieving qualification

Developing Relationships with Employers We want to develop relationships with employers across the region so that they will see the Furniture Resource Centre Group as a place from which to recruit quality staff for their businesses. In March 2001, we had extended the contract of one of our upholstery staff on training contract to help him to set up his own business in re-upholstery. He left us in March 2002. Throughout the year three of our staff successfully gained permanent contracts, two with Bulky Bob’s and one on Upholstery. We worked with Liverpool City Council and a consortium of social enterprises to organise the Making A Difference Event (MAD) held in February. The purpose of the event was to bring the potential of ILM participants to the attention of would-be employers. Over 150 people attended the event including several of Liverpool’s leading employers. We also organised three secondments for trainees out to local companies for periods of a week to a month. In 2001/02, 33 out of 40 (82.5%%) of our staff on training contracts successfully completed their training. 23 (57.5%), (27, 75% 2000/01) of them went into jobs with


16 (22, 2000/01) Merseyside businesses. Another 1(3%), (2, 5%, 2000/01) went into further education. This represents a 60% (80% 2000/01) success rate. This is down on previous year’s figures (80%, 2000/01, 86% 1999/2000) and is due to the fact that this year, six people were dismissed (3, 2000/01) for reasons of poor attendance and time keeping and another incidence of gross misconduct. Nobody left because of ill health. This led us to review how we recruit trainees. Having the right attitude to working here and an openness to learning and change is now a major factor in our recruitment process for trainees.

Destination of Leavers in 2001 / 02

0 2 4 6 8 10 12 14

Logistics

Other

Upholstery

Admin

Retail

Further Education

Dismissed - unemployed

Dismissed - re-employed

Self Employed

Unemployment

It is nevertheless a high level of achievement, which compares very favourably with the 50% success rate of the Liverpool Employment Zone scheme, which targets the easier to place category of unemployed person. Many of our leavers were able to use the specific skills they learned whilst with the Furniture Resource Centre Group to take them into jobs in logistics, upholstery and retail businesses. 40% (16) (66%, 2000/01) of staff on training contracts that found work went into jobs related to the training they gained whilst at the Furniture Resource Centre.


Recruitment versus destination of staff on training contracts

0

5

10

15

20

25

30

Logistics Upholstery Retail Logistics Upholstery Retail

2000/2001 2001/2002

num

ber o

f sta

ff

Recruited Destination

2000 / 2001 2001 / 2002

The challenge for us is how do we improve upon our work and offer worthwhile opportunities for the socially excluded and those from ethnic minorities. We must also work harder to improve the number of leavers going into jobs and make better links with local employers who may wish to recruit their staff from us. This year it will be important for us to recruit a Head of People Development into our Leadership Team who will oversee the improvement and development of our work with trainees. Our Priorities for 2002-2003

• Attain a 70% target of trainees into jobs. • Maintain our zero drop out rate in induction

• Have face to face conversations with 10 leading employers on

Merseyside about the potential recruitment of our trainees

• Continue to track our leavers for up to 2 years

• Recruit a Head of People Development into our Leadership Team


b. Since launching in June 2000, Bulky Bob’s has carried out 63,736 collections of bulky household waste in Liverpool. 37,811 of these were carried out in 2001/02. This equates to an 89% increase on our original contract with Liverpool City Council, and a 50% increase on last year for the same 9 months trading period, i.e. June to March 2000/01. This is due to the effectiveness of Liverpool Direct, Liverpool City Council’s call centre, and the efficiency of Bulky Bob’s, the more we collected the more we were asked to collect. Increased efficiencies have enabled us to hit a higher recycling rate and access more goods from the waste stream but has stretched the budget of Liverpool City Council. The Collection and Segregation of Bulky Household Waste Bulky Bob’s Collection Statistics 6th June 2000 - March 31st 2002 2000-2001 2001 - 2002 Total visits 29 201 42 332 Completed collections 25 925 37 811 Aborted visits 3 276

(11.2% of total visits) 4 521 (10.6% of total visits)

Tonnes collected 2 031 (69% increase on anticipated)

2 729

Tonnes tipped 1 777 2 143 Tonnes recycled 254 607 % Recycled (by tonnes) 12.5 % 22% Complaints 2 5

Objective 3 The reuse, refurbishment and recycling of household items from the bulky household waste stream by:

a. The collection and segregation of household waste by Bulky Bob’s

b. The refurbishment of upholstered goods by FRC training

c. The sale of refurbished goods by Revive Stores

d. The transfer of white goods to CREATE for reuse,

refurbishment and recycling

e. The sale of white goods to scrap merchants for recycling

Page37 FRC Group Social Report 2001-2002

-

On a collection rate of 37,811 completed calls, the recycling rate has risen to an average of 22.2% (by tonnage) per month. The remaining 77.8% went to landfill. On our original contract with Liverpool City Council of 20,000 calls we are recycling 30% of the tonnages collected. We exceeded our target for 2001/02 to increase our recycling rate from 12% to 20% (by tonnage). This year we have tried to improve on our recycling rate by investigating outlets for carpets by working with WRACE Technologies in Knowsley. They are experimenting with the recycling of post consumer carpets. We hope to extend this to the carpets that Bulky Bob’s collects once WRACE have perfected their dust removing technologies. We have also tried hard to find outlets for the mixed wood waste and medium density fibre board (MDF) furniture that Bulky Bob’s has to deal with. Our investigations show that the technology (apart from municipal incineration) to deal with this waste is just not available. We are in discussions with researchers and funders about finding a solution to this problem. A visit is aborted when it is not possible to make a collection. This may have been because a householder was not at home, has not put the goods out for collection or may have already disposed of the goods in another way. The rate of aborted visits for 2001/02 was 10.6% and has fallen against the 17% (1999/2000) of the previous contractor. All of the 5 complaints (out of 37,811 successful collections), were investigated and all were overturned. At Bulky Bob’s goods are out sourced for reuse. White goods go to CREATE and wooden furniture to Dove Designs. They are both Liverpool based social enterprises. Dove Designs is a mental health charity with a wooden furniture restoration workshop and CREATE is a white goods refurbishment workshop also employing staff on training contracts. In 2001/02, a total of 6088 furniture items were removed from the waste stream. Between April and December 2001 Bulky Bob’s outsourced 5393 furniture items. Of these 51% were sold to people on low incomes from the Bulky Bob’s warehouse. This is a slight increase on the 49% of the previous year September 2000-March 2001. A further 26% in 2001/02 of these items were sent to our Upholstery training team for refurbishment. 2.9% went to Dove Designs a mental health charity that refurbishes wooden furniture.


Destination of furniture items from Bulky Bob's 1st April 2001 - 31st March 2002

1978

1026

839

202

161

1403

0 500 1000 1500 2000 2500

In receipt of benefit

Referral agency client

Dealers

FRC Group Staff

Dove Designs

FRC Reupholstery

number of items

In February – March 2002, 695 furniture items were removed for reuse and were sold through our high street store Revive. Of these 31% were sold to people on benefits or referral agency clients. We also refurbished a total of 346 items from Bulky Bob’s; most of these were upholstered goods and were sold through Revive. Even though we decided mid way through the year for economic reasons to stop refurbishing items, our 2001/02 target of 200% was far exceeded by a 600% increase from the 47 units refurbished in 2000/01. In March 2002, we also began segregating televisions for re-use and recycling. A local television dealer deals with them. 90 televisions were outsourced in March. Bulky Bob’s also outsources white goods (cookers, fridges and freezers) for reuse and recycling. To do this we work closely with CREATE another Liverpool based social enterprise that refurbishes white goods. Until November 1st 2001, CREATE chose the ones they wanted to refurbish and degassed all the remaining fridges and freezers. What could not be refurbished was sent to scrap for recycling. From the Ist of November with the enforcement of Regulation (EC) No 2037/2000 on substances that deplete the ozone layer we changed our operations. CREATE now takes all the white goods collected by Bulky Bob’s, selects what they can reuse, sends the fridges and freezers to a stock pile to await shredding to remove all CFC gases and scraps the remaining unwanted white goods.


In 2001/02, a total of 9473 white goods were collected by Bulky Bob’s and of these 7575 were sent for recycling either to CREATE (80%) or to the scrap merchant. 20% (1898) of all the white goods collected were refurbished by CREATE.

Clearly the challenge for us is to increase our recycling rate whilst meeting an increasing demand to collect more. However, the quality of the items thrown away by householders in the first place determines what can be reused and we have no control over this. We wish to increase the number of goods that we source from elsewhere for reuse e.g. hotels and leisure centres. All have items that our customers in Revive are desperate to have. Our Priorities for 2002/2003

• Increase recycling rates from 22% to 25% by tonnage • Keep better record if the items that we collect from other sources other

than the Bulky Bob’s waste stream.


a.

Objective 4 To create a culture based on a fair and empowering working environment for employees by:

a. Ensuring that all paid employees have satisfactory terms and conditions

b. Offering training and personal development opportunities to all

employees of the group c. Adopting and implementing an effective equal opportunities policy

d. Adopting and implementing an effective health and safety policy

The Furniture Resource Centre aspires to create a fair and empowering culture for its employees. From April 1st 2001 to 31st March 2002, our staff numbers changed little from 74 to 73. However, throughout the year 2001/02 twelve new staff members started and 20 left. Of these 7 were made redundant. We also redeployed 3 members of staff. 40 people on training contracts left and 13 were recruited. At 31st March 2002, the Furniture Resource Centre Group employed a total of 94 people, and throughout the year 2001/02, 146 people worked for us. Terms and Conditions In September 2001, we awarded all our permanent staff a 3% pay rise. Throughout 2001/02 we created 6 new posts. For each recruitment we benchmarked salaries using the Reward Group, who we retain to advise us on rates of pay for new posts and re-structured jobs. According to Reward, salaries in charities generally are some 20% below what is paid in the “mainstream” economy. According to its database, Furniture Resource Centre is broadly 16% below. Finding a like for like comparator with Furniture Resource Centre is very hard given the uniqueness of the social business model – not quite voluntary sector and not quite private. Throughout 2001/02, we have begun to introduce a process so that we can have an affordable and transparent salary progression structure related to individuals’ performance and linked to our corporate values.


