Sandwell Community Caring Trust

Sandwell Community Caring Trust

Sandwell Community Caring Trust (SCCT) is a registered charity delivering care services to adults with physical and learning disabilities and elderly residents. Sandwell Community  Caring Trust emerged from Sandwell Metropolitan Borough Council in 1997. Big Issue Invest and Unity Trust Bank came together to provider over £4 million to enable Sandwell Community Caring Trust to purchase a new 62-bed residential care home. In some ways this was a relatively straightforward property deal but it was made possible by the partnership between the two investors and SCCT, brought together through shared values, and by Big Issue Invest’s capacity to take on risks which conventional banks cannot.

Before the investment

Sandwell Community Caring Trust (SCCT) is a registered charity created in 1997 to provide services in the Black Country in the West Midlands. The organisation delivers a range of services to support over 600 people in the area as well as providing NHS and social services in Torbay in the south west of England. Services include supported living for adults with physical and learning disabilities, residential care including for adults with physical and learning disabilities, day care services, respite care for physically disabled adults and domiciliary / home care.

Supported living enables people who are unable to live by themselves independently the chance to live in their own home with the support of care workers. SCCT provides supported living to adults with learning or physical disabilities in properties from 1 bedroom flats to 4 bedroom bungalows. These properties may be ‘ordinary houses in ordinary streets’ or part of a development together which is designed to build social capital and reduce isolation. Every home is based on the needs and choices of the people who will live there, depending on their needs, such as wheelchair access, or the support they require. SCCT aim to provide a plan of support while giving the individual the opportunity to maintain their independence wherever possible. Care varies from a few hours to 24 hour support. 

Sandwell Community Caring Trust was originally part of Sandwell Metropolitan Borough Council and has grown from 85 staff and 62 customers to over 600 staff and 700 customers today. In 1997, long before the current UK government focus on mutuals, the enterprise ‘spun out’ of the council to become an independent social enterprise. Before the move, staff had on average 22 days sick leave every year, which for the last seven years is now just one day. Similarly, staff turnover was 30% and is now just 6%. As a result of its success, SCCT has expanded the range of services it offers including respite care, and supported living for children and adults with physical and learning disabilities. Sandwell Community Caring Trust devolved more control to staff, cutting management and administration costs from 20% to 6%.

Geoff Walker, CEO of Sandwell Caring Community Trust, has played a significant role in the social enterprise movement, particularly around advocating for the importance of creating a positive working environment for staff, helping them to be more engaged and motivated in their work. Geoff describes how “Our carers are absolutely committed to the people they look after. If you want people to work with respect and dignity, that is how you have to treat them.”

Why invest?

Big Issue Invest (BIII) has a mission to use finance to help communities and people in greatest need. It is the social investment arm of The Big Issue and one of the UK’s leading providers of finance to social enterprises and charities. Big Issue Invest’s mission is to “dismantle poverty and inequality by investing in business solutions to social and environmental challenges”. Big Issue Invest prides itself on being led by social entrepreneurs working alongside experienced social financiers. Big Issue Invest tends to offer investment of between £50,000 and £1m, taking the form of either loans or equity or hybrids. Since 2005 BII has invested in more than 160 organisations. BII aims to focus on enterprise which offer transformative models of social enterprise, including Jamie Oliver’s Fifteen, 4Children, the HCT group, and Turning Point. Any profits are either reinvested or directed to The Big Issue. Nigel Kershaw, Chief Executive of Big Issue Invest says that “Putting people first came over so powerfully when we first met Geoff in 1996 when he was setting Sandwell up. This respect now runs right through the organisation and makes it such a proud investment for us.” This deal is BII’s twelfth investment in the health and social care sector in the UK.

Andrew Jesson from Unity Trust Bank describes how “SCCT is an inspirational organisation with great vision and leadership and a dedicated team. As a social enterprise ourselves, Unity Trust Bank is all about creating positive impact. We are incredibly pleased to be partnering with Big Issue Invest to help SCCT increase its capacity to deliver excellent services in the health and social care sector.” 

Unity Trust shares Geoff Walker’s passion for employee engagement, which helped strengthen the partnership. Unity introduced an employee ownership scheme in 2013. Peter Kelly of Unity Trust says that “For an organisation that talks about being here to promote the common good, and to provide social and community benefit, it is just entirely right for us to enable our people to have a stake in the organisation… “If you look at research, you find that employees who have a share in an organisation tend to have lower staff turnover, better staff morale and in turn, we strongly believe that will lead to even better customer satisfaction, because our people are involved in the organisation. It was a no-brainer to us, and it’s been extremely well received by our employees.”

