Scaling HCT Group

Dai Powell

Chief Executive, HCT Group26 September 2012

Welcome ■ A journey from:

– a small Community Transport charity…– to a large scale social enterprise with national ambitions

■ Hundredfold growth– from a turnover of £202k in 1993

– to a turnover of £28.6m in 2011/12

– 700+ employees and a fleet of 370 vehicles

■ Increase in social impact in line with our growth■ What did we do?■ What did we learn?■ What’s next?

1982 – 1993:A community transport charity

■ Founded in 1982 as Hackney Community Transport

“To deliver social change through enterprise, empowerment and partnership”

■ Minibuses for community groups ■ Door to door transport ■ Mainly voluntary, grant funded■ We learned that:

– Access has an amazing impact on our communities– Services designed by their service users really work– Effective organisations work with all their stakeholders

– Relying on one source of grant funding is too risky…

1993 – 2001: Learning to trade

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

Our enterprise model

Our social model

Learning to trade: what we learnt

■ One key idea:

“To be a sustainable social enterprise, we must also be an effective enterprise”

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■ Culture change from traditional charity thinking:

“It’s good to make a profit”

■ Values can not excuse poor quality or high prices:

“Get really good at buses”

■ The better we did commercially, the more we could do for our social mission

“Commercial success: community impact”

2001 – present day: A social enterprise

■ In 2001, we won our first London red bus route… ■ We take on the big private sector operators in the

marketplace and beat them■ Have worked with a total of 19 Authorities…

…we are still working with all 19 ■ 98% of revenue comes from contracts■ Profits reinvested back into the core mission ■ 20% average growth per year

Turnover growth

Our development: national growth

Social impact

■ Profits reinvested in the communities where they are earned

■ Transport for community groups– deeply discounted accessible minibus hire– 66,000 passenger trips in 11/12

■ Individual transport– services for disadvantaged individuals– 230,000 passenger trips in 2011/12

■ Learning centres– a wide variety of programmes aimed at job outcomes– 76 job outcomes (11/12)

■ Economic impact – an operation in 7 of the 15 most deprived boroughs

The future: Challenges and opportunities

■ We aim to double in size every 5 years■ Expansion focussed on areas of deprivation■ Our strategy is to meet challenges with innovation:

– Funding challenges: the Social Loan

– Barriers to organic growth: acquire private sector operators

– ‘Bus company’ culture: Social Enterprise Champions

– Understanding new areas: JVs, partnerships and mergers

– Public spending cuts: service-user led design

– Community focus vs national scope: RACs

– Poor procurement practices: write the book

Any questions?