During 2001 we developed our values. Starting in January 2002, we awarded individuals who had performed exceptionally during the year. These small cash rewards between £5/£10 were given to staff by their line managers or supervisors to individuals who have performed exceptionally in their work. They are given on an ad hoc basis and as a way of saying thank you and recognising specific examples of good performance. It was agreed in September 2001, with the Furniture Resource Centre’s Board that we would move towards a salary review process linked to the company’s financial performance. Salary increases will be determined on an annual basis by the Furniture Resource Centre Group’s Board and based on the performance of the business. Linked to this there will be a bonus scheme that will reward staff that have performed exceptionally well demonstrating the Group’s values. Team Leaders and the Leadership Team will award these. For 2001/02 we had set ourselves a target of updating our staff handbook. This was finally achieved in March 2002 and was mailed to our staff in April 2002. How’s It Going? This year we have ensured that all staff have had their chance to have a How’s It Going conversation with their line manager. This is our process for having a two-way conversation, affirming good performance, identifying training needs in which people can be honest about where they have missed the mark. It is a simple process and allows staff to be marked on their work performance in regard to demonstrating the Furniture Resource Centre’s values. A How’s It Going took place for all teams by the end of February 2002, this was followed by individual How’s It Going being completed by the end of March 2002. In April 2002 our Leadership Team were given a 360 feedback on their performance. More How’s It Going for teams are planned for the year 2002/03 and individuals will have another How’s It Going at the end of September 2002. This will fit in with the timing for the 2002 pay settlement. In May 2002, we asked the 72 staff and trainees employed at that time to complete a questionnaire on pay, terms and conditions, training, supervision, involvement in decision making, equal opportunities and diversity. These forms were completed anonymously and evaluated by staff at Liverpool John Moores University. The results showed that we needed further investigation in some areas and four focus groups were subsequently set up and run in June 2002 to give staff an opportunity for more in depth feedback. 63 staff completed the staff questionnaire. This is a return rate of 87.5% Pay This year’s questionnaire was based on the survey of 2000/01, but staff were given more options in their answers to allow a more comprehensive feedback. We asked our staff “how important is it that your work makes a difference to the lives of people who are on low incomes or who are unemployed”. 95% replied that the fact that their work is useful to other people is important to them. This is an increase on last Page 42 FRC Group Social Report 2001-2002

years response when 82% replied that the fact their work is useful to others is important to them.

How important is it to you that your work makes a difference in the lives of people on low income?

5%

37%

58%

It doesn't really matter to me who benefits from our work. I'm here because it is a job. (2000/01 - 9%)

It's important to me that my work is useful to other people, but only as long as the pay and conditions areokay. (2000/01 - 37%)It's important to me that my work is useful to other people as it makes coming to work worthwhile, and I amnot only interested in the pay and conditions. (2000/01 - 45%)

We asked our staff if they had seen or heard about jobs in Merseyside similar to the one they do now but with better pay 34% said yes, 38% said no and 28% did not know (29% said yes 38% said no, 30% did not know and 3% N/A 2000/01) We then asked if they believed they could get better terms and conditions (i.e. pensions, holidays and sick pay) for a similar job in another company on Merseyside. 25% said yes, 23% said no and 52% did not know (2000/01, 31% said yes, 26% said no and 40% did not know).


You could get better terms and conditions for a similar job in another company on Merseyside

Yes25%

No23%

Don't know52%

Training and Personal Development This year we began to make progress on the staff training that we offer. The How’s It Going forms completed by the end of March 2002 have been used to identify the training needs of staff and enable us to offer appropriate training throughout 2002/03. We also launched our University for the People in January 2002. The University aims to dramatically increase learning and innovation throughout the Group. We believe that developing the workforce is good for developing a social business and that well trained and motivated staff will allow us to achieve our social and economic aims. Sited at our new building the University has provided us with a perfect opportunity to refine our existing courses and devise new ones. The University delivers courses throughout the day that are work related and also allows us to sell training courses to other social businesses. This year 10 participants from CREATE and 2 from SRJ Industries, both Liverpool based social enterprises attended CLAIT courses alongside Furniture Resource Centre’s own trainees. The University also does much of its work outside normal hours in the late afternoons and evenings. Between January and March 31st 2002, The University for the People delivered 3360 hours of training over 15 courses to 112 attendees. The courses ranged from Introduction to the Internet to Certificate of Professional Competency to Pilates to power point presentations. In course evaluation staff have given an average of 8 out of 10 marks for courses delivered through the University for the People. We asked our staff to comment on the training they had received here throughout 2001/02. Page 44 FRC Group Social Report 2001-2002

The training you have had here has been useful in helping you to do your work

12%

38%

33%

8%

8%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Strongly agree

Agree

Neither agree nordisagree

Disagree

Strongly disagree

percentage of staff

56% of staff said that they found the training they had had in 2001/02 to be excellent or good (45%, 2000/01). Clearly we have improved on our previous year’s performance but would like to improve more in 2002/03. Supervision and Roles and Responsibilities

Do you think that you have a clear understanding of your role and responsibilities?

No, but it doesn't matter to me

5%I don't know

2%No, but I wish I had

11%

Yes82%

We asked our staff about supervision and roles and responsibilities. Once again, as last year a very high percentage of our staff understand their roles and Page 45 FRC Group Social Report 2001-2002

responsibilities. In response to the question “Do you think that you have clear understanding of your responsibilities” 82.5% (85%, 2000/01) of our staff said that they have a clear understanding of their roles and responsibilities, 11% (14%, 2000/01) said they did not have but they wished they had and 5% (1%, 2000/01) said it did not matter to them.

Which of the following is closest to the sort of supervision you get?

73%

13%

10%5%

I don't have regular supervision: I just ask if I need advice or help

I have regular supervision and I find it helpful

I have regular supervision but I don't find it helpful

I don't have regular supervision: I'd like it to be more formal than it is

73% (59% 2000/01) do not have regular supervision but just ask if they need advice or help. However, 62% said they were confident about getting support from their team leader. 22% neither agreed nor disagreed about being confident in getting support from their manager if they needed it. 16% (12%, 2000/01) disagreed. 67% (81%, 2000/01) of staff also believes that they belong to a supportive team, 19% disagreed with this. Involvement in Decision Making We asked our staff about having their say in decision-making and if their ideas and suggestions are taken seriously. 51%(57%, 2000/01) of staff said their ideas are taken seriously and 57% (68%, 2000/01) are satisfied that they have their say in decisions that affect their work. 30% said they would like greater involvement in decision making, 31% neither agreed nor disagreed with the statement. This represents a challenge for us. The promotion of greater personal involvement is core to our values and is dependant on extending participation for decision-making. Health and Safety Health and safety issues are taken very seriously throughout the Group. Thankfully, we have still had no serious accidents in any part of the business, and the rate of minor incidents is still low. Page 46 FRC Group Social Report 2001-2002

Last year we reported on five key areas that an independent consultant had identified as concerns:

Improve staff training with regard to health and safety issues Check all electrical appliances Replace missing signs, put signs in the right place and remove confusing

signs Have a more active and comprehensive fire prevention policy Improve upon our general housekeeping

We restarted the Health and Safety committee with a representative from each department receiving basic health and safety training, and we have ensured that at least one person from each area of the business is fully qualified in First Aid at Work. We now have eight first-aiders employed throughout the Group. Each new staff member is given an introduction to health and safety as part of their induction programme, where the policies, risk assessments and procedures are explained. All electrical appliances have been tested and all the signs in our offices have been replaced as part of the office refurbishment that took place in 2001, and are now correct and of a satisfactory standard. A new fire alarm system was installed as part of the refurbishment, and subsequently a fire risk assessment took place and a new fire procedure was written. General housekeeping has been strongly promoted as part of caring for our new environment as well as our own health and well being. In the last twelve months we have also updated all of our departmental risk assessments and our Group Health and Safety Policy. In 1999/2000, 65% of our staff were satisfied or very satisfied that their health and well-being was being taken seriously. In May 2001 this figure had dropped to 63%. Now, in 2002, only 59.2% of our staff are satisfied. This is really disappointing given that much more has been done in the last year than in the year before and that we have a very low incidence rate of accidents. We recognise that we have not been good at communicating what our health and safety issues are and how we address them. Perhaps not all staff are aware of the work that has been done. Also, we need to be faster at following up issues that are raised, for example, in risk assessments. And although we now have written procedures for all aspects of health and safety, we need to get better at following them. Next year we are determined to see a rise in staff confidence over health and safety issues. Equal Opportunities and Diversity The Furniture Resource Centre Group strives to be an equal opportunities employer and to encourage diversity. In March 2002, our male/female ratio was 2.3:1. Amongst the 10 (17, 2000/01) people with managerial or supervisory responsibilities the ratio is 2:1 of males to Page 47 FRC Group Social Report 2001-2002

females. None of our Leadership Team or team leaders are from an ethnic background (2, 2000/01) In a city where 8% of citizens are from ethnic minority backgrounds, only 3 % of our employees (9.5% 2000/01) were from ethnic minority backgrounds. In 2001/02, 5 employees who were from ethnic minority backgrounds left the Furniture Resource Centre. We also failed to recruit trainees from ethnic minorities. This can be partly explained by the fact that there is no funding available for recruiting individuals for training from the Toxteth area of Liverpool. We have also have not put a significant energy into this part of the business and clearly we missed the mark that we had set for ourselves to increase our number of staff from ethnic minorities to 6%. We must make more of an effort to communicate the employment and training opportunities that we have to the ethic minority communities in our city. We must give all applicants what ever their background an equal chance. In March 2002, of the six full and shadow Furniture Resource Centre Board members five were white, one black; three were men and three women. Last year, there were seven board members; three white men, three white women and one black woman. We know that the numbers of people from ethnic minorities in our business at all levels should be higher. How to encourage more people from ethnic minorities to apply for work here is a challenge shared by most employers across Merseyside and one that we want to rise to. This year we began to examine how we could recruit more trainees from areas of social exclusion. We still have more work to do in this area and we need to expand this to our permanent workforce too.