The investment

Big Issue Invest (BII) invested £725,000 in Sandwell Community Caring Trust, the last 25% of the deal which reflects BII’s appetite and ability to take greater risks than conventional lenders. The investment enabled SCCT to purchase Hall Green - a newly built 62-bed residential care home for the organisation to provide specialist care for elderly people with dementia. As well as financial support, BII arranged for additional professional support for Sandwell Community Caring Trust through a non-executive director appointed to SCCT’s board, to help make the board stronger.

The finance has been provided in partnership with Unity Trust Bank, a leading provider of loans and banking services to the social economy sector. Unity Trust Bank is a specialist bank for civil society, social enterprises, CICs, councils, and trade unions. It aims to support customers with socially responsible banking services. The bank provided £3.5m of the overall investment, secured against property.

Why structure the investment in this way?

The investment was structured as a conventional loan as there was property against which to secure the finance. However, Unity Trust Bank were unable to provide 100% of the finance and Big Issue Invest were able to provide the riskier element of the deal. Most banks will only lend against a percentage of the underlying property value and many social enterprises lack the reserves needed for a deposit. Here, BII invested the 25% ‘equity’ portion subordinate to Unity’s senior debt.  Geoff Walker commented that “It’s important because most social enterprises like us aren’t capital rich but can develop revenues to pay back loans. We need this rare type of flexibility.”

Impact of the investment

Sandwell Community Caring Trust chief executive Geoff Walker describes how working with Big Issue Invest has made it possible for Sandwell Community Caring Trust to secure the long-term future of 100 older people suffering from dementia and other related problems. BII was flexible, creative and prepared to work in partnership.” Sandwell Community Caring Trust generated increased income in 2012/13, up to £14.3m from £11.1m in the previous year. 

Hall Green has 62 residents over the age of 65, including those with dementia and Alzheimer's.  Each room has an ensuite bathroom and there is are gardens for residents to enjoy. The accommodation consists of three floors. Inspection by the Care Quality Commission report that the majority of people who lived there and their relatives were positive about the home and the services provided, while there were some areas for improvement.

Risk and mitigations

For Unity Trust Bank this was, to some extent, a deal like many others where the principle risk of the investment is the financial risk of the money not being repaid. As a property-based deal, this was in part mitigated through the loan being secured against tangible assets. On the other hand, the role of BII also helped to mitigate risks as their share of the deal allowed Unity Trust Bank to invest only 75% of the package.

For BII, the main risk was around SCCT’s potential to maintain and grow profitably from the range of contracts with the public sector that drive its business. Sandwell Community Caring Trust’s track record of growing income was persuasive in this regard. Over 6 years and more, SCCT’s trading income has increased by at least 10% per year with a consistent surplus being generated. Much of SCCT’s income comes through medium to long-term contracts which offer some degree of certainty to the investors. Furthermore, the market in which SCCT works has grown significantly over a decade and national and local trends suggest there are even more opportunities for SCCT to expand in future.


One important lesson from this deal was the way in which two different investors with different expectations and different appetites for risk could come together to make a deal possible. The UK Cabinet Office has recently focused on this idea of ‘co-mingling’ whereby diverse investors can make an overall investment package stack up.  Cabinet Office outline how in a co-mingling situation “philanthropic money, usually from a charitable foundation, is invested alongside more commercial funds. The funds are then invested in projects that hope to achieve a positive social outcome as well as a return on the investment.” While in this case, the motivations of investors are not as extreme as philanthropic and commercial, and rather both seek a mix of social and financial return, they are able to come together to complement each other in the same way to make the deal possible.

A further lesson is the extent to which shared values between investor and investee can help make a deal work. Both Big Issue Invest and Sandwell Community Caring Trust have particular cultures and values as Emma Boswell from SCCT explains “This is massively differently to anywhere else I’ve worked. I’m not a number, the chief exec knows who I am, I know who he is, I’m not having to go through 20 people for a decision to be made… You are given opportunities. You are allowed to excel. And when decisions are made, you’re part of it. You’re not told, you’re part of what goes on in this organisation.”

A final lesson is that while deals which don’t involve property do happen, the vast majority of activity in the fledgling UK social investment market are still very much based around secured lending, or mortgages. Most borrowing from the voluntary community sector and social enterprise is still found from conventional banks, or even specialist social sector banks and risk capital as provided here by Big Issue Invest is very much the exception.


Author: Dan Gregory, Head of Policy at Social Enterprise UK (SEUK)

Source: China-UK Social Enterprise and Social Investment publication