FRC treats each other fairly and does not discriminate against a person because of is or her colour, sex or religion

43%

25%

15%

10%

7%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Strongly agree

Agree

Neither agree nordisagree

Disagree

Strongly disagree

percentage of staff

68% (74%, 2000/01) of our staff believes that we treat people fairly and do not discriminate against people because of his/ her colour, sex or religion. If our staff had been treated unfairly by a colleague 33% (44%, 2000/01) would deal with it themselves, 49% (44%, 2000/01) would discuss it with their own or another manager in the group. Page 48 FRC Group Social Report 2001-2002

Many of the issues raised by staff from the feedback they gave in the on their terms and conditions were explored in a series of focus group discussions organised in June 2002. As a result recommendations were made about encouraging staff to become more involved in decision making, conducting a review of supervision and conducting a further training review. Alchemy Our Alchemy programme is now in its second year. We originally launched it to develop the skills and potential of those employees with the potential of becoming high achieving social entrepreneurs. The Chief Executive decided membership of the selected group. Throughout the year members of the Alchemy group attended a variety of courses and events were organised to improve the skills and knowledge of the group. In November 2001, the group attended a residential course and were asked to present ideas for new social businesses. This group was disbanded in the spring of 2002 when it was decided to ask staff to apply for the next Alchemy programme. A total of 11 members of staff from a range of departments applied and were all accepted into the group. They are now attending monthly seminars run by an external facilitator and working on either ideas for new businesses or business enhancements. The programme will culminate with an event in December 2002 when ideas will be presented to the Furniture Resource Centre’s Leadership Team. Worthwhile ideas will be considered for adoption by the business.

Walk a Mile This year we have again as in 2000/01 encouraged our team leaders to spend a day working in other departments and give feedback to colleagues with observation and ideas for improvements. Again team leaders have spent time working on the wagons, half day on reception and half day in production. Whilst their feedback has been very valuable we have not kept formal records of the time and feedback spent walking a mile and must endeavour to do this throughout 2002/03. Our Priorities for 2002/2003

• To implement a business related pay system and values related bonuses for staff.

• Implement a training programme for all staff to meet our business

requirements and the training needs identified through our How’s It Going programme.

• Increase the number of staff who participate in decision making

• Increase the number of staff members recruited from ethnic minorities

from 3% to 6%.

• Regularly communicate to staff on health and safety issues


a.

Objective 5 To treat our customers and suppliers fairly by:

a. Having clear and mutually agreed objectives b. Responding to customer and supplier feedback

c. Keeping customers and suppliers up to date on business developments

Customers We take our customer feedback seriously and have continued to work hard throughout 2001/02 to engage regularly with our customers and suppliers. We heeded the feedback from Bulky Bob’s retail customers about accessibility and noted how we were failing to meet the needs of low-income households at Revive. We also gathered feedback directly from householders in Liverpool who had had a Bulky Bob’s collection. All of this was to ensure that we are meeting our customers’ needs, delivering a good service and running our business well. Our One Stop service Sales and Marketing Team have continued to run workshops across the UK for new customers. Throughout 2001/02 they ran 15 customer workshops explaining our services and the benefits of offering furnished accommodation. Over 150 customers attended these workshops. Again, as in 2000/01 we gave a consultancy service writing procedures to enable customers to offer furnished accommodation. We did this for six of our One Stop customers. Often potential customers do not offer furnished accommodation because of a lack of in-house skills, so we seconded one of our Sales Team into the Housing Administration Department of South Liverpool Housing. Whilst there she gave specialist help and support to enable them to set up a furnished tenancy scheme. She worked with them for 3 weeks over a 4-month period. As a result they have continued to offer furnished accommodation to their tenants. In 2000/01, we had asked our one-stop customers to give us marks out of 10 on a regular basis. Getting 8 out of 10 was our target for 2001/02. We have let this process slip and need to resurrect it in some practical way. The Logistics Administration Team and the Logistics Department worked hard to improve resource planning. This was helped by the investment in a new database enabling us to reduce our credit note dilution by 1%.


As a result of all this effort in May 2002, our one-stop customers gave us the following feedback on our 2001/02 services.

• 84% (54% most of the time, 30% always) of our customers said that we acknowledged their orders within 24 hours.

• 73% said that the courtesy of our delivery staff was excellent or very good whilst 22% said it was good. (86% 2000/01)

• 95% ( 49% most of the time, 46% said always) of our customers said that their queries are responded to promptly.

• 30% of our customers said that unpacking of furniture items was carried out to an excellent standard, 46% said it was to a good standard.

• 47% said our sales and marketing work was excellent, 39% said it was good.

Our customers are not just registered social landlords and local authorities. At Bulky Bob’s they are Liverpool City Council and householders and at Revive they are high street shoppers and referral agencies and their clients. In last year’s accounts we set ourselves a target of gaining direct feedback from householders using the Bulky Bob’s service. In May 2002, 100 Bulky Bob’s householders were telephoned to ask them what they thought of the service. We had a 37% response rate, of these 87% understood that Bulky Bob’s would try to re-use and recycle as much waste as possible. 57% said that our drivers were very polite or polite. A further 43% gave no answer because they were out when the collection took place and therefore could not comment. The main customer on the bulky household waste collection contract is Liverpool City Council. Members of the Bulky Bob’s Team met Council Officers on a regular basis. We asked for feedback from both the Waste Management Department and also Liverpool Direct. Liverpool Direct did not reply to our request but the Waste Management Department gave us the following feedback that Bulky Bob’s is a company that is easy to do business with. It always adheres to collection days and the logistics and administration staff is very willing and helpful. In May 2002, we also surveyed 100 customers at Revive to ask them about our service in customer care. 63% said that they knew that Revive is trying to offer help to those most in need. Our customers also made the following comments about Revive. 66% said that the store was bright and friendly but there is still room for improvement because they also said the following comments. “Some of the items were a bit tatty.” “Improved since its moved up London Road.” “Top marks.” “There was rubbish blowing in off the street.” Page 51 FRC Group Social Report 2001-2002

“We were encouraged to walk around and made to feel comfortable. It has improved.” “Much better on London Road, more convenient than the Dock.” Of the 100 customers questioned, 53% of them said that our staff were helpful and polite, the remaining 47% were not served by a member of staff and could not comment. Suppliers Our intention is still to spend locally and use our growth opportunity to support the Merseyside economy and other local social businesses. In 2001/02, 10 suppliers were from the North West and of these 8 were from in Merseyside. This year we have increased our suppliers in the social economy from one to three. This year we also set up a contract with Shelforce who are another social firm but are based in Birmingham. They also employ people with physical and mental disabilities. They were set up by Birmingham City Council Social Services to manufacture a range of product including bed bases. They had lost their customer base in this area but our recent custom with them has enabled them to resurrect this part of their business. We have continued to offer more business to our second social enterprise supplier, Dove Designs. They are also our neighbours here in Liverpool and supply us with the frames for our range of upholstered furniture. They employ people with mental health problems. Unity Enterprises is a social firms organisation based in Paisley in Scotland. We have been in discussions with them since late 2001 and they began have been making tables for us in April 2002. They employ people with physical and mental disabilities. Our trade with them is helping them build a manufacturing business as we are providing the market and the persuasion for them to do this. One of our targets for 2001/02 was to maintain a high level of feedback on how easy and fair we are as a company to do business with. In May 2002, we asked 10 of our One Stop suppliers to give us feedback on how clear we are on agreeing objectives with them, how well we respond to feedback and also how well we kept them up to date on business development. 7 of them (70%) responded. Of these:

• 86% (100%, 2000/01) said that we worked with them to set clear and mutually agreed objectives.

• 100% (93%, 2000/01) said that they had an opportunity to give feedback on their working relationships with us.

• 86% (86%, 2000/01) said that we listened to their suggestions. • 71% (86%, 2000/01) said that we are easy to do business with. • 71% (79%, 2000/01) said that we respond to their feedback.

They also made the following comments: Page 52 FRC Group Social Report 2001-2002

“I believe we have built a mutually beneficial business partnership founded on quality service, honesty and trust.” “We have regular meetings and dialogue with your personnel.” “We have a mutual working relationship with deliveries and understanding replies to our order queries.”

We meet regularly with our suppliers to discuss price, product and service. In December 2001, like in December 2002, we rewarded one of our suppliers for their support. We asked all our staff who deal with one-stop suppliers and our Leadership Team to vote for Supplier of the Year. They voted for Universal Logistics Services (ULS) for their commitment to our social aims and objectives. Their flexibility, their service and products and their willingness to improve their own business with the increasing demands that we as a customer had put upon them over our 6-year long relationship with them. ULS provide us with starter packs for tenants, items such as kitchen utensils and bedding.

At Christmas 2001, we again organised our annual dinner for our customers and suppliers. Sharing with them our progress and successes over their year and allowing them to meet their peers. Once again this event was a great success and we intend to continue it.

In December 2001, we conducted a product review, but this time not with customers as in December 2000 but with suppliers. We looked at product, price and service. As a result we negotiated better prices and came up with the idea of a children’s range of furniture. We also specified design modifications to our range of curtains based on feedback from customers. We value our good relationships with our suppliers and we are committed to keeping them up to date on our business developments through regular meetings with them throughout the year. The comments they have made about our dialogue with them show that they appreciate these good working relationships. Our Priorities for 2002-2003

• Introduce a scoring system so customers can give feedback on our customer service

• Maintain the high level of feed back from our customers and our suppliers

on how easy and fair we are as a company to do business with. • • Gain direct feed back on the Bulky Bob’s service from 100 householders

throughout the year who have used the collection service

• In face to face conversations with suppliers formally record feedback on our relationship with them


b.

Objective 6 To operate good environmental practices in the running of our businesses by:

a. Complying with relevant environmental legislation

b. Monitoring all environmental impacts of our business

c. Minimising waste arisings, seek to recover, reuse and recycle as much as is economically practical and ensure that the remainder is disposed of responsibly

d. Influencing suppliers of services and goods to reduce their own impact upon

the environment

e. Enhancing awareness of relevant issues amongst, staff and others who have an interest in our business

In 2001/02, we have given a greater commitment to the environmental performance of the Group and a lot of thought to setting up an environmental management system. In August 2001, a postgraduate student on placement produced a base line study of the Group’s environmental impacts for the year 2000/01 with us. Another postgraduate student also investigated the environmental impacts of our one-stop service products. The results of these reports made us think deeply about how we could improve the company’s environmental performance and engage with more of our suppliers on these issues. The environmental impact of our activities can be considered in three ways. Firstly, the impacts of our manufacturing processes and the One Stop furniture packages that we supply. Secondly, through our recycling work at Bulky Bob’s and thirdly through our administration work. More details of our environmental impacts in 2001/02 and can be found in our separate Environmental Performance report 2001/02. Mostly headlines have been reported on in this section. The details of our recycling work can be found in section 3 of these accounts were we report on Bulky Bob’s recycling activities. Manufacturing Processes We are regularly asked, when we are tendering for contracts, by our local authority and registered social landlord customers to supply details, about our environmental management systems and the sustainability of our products e.g. where does the timber in our sofas come from. However, we fear that contracts are almost always awarded on price, quality of goods and service and that the environmental credentials of the company and our products is not the major factor in deciding to buy from us. Despite this we are committed to improving our performance in this area. Page54 FRC Group Social Report 2001-2002

-

In 2001/02 we worked with two of the three suppliers who provided us with wooden furniture. This was to establish the sourcing of wood used in the manufacture of our sofa frames and dining room tables and chairs. Dove Designs who make the sofa frames source wood from sustainably managed Scandinavian forests. HJ Berry’s who manufacture tables and chairs source wood from sustainably managed Scottish forests. In February 2002, as a result of national publicity scare about flame-retardants, we verified that the brominated flame retardant penta-BDE, suspected of being carcinogenic, is not used in the fabrics that we use on our sofas. We addressed the issue of waste minimisation in the Production area. Pre-cut foam is bought in resulting in zero foam wastage. Fabric is cut and to size in our Production area and off-cuts have been minimised as far as is practicable. Greening Our Supply Chain Last year we set a target of working with our suppliers to improve their environmental performance. In January 2001, we signed up as part of the Envirowise Pilot Programme on supply chain management. We joined eight other national companies who were committed to improving their own environmental performance as well as those of their key suppliers. For over 5 months Furniture Resource Centre hosted five monthly workshops to which, in the spirit of partnership, we invited our suppliers and those who were local to us but were suppliers of some of the eight other pilot companies. These workshops were free of charge and gave our suppliers and us very practical advice on ways to save money. The workshops also allowed us to have an informal dialogue on environmental issues with our suppliers. Envirowise also offered either a free Fast Track or Energy Action visits. These were on site reviews of suppliers’ businesses by an expert consultant to offer suggestions to improve performance, minimise waste and save money. Our suppliers were not all able or interested in attending all the workshops. When surveyed in May 2002 about this they cited reasons of non-relevance or being too busy with other things to attend the events. Only two of the seven who replied stated that they had environmental policies. Some also stated they saw these issues as an on-going project and would be happy to attend relevant workshops. Only 3 had taken up the three free Fast Track visits. One stated that they had not found the fast track visit useful at all. 6 out of the 7 who replied stated that as a result of the workshops they had not been able to realise financial savings. It was not all negative because as a result of the workshop on waste and packaging we began discussions with Brave Designs who supply us with wardrobes. They, like us are keen to reduce packaging waste and have come up with an idea of a re-useable form of packaging. We are in discussions with them to see how we can fund this packaging. We need to decide how far we wish to encourage our suppliers on greening the supply chain. There is clearly more work that we could do with them on issues of raw materials, product durability and disposal. As a company we have not yet decided how far to take this. We must decide on this in 2002/03. Page 55 FRC Group Social Report 2001-2002

Our recycling work at Bulky Bob’s has already been discussed in section 3 of these accounts where we report on the tonnages collected, reused and recycled and the destination of the items that we rescued from the waste stream. We have also outlined some of the efforts that we have made to improve our recycling performance. Another target for this year was to undertake a baseline study of our environmental impacts. This was completed in August 2001 to report on the impacts of our activities in 2000/01 and again in June 2002 to report on impacts in 2001/02. Outlined here are some of the findings. Due to changes on our operations and also the fact that some data is not available it has not allowed comparisons in all operational areas for 2000/01 and 2001/02. We also did not, as we had planned, implement an Environmental Management System. We have, however, done some work on setting out Key Performance Indicators for 2002/03. This is outlined later in this section. Energy In September 2001, all our office-based staff moved onto one site for the first time in several years. The number of office staff based at our Atlantic Way office rose from 17 to 28 as a consequence. We therefore anticipated that the move would result in an increase in electricity consumption due to the corresponding increase in personal computers (PCs), printers and other related electrical equipment. In January 2002, through the Environment and Energy Help-line, in January 2002 a free consultancy visit recommend energy saving measures throughout the Group. As a result, the following steps were taken:

• All staff were encouraged to switch off lighting when areas are not in use, particularly in the toilets and the canteen.

• Timers were fitted to the air compressors in Production and central heating

system.

• The air compressor was fully serviced and air leakages repaired.

• Air-conditioning units in the Atlantic Way site offices were set to an optimum temperature of 24°C.

• All office staff were encouraged to switch off personal computers (PCs) and

monitors completely before leaving the office. However, this policy needs to be extended to cover any period over 30 minutes spent away from desks.


The graph below shows a comparison of energy costs for the three Group companies over the two years 2000/01 and 2001/02. It has not been possible to compare Atlantic Way’s electricity consumption for 2001/02 to 2000/01 in kWh. This is because under the contract we have with Electricity Direct, annual consumption is estimated and we pay equal monthly instalments throughout the year. The electricity used is then reconciled with the amount paid at the end of the contracted year, and in August 2002 we have still not received confirmation of our actual consumption. We aim to switch suppliers in April 2003 as soon as our contract can be cancelled. We have also begun reading our electricity metre on a monthly basis. Whilst electricity costs across our Furniture Resource Centre Atlantic Way Building and Bulky Bob’s have remained more or less the same, Revive’s has increased in 2001/02 dramatically. As Revive was closed for the eight months April to November 2000 due to a fire, comparison between the two years is unrepresentative. Bulky Bob’s have only been using gas to run its warehouse heating system since January 2001, there is therefore a net increase of 100% on the previous year’s consumption

£0

£500

£1,000

£1,500

£2,000

£2,500

£3,000

£3,500

£4,000

2000/01 2001/02 2000/01 2001/02 2000/01 2001/02 2000/01 2001/02 2000/01 2001/02 2000/01 2001/02

Electricity Gas Electricity Gas Electricity Gas

FRC Bulky Bob's Revive

A comparison of electricity and gas costs 2000/01 – 2001/02 Page 57 FRC Group Social Report 2001-2002

Revive’s electricity bill is almost as high as Atlantic Way’s, with only three staff employed as opposed to sixty nine. This is partly due to the retail environment where a large area has to be kept well lit at all times. Our tenants in the store’s basement used electric heaters throughout the winter. More economic heating needs to be installed to reduce energy bills next winter. A new gas heating system has been fitted in our Production department because the old one was inadequate and the area was under heated. Although we consciously chose an energy efficient system, gas consumption is still expected to rise over the next winter. Extra care must be taken to keep all doors in the area closed to maximise energy efficiency. We now have air conditioning in the offices at Atlantic Way. Although it has been set to the optimum temperature and staff have been made aware of it’s most efficient use, this is still expected to increase our electricity bill next year. Transport

The Furniture Resource Centre One Stop furnishing service has two 7.5 tonne vehicles and two 12 tonne vehicles delivering nationally five days per week, plus two smaller vans used by curtain fitters. Revive has a dedicated 4.5 tonne vehicle for customer deliveries in and around Liverpool. Bulky Bob’s manages it and unfortunately separate records are not kept for the fuel consumed by Revive’s delivery work. Bulky Bob’s has five 7.5 tonne vehicles that perform household collections throughout the city of Liverpool five days per week. All the above vehicles use diesel. We also have four company cars that run on unleaded petrol, although one of these is rarely used for business purposes.

Annual usage (l) Annual cost (£) Annual CO2 emissions (Kg)

Unleaded petrol 2,480.42 1,614.31 5,729.77

Super unleaded petrol 70.54 51.68 162.95

FRC diesel 42,498.51 27,439.05 113,896.01

Bulky Bob’s diesel 20,945.96 13,495.56 56,135.17

Total 65,995.43 42,600.60 175,923.90

Usage, cost and emissions of vehicle fuels for 2001/02 Business use of unleaded petrol in our company cars has decreased from 4,263.41 litres in 2000/01 to just 2,550.96 in 2001/02. Diesel use across the Group has increased by 78.4% against the baseline figure produced in August 2001. This seems disproportionate as our One Stop service deliveries account for 67% of diesel use, yet sales increased last year by only 8%. Reasons for this are that there were data collection issues in the August 2001 report on 2000/01’s performance. This meant that the baseline figure might have been Page 58 FRC Group Social Report 2001-2002

underestimated in the first place. Also, in 2001/02 our business with Sandwell and Birmingham local authorities in the West Midlands increased by £130k. Birmingham City Council became a regular customer in November 2001. This has made diesel consumption increase at a disproportionate level to sales. Our new Logistics manager has introduced an improved and cost driven delivery planning. We deliver to the same areas on the same day, thus reducing journey numbers and mileage. Bulky Bob’s performed 45% more household collections in 2001/02 than in the previous year, which accounts for another rise in fuel consumption. We are simply driving longer distances on our One Stop service and more local journeys on the Bulky Bob’s service. CO2 Emissions Carbon Dioxide is one of the main greenhouse gases contributing to global warming. The Furniture Resource Centre Group’s contribution to CO2 emissions comes from electricity and gas consumption, and from transport related emissions. The table below shows the total CO2 emissions for each of the Group companies in 2001/02.

Total CO2 emissions (Kg)

CO2 emissions electricity & gas (kg)

Transport related CO2 emissions (Kg)

FRC Not known Not known 113,896.01

Bulky Bob’s 68,318.31 12,183.14 56,135.17

Revive 29,209.39 29,209.37 Not known Group CO2 emissions 2001/02 To enable us to measure performance improvements in the future, and to compare emission levels with industry best practise, CO2 emissions have been normalised using two different measures: one for electricity and gas emissions and one for transport emissions. In the table above emissions from electricity and gas consumption are shown per square metre of floor space, and transport related emissions are shown as an average per call made i.e. the average emissions per home furnished by the Furniture Resource Centre, and per household collection for Bulky Bob’s. Our CO2 emissions at Bulky Bob’s show a much higher proportion come from our transport activities. It has not been possible to compare Atlantic Way’s electricity consumption for 2001/02 to 2000/01 in kWh. This is because under the contract we have with Electricity Direct, annual consumption is estimated and we pay equal monthly instalments throughout the year. The electricity used is then reconciled with the amount paid at the end of the contracted year, and in August 2002 we have still not received confirmation of our actual consumption nor have we kept regular meter Page 59 FRC Group Social Report 2001-2002

readings. We aim to switch suppliers in April 2003 as soon as our contract can be cancelled. The energy efficiency improvements described in the energy section of this report must be reinforced to staff in 2002/03.

Historically the One Stop service delivery schedule has been very customer led, in that we would deliver on whichever day a customer requested rather than when it made logistical sense. We are now managing our customers to a greater extent and restricting deliveries, as far as is practicable without compromising service, to days when we are in that region. Not all the required data is available for the year 2000/01, so we have no benchmark figures against which to compare this year’s performance.

The One Stop service and Revive’s fuel invoices are not separately recorded, and during 2001/02 various FRC and Bulky Bob’s vehicles were used for Revive deliveries, making it impossible to calculate fuel consumption and therefore transport emissions for Revive. This also means that both FRC and Bulky Bob’s transport figures will be slightly over-estimated. FRC’s diesel fuel use in 2001/02 was higher than in 2000/01 (see section on Transport) as we delivered to customers in the Midlands four days per week. This will obviously had an adverse impact on CO2 emissions. This will be resolved when FRC’s proposed Birmingham operation begins to service these customers, but the location of any future new business will have a significant effect on emissions. Paper

Total reams per year

Total usage (reams/person/year)

Usage increase on last year

Annual cost (£)

Cost per person (£/person/year)

Cost per person increase on last year

Total 852 9.3 128.5% 6019.52 65.43 170.3%

Group Paper use 2001/02. 1 ream of paper = 500 sheets. Despite an overall decrease in office-based staff throughout the Group of 4.4% paper consumption has increased by 89% on 2000/01. According to Conservatree3, 1 ream of paper equates to 0.6% of a tree, so 166.7 reams is equivalent to one whole tree. The Group purchased 852 reams of paper in 2001/2002, the equivalent of 5.1 trees. In 2000/01 this figure was 2.7 trees.


3 www.conservatree.com

However, this information is based on the amount of paper purchased, which is misleading. Large stocks of letter-headed paper, compliment slips etc were purchased when the Group logos were updated in September 2001, and much of this, although appearing on invoices for last year, has not yet been used. Our photocopy paper is virgin, however it is ECF approved (chlorine free) and made from wood from sustainable forests. All our letter-headed paper is recycled from 100% post-consumer waste from local waste streams, in a chlorine free process. Usage of plain paper has also increased significantly, and this cannot be attributed to bulk purchasing. Double-sided printing and copying should help to reduce this problem but is clearly something that our staff are not doing despite being encouraged to do so. We have been recycling all waste paper since July 2001. Designated bins are situated in each office and the waste is collected by Liverpool based social enterprise Energywise recycling, once monthly. So far we have recycled an estimated 2,028Kg of paper. Other Office Consumables Empty toner cartridges are returned to the manufacturer by post for recycling. In September 2001 we switched to Ecover cleaning products – plant-based cleaning products that contain no petrochemicals and are therefore safe to use, leave no unnecessary chemical residue and have minimum environmental impact. All Ecover products contain < 5% non-ionic surfactants. Our cleaner has reported that her eczema has improved considerably since using these products. Waste The main waste streams at the Furniture Resource Centre are from our Bulky Bob’s work, our office waste paper and waste packaging waste from our One Stop delivery service that unpacks furniture for our customers and upholstery production waste. The Bulky Bob’s service in 2001/03 collected 2729 tonnes of unwanted bulky household waste. Of this we reused and recycled 607 tonnes (22%). The remainder was sent to landfill. It should be noted that before the Bulky Bob’s service began in June 2000 all the waste collected was sent to landfill. Staff are encouraged to reuse/recycle all waste paper; this has already been discussed in the section on paper and consumables. The Logistics department has two eighteen cubic yard skips for the disposal of mixed waste. Planet Recycling uplifts these on request. In the financial year 2001/02:

• The One Stop service provided an unpacking service on 1357 deliveries

• The approximate weight of waste uplifted was 54.5 tonnes


• A minimum of 30 tonnes of this is estimated have been packaging waste (a breakdown of packaging used is shown in the graph overleaf 60% of the waste is recycled by Planet Recycling

57%

22%

9%

12%

0% 10% 20% 30% 40% 50% 60% 70%

paper / cardboard

polythene

polystyrene

wood

Proportion of each packaging type of total waste (Kg) 2001/02)

The remaining waste consisted of broken wooden storage pallets and other general warehouse waste. The Production team use an eight cubic yard container supplied by Cleanaway, which is uplifted weekly. This waste consists of packaging from raw materials, fabric off-cuts and general production waste. They also use the Logistics skips if their own container is full. We also have a vending machine for canned drinks and two water coolers with plastic cups provided on site, but no provision for recycling is currently made.


0

10

20

30

40

50

60

70

80

90

100

2000/01 2001/02 2000/01 2001/02

Warehouse Upholstery

Ann

ual n

o. u

plift

s / t

onne

s of

was

te

£-

£1,000

£2,000

£3,000

£4,000

£5,000

£6,000

Ann

ual c

ost o

f was

te d

ispo

sal

Uplifts Tonnage Cost (£)

Waste disposal amounts and costs for 2001/02. Despite an 8% increase in the One Stop furnishing service sales in 2001/02, the number of skips uplifted from the warehouse increased by just 3.3%, and there was no increase at all for Upholstery. Although consumption of water has increased by 209% due to the combination of office staff onto one site, use of plastic cups has increased by just 66.7% in comparison suggesting that staff are reusing plastic cups or non-disposable cups instead. Packaging is our biggest waste issue. An estimated 30 tonnes was created in 2001/02 by Logistics alone. We intend to address this in 2002/03 by investigating the use of reusable packaging for the bedroom furniture we supply. This is currently packaged in cardboard and shrink-wrap. If this proves cost effective and is adopted, we will remove 6.6 tonnes of cardboard and 0.7 tonnes of shrink-wrap from the waste stream, based on last year’s sales. We have already started to research the separation and baling of waste at from our One Stop furnishing service. This could be to be sold or donated for recycling. If this is adopted we could remove up to 16.5 tonnes of paper/cardboard and 6.2 tonnes of mixed plastics from landfilled waste, based on last year’s sales. Also all plastic cups and aluminium cans are disposed of to landfill. A recycling initiative must be put in place in 2002/03.


Water United Utilities supply water to all three Group sites. The table below compares the consumption and cost of our water supply during 2000/01 and 2001/02, along with a normalised measure to allow for varying staff levels between the two years.

2001/02 consumption (m3)

2000/01 consumption (m3)

2001/02 Consumption per person (m3)

2000/01 consumption per person (m3)

Cost of water supply 2001/02

Cost per person

FRC 1435 1242 incomplete data

20.80 17.49 incomplete data

£1,916.52 £20.83

Bulky Bob’s 109 Not available 5.45 Not available £173.45 £8.67

Revive 63 36 21.00 7.20 £130.13 £43.38

In 2001/02 both Atlantic Way’s and Revive’s water consumption increased. It should be noted that the 2000/01 figures did not include an annex building that we no longer occupy. Revive’s by 75%, but this is because the store was closed for eight months in 2000. No comparison is possible for Bulky Bob’s, as the first water bill was not received until January 2001. A good practice office building should use no more than 7.7m3 of water per person per year. At our Atlantic Way site we use more than twice this amount. On this site we have an Upholstery workshop and a Logistics team are based there. Although our production processes do not use water, a considerable amount is used for washing vehicles. Both the One Stop service and Bulky Bob’s possess a power hoses for cleaning our wagons. Clearly we need better control and measurements on many aspects of our environmental housekeeping matters. This should be a simple and clear Environmental Management System. Implementing an Environmental Management System As a company we have considered implementing ISO14001 or EMAS. We believe that neither of these systems will fit with our culture as they are overly bureaucratic for a company of our size and type. We prefer to use a set of Environmental Key Performance Indicators (KPIs) some of which we plan to report on a monthly basis. We believe that KPIs will also be easier for our staff to relate to and report on.


In March 2002, we worked with an external consultant to draw up a set of 28 indicators for 10 key areas of our work. Some of them we reported on immediately, the detail of this is found earlier in this section but some will take 6 months to report on. The KPIs cover the following areas: legal compliance, cost savings, training and development, waste, transport, packaging, product specific issues, product use and supplier and client engagement. This list is not exhaustive and will need more work

on in 20002/03. We also need to research and report on the pollution and toxicity impacts resulting from our work. Staff Training In 2001/02 we gave our staff minimal information and training on our environmental issues. With the move to the new building in September 2001 some energy and paper saving measures were highlighted to staff. Clearly this needs to be addressed in 2002/03 Our Priorities for 2002-2003

• Decide on a clear approach to our suppliers on measuring their environmental performance

• Introduce a set of Environmental KPIs for our performance across the

business

• Introduce a monthly reporting system for the KPIs

• Research areas such as pollution and toxicity impacts that to date have not been investigated

• Design and implement a staff training programme on environmental issues

and KPIs


Objective 7 Influencing the shape and development of social policies relevant to the achievement of the Furniture Resource Centre’s charitable purpose by:

a. Lobbying of local, regional and national decision makers b. The development and promotion of best practice in setting up and running

social businesses c. Active involvement in key networks shaping the development of the social

economy
Our ongoing success and the development of a commonwealth of social businesses in Liverpool have meant that, once again, we have informed and influenced policy makers. Their decisions affect our ability and others in the social economy to achieve social and financial goals. In 2001/02, we have continued our local, regional and national lobbying, saw our best practice programme the Cat’s Pyjamas go from strength to strength, and also been active in networks to shape the social economy. Last year we set ourselves several targets.
• Continue to help shape the direction of the Coalition of Social Enterprises. • Continue our leadership role in the Merseyside ILM network. • Maintain our involvement with Liverpool City Council’s Social Economy

Working Party. • Secure three year’s funding from the Phoenix Fund for the development of

the Cat’s Pyjamas programme. This year we presented at 13 conferences to a range of audiences, from the DTI to the YMCA to the Social Enterprise Unit at Downing Street. We were formally consulted by the DTI on the development of the social economy and spoke at their “21st Century Business Conference”. In February 2002, our Chief Executive met with Tony Blair along with other social economy and co-op leaders to discuss the development of the social economy in the UK. Michael Heseltine, who was in Merseyside 20 years on from the 1981 riots, also visited us. We occupy a site that was one of the first to be developed with the new funding that poured into Merseyside after the riots. We also came twelfth in the New Economic Foundation’s Inner City 100 initiative. This means that for the year 2000/01 we were the twelfth fastest growing inner city business in the UK. In this list of 100 we were also the highest-ranking social economy business.


In June 2001, our Chief Executive, Liam Black, won Ernst and Young’s Northern Social Entrepreneur of the Year, and later in the year our social accounts for the year 2000/01 were shortlisted by the Association of Chartered Certified Accountants (ACCA) in their Social Reporting Awards.

We had 12 articles in the national and regional press. We also continued to feature regularly in New Start and Regeneration magazines, which are now well established as the trade journals of the UK’s social economy. Locally we have continued to work hard to strengthen the development of the social economy on Merseyside through the Intermediate Labour Market Network (ILM), our involvement in Liverpool Plus and promoting successful social businesses through The Cat’s Pyjamas. We established the ILM Network in 1999 and we were elected to chair it in 2001 and again in 2002. Membership for 2001/02 stands at 16. The Network is seen as a formal consultation body and is formally represented on Liverpool City Council’s Social Economy Working Group. The Network was consulted by the NWDA in March 2002 about the setting up of the Merseyside Social Enterprise Partnership, which is funded by the North West Regional Development Agency to promote the development of the social economy in the region. Our Chief Executive has also, as Chair of the ILM Network, attended development discussions with Liverpool City Council on its plans to set up an arms length agency to foster growth and development in Liverpool’s social economy. Launching this in the autumn of 2002, Liverpool Plus will increase the number of new, and the capacity of existing social enterprises in the city. Our social accounts of 2000/01 reported on the number of visitors we had at the Furniture Resource Centre. This year due to the high demand and our increasing business needs we have encouraged visitors wanting to hear our story and learn from our development, to become participants in The Cat’s Pyjamas programme. The Cat’s Pyjamas We launched The Cat’s Pyjamas in March 2001, throwing open our doors for a two and a half day residential study programme to share our successes, our learning and our mistakes along with 5 other social businesses on Merseyside. The purpose of The Cat’s Pyjamas is to immerse aspiring social entrepreneurs, funders and policy makers in the realities of running a social enterprise. We offer a warts and all approach. In 2001, we secured a Phoenix Fund grant and between March 2001 and April 2002 we were able to run 4 events, each with 25 participants from voluntary and community groups, funders, policy makers, local authorities and business advisers. Discussions have involved definitions of social businesses, the role of social business in regeneration and visits to a series of Liverpool based social enterprises to learn from their mistakes and successes. We are convinced of the success of these events. In May 2002, we asked participants who had attended Cat’s Pyjamas events from March 2001 to March 2002 to comment on what they had learnt whilst on The Cat’s Pyjamas programme. Participants came from a wide range of backgrounds, from voluntary and community groups (28%) to social businesses (13%) to funders (6%) to media (3%) and policy makers (6%). Page 67 FRC Group Social Report 2001-2002

We asked participants to tell us three things that they had learned about social enterprise whilst on the Cat’s Pyjamas and that had stuck with them. Here are some of the things they said: “How social enterprise works and fits in.” “How planning is essential.” “It is possible to get away from grant dependency. It’s probably easier to do in a large Met. (sic). Area.” “Social entrepreneurs have to be ruthless business people.” “Social enterprises are like normal businesses.” “There is a wide range of social enterprises.” “There is lots of scope in the current climate for social enterprise.” “We can’t all have Rolls Royce and Littlewoods on our Board.” In April 2002, we took 20 key decision makers from the DTI, the Small Business Service, The Co-operatives Unit and a variety of social businesses to visit social enterprises in America. We called this The TopCat Tour. They spent a week learning lessons from some of the USA’s longest established and most successful social enterprises. TopCat also aimed to strengthen the network of key UK decision makers facilitating forward thinking discussions on the development of the social economy. We are now making plans for another TopCat Tour in 2003 to the USA. Influencing Policy Development In May 2002, we asked 110 influencers and policy makers (social enterprises, politicians, funders, regeneration agencies, ILM network members) how effective and influential the Furniture Resource Centre was in terms of the development of the social economy, ILM delivery and policy development, delivering salaried training, recycling and articulating for the potential and limitations of the social enterprise model. We had a 27% return rate (34%, 2000/01). They said the following:

• 88% said that they were very clear or clear about Furniture Resource Centre’s mission and plans.

• 100% said that they understood what being a social business meant. • 69% said that Furniture Resource Centre was very effective, or effective

and influential, in influencing the social economy in Liverpool / Merseyside.

• 73% said that we had been very effective and influential or effective and influential in developing the UK’s social enterprise agenda.

• 66% (65%, 2000/01) said that we were very effective or effective in the development of ILM delivery and policy development.


• 89% (78%, 2000/01) said that we were very effective or effective in the delivery of salaried training for unemployed people.

• 77% (82%, 2000/01) said we were very effective or effective in the delivery of best practice in recycling services.

• 88% said we were very effective or effective in the production of social accounts.

• 81% said that we were very effective or effective in getting furniture to people most in need and offering training to unemployed people.

People also made the following comments about the Furniture Resource Centre. “Could be more associated with its immediate area in the Dingle.” “I like the way Furniture Resource Centre operates as a business rather than relying on grants. Although you may be not for profit – you are also not for loss.” “I also have concerns about the recycling rates for the Bulky Bob’s operation.” “Just a little too much hype but the reality is very good as well.” “Only that it had been noted that Furniture Resource Centre / Cat’s Pyjamas criticise grant dependent agencies – yet it put in a substantial bid via NRF.” “They challenge both mainstream business and the traditional voluntary sector and are mighty tough on banks, other lenders, the co-ops, local and central governments, but do it with such style and wit they lose no friends and influence thinking.” Overwhelmingly we have had very positive feedback from our influencing stakeholder group. There has also been negative feedback. Even when this is factually incorrect it is important learning for us, e.g. one respondent believed that we had put in a bid for NRF funding when it was in fact Liverpool City Council who had put in the bid to generate funding to pay for the Bulky Bob’s service. Our Priorities for 2002-2003

• To take up opportunities with the Social Enterprise Unit to shape the delivery of Government strategy

• Continue our leadership role in the Merseyside ILM Network

• Secure DTI backing for the national Cat’s Pyjamas programme

• Launch the national Cat’s Pyjamas programme


Rewarding Our Values In 2001/02 we decided to be much more systematic in articulating and deliberately building the culture of the organisation. We did not want a culture created around the personality or beliefs of the organisation’s leadership. And, given the high level of people turn over through the ILM programme building a culture around the shared history is not possible. We decided to build the culture around the shared understanding and commitment to a set of values that we define as beliefs in action. During this year we have endeavoured to embed the values in every aspect of the business and to encourage, acknowledge and incentivise behaviour and commitment which is in alignment with our aspiration of being a brave, creative, professional and passionate group of people. Such culture building is highly unusual in British SMEs and particularly in the not for profit sector. A large part of this year’s strategy therefore has been to educate ourselves about what a values culture looks like and to invent and normalise a shared vocabulary about our values. Recruitment Attracting and recruiting people who are prepared to buy into and help create the culture is a priority. So all of the people recruited this year have been through a selection process that explicitly articulates the importance of our values and attempts to draw out the beliefs and passions of the applicants. Feedback from people on this – both those who have succeeded in being appointed and those who have not, has been very positive. Whilst finding the process very different to other selection procedures they have experienced in other companies, people have expressed enjoyment of the process but also an appreciation of having the opportunity to understand this company better and to speak from the heart about themselves and what is important in their lives and career aspirations. Staff Values Awards We began this year to acknowledge and reward successful performance against the values. Each Team Leader can give a small amount of money to individual employees who have done particularly well. Work stops for a few minutes while a little speech is given, the envelope and cash handed over with a round of applause given. The envelopes are pinned up on a public notice board so that everyone can see what people have done. Throughout 2001/02 we awarded 17 members of staff for their values performance. Five were given awards for professionalism, 3 for passion, 4 for bravery and 5 for creativity. Annual Values Awards For a second year we have sought to identify and celebrate our most passionate, creative, brave and professional colleagues. All members of staff were invited to nominate in each category and all nominations were considered one by one by a panel of judges drawn from across the company and a non-executive director. One member of staff was given an Employee of the Year award because he had consistently demonstrated our four values throughout the year. There was a high Page 70 FRC Group Social Report 2001-2002

degree of honesty and fair mindedness in the process that culminated in the judges voting secretly for the award winners. Awards were unveiled at our summer event in July 2002. Staff Feedback The feed back from staff through the social audit questionnaire and focus groups was encouraging, insightful, very varied and challenging. Staff made the following comments: 63% (68% 2000/01) of respondents agreed that, as a company, “the people here are passionate and really believe in what we are doing to help low-income families and unemployed people.” 66% (72% 2000/01) of respondents agreed that “as a company we are creative, we come up with good new ideas and find clever ways of dealing with problems.” 66% (76%) of respondents agreed that, as a company, “ are professional, the quality of what we do is consistently high and we are always trying to improve.” 58% (69%) of respondents agreed that, as a company, “ are brave, we face up to problems, we’re not afraid to take risks and admit when we are wrong.” Staff also made the following comments on our values: “There needs to be more work done on how we communicate the values to staff.” “We have to accept that not everyone can or wants to display the values but still do a good job.” “There is still confusion over which are the values and actions that are over and beyond a person’s job and those that are an integral part of it. I believe the latter is far better and far more advisable.” “I believe strongly in the values culture and feel sure that most colleagues do too. I do think, however, that staff at the grass roots level feel intimidated by the weight that the four values carry. I certainly believe that the “How’s It Going 2002” was too intense for staff with less responsible, more routine, jobs. Next year I think a more distinct two-tier system may be better.” There is a strong support for the values from a large majority of employees but there are clear differences in attitude along lines of class, gender and seniority. The independent facilitator of the focus groups, Paul Jones of Liverpool John Moores University, concluded, “The values of the company are important to Furniture Resource Centre employees. These values make a real difference to the personal motivation and commitment of employees. There was evidence, for example, that those people who had decided to remain at Furniture Resource Centre, despite thinking that they could get better terms and conditions elsewhere, were influenced to stay because of the values they experienced within the company.” Paul’s work though did bring to the surface some disquiet with regard to how those values are expressed: “Passion and bravery were value expressions, for example, Page 71 FRC Group Social Report 2001-2002

that men in the logistics section seem to find particularly difficult to relate to and identify with.” The focus groups identified too some discomfort with the awards system. It seems that drivers and upholsterers – all men – were embarrassed to be singled out and felt that doing a good job was just part of their job and that they were “being judged against a set of values that did not fully express their personal commitment to the company and to the work.” Assessing how the culture is developing is no easy task with conflicting evidence. For example, whilst the focus groups make clear that some drivers and upholsterers did not like how the values were expressed there was enormous satisfaction and celebration when the most passionate employee of the year 2002 turned out to be a driver! The challenge going forward is a shared language, which makes sense for a staff group from very diverse class, educational and cultural backgrounds. Unexpectedly, our attempts to articulate and build a values based culture have attracted a lot of attention and interest from people outside the organisation. Invariably, for example, Cat’s Pyjamas delegates are very keen to know why and how we did it and as a result of his work on this social audit, Paul Jones, stimulated by what he has seen here, is working on a research paper for the University about values based cultures in private and not for profit business. Our Priorities 2002/03

• Work with staff to improve our communication about the expression and acknowledgement of our values culture within the Furniture Resource Centre Group

• Continue our annual values awards voted on by all the staff in the Group

• Continue to communicate our values to all of our stakeholders


Our Board of Directors We have a board on of 6non-executive directors. They are all north west based and come from a variety of backgrounds. Four are from the private sector, one has a housing background and another works in the Health Service. All are from senior management levels. They asked to give feedback on how well they thought that the group had done in 2001/02. 4 replied (80%) We asked them to rate how well the group had performed on its social objectives in 2001/02. Of those who replied 85% of their replies said that we had been either effective or very effective on meeting our social objectives. They also made the following additional comments: On Revive “ the change of brief at Revive is a big improvement this year in achieving our social objectives” On environmental objectives “Unsure of how much we do to impact on our suppliers” On Trainees “Training not fully implemented in 2001” “2 trainees not receiving ESOL training is unacceptable. Don’t think discriminatory language or behaviour is challenged enough” The University concept has been a major development. I suspect that there is much more that we could do here” We also asked the Board if they were well informed, felt valued and had adequate opportunities to influence policy. We had positive responses to these questions. At 31st March 2002 board members were: Graham Morris Ex CEO of Rolls Royce and automotive consultant

Barry McKenzie Ex Group Financial Director Silentnight Holdings Plc and

magistrate

Joanne Anderson Director, Inner Vision

Kim Crowe Director of Organisational Development and Communications, North Merseyside NHS Trust

Jim Donovan Group Corporate Affairs Director, Littlewoods

Gaynor Asquith Director, Abbra Regeneration Consultancy


Stakeholders We have 11 stakeholder groups across our business. The social accounting process has shown how valuable their feedback is on our business activities. More details can be found in the stakeholder map in Appendix 1 Employees Across the group we employ both full time and part time staff. Trainees and volunteers. In May 2002, we asked our staff, trainees and volunteers to give their feedback on the terms and conditions and values issues within the Group. 72 staff trainees and volunteers to complete a questionnaire and we got an 87% (63) return rate. Board Of Directors We have a board on of 6non-executive directors. They are all north west based and come from a variety of backgrounds. Four are from the private sector, one has a housing background and another works in the Health Service. All are from senior management levels. They asked to give feedback on how well they thought that the group had done in 2001/02. 4 replied One Stop Customers One Stop customers are local authority housing departments, central purchasing, policy and development department, void management department and social services. Housing Associations, hostels and foyers are also customers. In May 2002 we asked them to comment on our service in 2001/02. Although we had 116 customers we only chose the top 69 spending customers to do this. We had a 54% (37) return rate. Tenants Our One Stop customers offer accommodation to their tenants and we furnished throughout 2001/02, 3,816 properties across the UK. There was no way we could easily contact all these tenants either to ask them for feedback on our furnishing service or how furnished accommodation had helped them improve their lives. Instead we targeted 200 of the 400 Liverpool City Council tenants who have furnished accommodation. We received 100 replies giving highly valuable data on benefits of furnished tenancies. A challenge for us for 2002/03 will be how to either encourage our customers to gain feedback from their tenants or for us to go directly to more tenants. Bulky Bob’s Bulky Household Waste Collection Service On our Bulky Bob’s bulky household waste collection service there are a range of stakeholders from Liverpool City Council, The Waste Management Team, Liverpool Direct and the Social Economy Team. We have one contract with Waste Management to collect the bulky household waste and another with the Social Economy Team to deliver social outputs. Liverpool Direct is the City’s call centre that takes the public’s requests for a collection and forwards them to Bulky Bob’s In 2001/02 there were also 37,811 Liverpool householders who had a successful bulky waste collection from Bulky Bob’s. In May we targeted 100 customers from a


range of postcodes by telephone but got through to only 37. We are determined that in 2002/03 this increase to 100 replies. Until February 2002, there were also the Bulky Bob’s customers. They bought goods directly from the Bulky Bob’s warehouse. They were from the following groups; individuals on benefits, referral agency clients, FRC staff, CREATE, Dove Designs and dealers. Between April 2001 and February 2002 when Bulky Bob’s ceased retailing they had 1,165 customers. We have no data on their views about the business. Revive Customers Revive is a high street store and has customers from the following groups members of the public, individuals in receipt of benefit, referral agency clients and dealers. Throughout the year Revive had a total of 2,989 customers, but it was not until February 2002 that we were able to confidently record which of those had been in receipt of benefit and those who had been from referral agencies. In May 2002, we surveyed 97 shoppers to ascertain their views on our service and the quality of our goods. Referral Agencies One very important group who we have worked with both at Bulky Bob’s and Revive is referral agencies. Until December 2001 we regularly contacted 150 with a newsletter. In April 2002, we found we were confident with only 46 contacts. When they were surveyed and we only had 8 (20%) replies. Clearly this is something we must address and improve communications with this group in 2002/03. One Stop Service Suppliers We have 15 suppliers who supply goods and services for our One Stop furnishing service. In May we surveyed the 10 customers with whom we had spent the most money in 2001/02. We asked them about their relationship with us and their environmental policies and practices. We had 7 (70%) replies. Influencers and Policy Makers Another group are those who influence the development of policy with regard to the social economy. They are from a range of groups, politicians, the media, charities and churches. This year we surveyed 110 individuals in organisations ranging from the media to academia to private business. We had 30 replies (27%). Cat’s Pyjamas Customers Between March 2001 and March 2002 we ran 4 Cat’s Pyjamas events and individuals 101 attended. They came from a variety of backgrounds funders, policy makers, media, voluntary and community groups and social businesses. We asked them in May 2002 to comment on what they had learned whilst on the Cat’s Pyjamas programme. Other Stakeholder Groups There are other stakeholder groups that we did not survey and they are, our funders and customers for our training, i.e. organisations that have funded our training.


Looking To The Future It is a cliché of documents such as this to say in conclusion that the coming year will be full of challenges. This though has never been truer for Furniture Resource Centre. Our main market place, the social housing sector, is undergoing profound and irreversible change. Our market is literally being broken up around us as local authority stock is transferred to new housing agencies. As never before we will be challenged to steer this small business through choppy waters and to create new social business opportunities to replace lost market share and revenues. It may be that 2001/02 marked the high tide of our One Stop furnishing business. In the coming year the challenge will be to prove that we have been just as socially responsible in the less good times. 2002/03 will see our expansion into the Midlands and setting up a logistics operation. We will be working hard on our new company Strippers piloting the reuse of fixtures and fittings in building maintenance projects. With regards to Bulky Bob's, the coming year will see us reconfigure our partnership with Liverpool and the possible expansion of the service into other Merseyside boroughs. Retail is always a week to week challenge and we want to get better at engaging with the important but sometimes badly organised and frustrating welfare referral agencies in the city. 2002/03 will be the year when Cat’s Pyjamas jumps out of its Merseyside box and takes its products and services to other parts of the country. This is a high profile and risky undertaking. Internally we will continue to be challenged to make sense of how best you involve unemployed people in meaningful work that meets their needs and the needs of the business. The rhetoric about social enterprise at national, regional and local levels have never been more supportive. It does not make any easier the business challenges facing us but indeed it raises the stakes. In amongst all this challenge, change and turmoil we will stick to our social auditing guns and aim to gather even more accurate data as the year progresses. We are planning to improve our stakeholder dialogue and move on from the issuing of an annual questionnaire. We have allocated an extra member of staff to the task and the structural changes we have made to the Group over the last year should make the capturing and transmission of information easier. In 2002/03, we aim to make our social accounting process belong to and involve more staff across the group. We will be setting up an in-house team who will work with out Head of Project Development to do this. A priority will be to review and, if need be, update our social objectives. Next will be the introduction of a monthly reporting process on agreed indicators. These will serve a dual purpose; to help us track our business activities more closely and report our progress on our social objectives throughout the year. These are particularly needed so we can track the Group’s environmental performance. We already have a set of KPIs to do this.


We must also make efforts to involve more of our stakeholders on a more regular basis as opposed to issuing questionnaires once a year.

There are also areas that we do not measure and we will be working on. With a PhD student from Liverpool University will try to develop ways to measure and track how beneficial the employment and training that we give our trainees benefits their lives. We have engaged CSR Network to work with us throughout 2002/03 to help us improve the whole of our social auditing process. Karl Marx said (something like) “Philosophers interpret the world but the point is to change it.” Social auditing is not about simply interpreting our behaviour and impact but changing it. No easy task when business demands are so intense but we are up for it.


Our Priorities for 2002/2003

1. To provide furniture to enable disadvantaged people

to access accommodation

• Introduce additional services for customers of our One Stop business • Encourage customers to gain detailed feedback on the benefits of

furnished accommodation from tenants

• Second staff into our customer letting teams to make the provision of furnished accommodation easier and more flexible

• Open our Midlands logistics operation

• Source more second hand and low cost furniture for sale in Revive

• Improve our communications with referral agencies in the city

• Continue to push the development of our credit union

2. To recruit and train long-term unemployed people

• Attain a 70% target of trainees into jobs. • Maintain our zero drop out rate in induction

• Have face to face conversations with 10 leading employers on

Merseyside about the potential recruitment of our trainees

• Continue to track our leavers for up to 2 years

• Recruit a Head of People Development into our Leadership Team

3. To reuse, refurbish and recycle household items from the bulky household waste stream

• Increase recycling rates from 22% to 25% by tonnage • Keep better record if the items that we collect from other sources other

than the Bulky Bob’s waste stream


4. To create a culture based on a fair and empowering

working environment for employees

• Implement a business related pay system and values related bonuses for staff.

• Implement a training programme for all staff to meet the training needs

identified through our How’s It Going programme.

• Increase the number of staff members recruited from ethnic minorities from 3% to 6%.

• Regularly communicate to staff on health and safety issues

5. To treat our customers and suppliers fairly

• Introduce a scoring system so customers can give feedback on our customer service

• Maintain the high level of feed back from our customers and our suppliers on

how easy and fair we are as a company to do business with. • Gain direct feed back on the Bulky Bob’s service from 100 householders

throughout the year who have used the collection service

• In face to face conversations with suppliers formally record feedback on our relationship with them

6. To operate good environmental practices in the

running of our businesses

• Decide on a clear approach to our suppliers on measuring their environmental performance

• Research areas such as pollution and toxicity impacts that to date have not

been investigated • Introduce a set of KPIs for our environmental performance across the

business

• Introduce a monthly reporting system on the KPIs


• Design and implement a staff training programme on environmental issues and KPIs

7. To influence the shape and development of social policies relevant to the achievement of the Furniture Resource Centre’s charitable purposes

• Take up opportunities with the Social Enterprise Unit to help shape the

delivery of Government strategy.

• Continue our leadership role in the Merseyside ILM Network.

• Secure DTI backing for the national Cat’s Pyjamas programme. The launch the national programme.

8. Values

• Work with staff to improve upon how our values culture is expressed and acknowledged within the FRC Group.

• Continue our annual awards voted on by all the staff in the Group.

• Continue to communicate our values to all of our stakeholders.


Appendix 1

Map of Stakeholders for the

Furniture Resource Centre Group


Appendix 1 Stakeholder Map – FRC Group Social Audit 31st March 02

Category Sub-group Number Where based How consulted

Furniture Resource Centre Group Staff

FRC Revive Bulky Bob’s Volunteers

59 3 11 3

FRC Group Liverpool

72 Questionnaires to all staff May 2002.

Staff on training contracts

13

FRC Group Liverpool

Questionnaire to all current staff on training contracts May 2002

Customers One stop furniture services

Registered Social Landlords and Housing Associations

116 National Questionnaire May 2001 sent to 69.

Tenants Registered Social Landlords and Housing Associations Liverpool City Council

3,816 400

200 Liverpool City Council tenants approached 100 replied May 2002

Customers Bulky Household waste collection service

Liverpool City Council Waste Management Liverpool Direct Social Economy Team Liverpool City Council Referral Agencies (Until December 2001) Bulky Bob’s customers – April 2001/ January 2002 Bulky Bob’s Householders

1 1 1 120 1165 37,811

Liverpool City Council Liverpool City Council Liverpool City Council Liverpool Liverpool Liverpool

Questionnaire May 2002. Questionnaire May 2002. Questionnaire May 2002. Questionnaire May 2002. Data not available 100 approached in May 2002 37 replies

Customers at Revive Standard Merseyside 97 customers surveyed in Page 82 FRC Group Social Report 2001-2002

-

On Benefits Referral Agency Clients

May 2002

Customers for training of the long term unemployed

Liverpool Housing Action Trust Government Office NW (ESF) Urban (European Funding)

1 1 1

Liverpool Government Office NW Liverpool City Council

Not consulted Not consulted Not consulted

Suppliers One Stop Service

15

Liverpool North West UK wide

Questionnaires to 10 suppliers May 2002 7 returned

FRC Board

7

North West based

Questionnaire 2002.

Influencers networks Media Politicians Social Economy Organisations Funders Private Charity and Churches Housing Association Regeneration Agency Researcher/ Academic Environmental waste and recycling CREATE board members Social Auditor Other Merseyside ILM network Total

3 6 8 6 14 7 7 28 5 11 2 1 1 11 110

All national Questionnaire 2002. All surveyed May 2001

Funders Foursome InvestmentsEsmee Fairbairn National Lotteries Charities Board

1 1 1

Not consulted


-

FRC Group Social Report 2001-2002

-

frc social report 2001/02

Documents

frc group social report

management of social

social sciences

social accounting

social enterprises

companys social

social accounts

social businesses