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The Social Innovation Challenge and the rising cost of living

The Social Innovation Challenge aims to tackle the most pressing social issues of our times. In 2022, we sought solutions to climate change challenges faced by rural communities in Scotland. This was in response to the undeniable climate emergency and a desire to maintain the momentum created by the Glasgow COP26 event. As a result, we awarded £50,000 to Iona Energy Ltd to help them work towards the delivery of the Iona Heat Network – an innovative approach to delivering sustainable energy to a vulnerable population living on a small island in the Inner Hebrides. 

The theme addressed by the Social Innovation Challenge is designed to change every year. The programme complements the rolling grants awarded by the Social Entrepreneurs Fund (SEF), which aim to support start up social entrepreneurs in their very early stages of setting up a business with a social mission at its core. Whilst anyone with a great idea for a social enterprise can apply for one of our SEF programmes, as long as they can demonstrate a commitment to delivering social impact, the Social Innovation Challenge seeks to enable those highly innovative, ambitious and even potentially risky responses to complex challenges. This is in recognition of the fact that, as a funder, we need a blended strategy, which supports tried and tested solutions to persisting problems, as well as creating space for experimentation to push the boundaries of what is possible. 

The Social Innovation Challenge was re-designed in 2022 to respond to the real needs of social entrepreneurs and stakeholders. We were keen to continue this way of working by setting the focus of the 2023 edition through conversations with individuals, social entrepreneurs, and stakeholders from across Scotland. This is to ensure our approach is shaped by those living and breathing the issues we hope to tackle. However, even before starting our engagement exercise, it became increasingly obvious that going into 2023, one challenge was weighing on everyone’s minds more than any other: the emerging cost-of-living crisis.  

Why address the rising cost of living 

Enquiries from past awardees, media headlines and conversation taking place in every forum we took part in towards the latter half of 2022 pointed to the effects of the increased cost of living as a top concern. Nonetheless, we wanted to test this assumption, so we put out a small survey asking respondents to vote for the top challenge that they thought people were facing today. The options were:  

• Cost of living. This can include rising energy costs, child poverty, food poverty, homelessness. 
• Health and wellbeing. This can include mental health, long term conditions, disabilities, social care, isolation, addictions. 
• Challenges faced by young people. This can include cyberbullying, access to education, pathways to employment. 

• Other: an opportunity for respondents to suggest their own challenges. 

The cost-of-living challenge was the top voted option. There was also a sense of this issue being particularly intersectional: 

The cost-of-living crisis is and will impact so broadly across Scotland. It will increase mental health difficulties across all age groups, increase social isolation, force organisations to postpone/ditch Net Zero transition plans. So many impacts and inequalities will be exacerbated by the cost-of-living crisis. (Survey respondent) 

Even in the responses of those who voted for other themes, we could pick up issues that would also be compounded by the effects of the increased cost of living. If people’s ability to afford basics and essentials drops, their health and wellbeing will suffer. Young people’s employment prospects are likely to be affected by the ‘impending recession’. Even those who suggested the climate crisis as a top challenge linked it to increased costs and decreased quality of life. 

These examples only skim the surface of the problem. Moreover, the survey was on a small scale. However, these results gave us the confidence to dig deeper into this topic to find out:  

1. What are the ‘challenges within the challenge’? What are the effects and contributing factors to the cost-of-living challenges? How is this impacting communities across Scotland? How could social enterprises help? What is within our remit as Scotland’s agency for start-up social entrepreneurs? How do we tackle the core issues, innovatively? 

2. Who else is addressing this issue? As the remit of the Social Innovation Challenge is focused on innovation, we felt it was important to be aware of other support available, including crisis responses, to which we could potentially signpost individuals and organisations. 

The challenges within the challenge  

Before looking for solutions, it is important to understand the problem. The current cost of living crisis is made up of various problems: most notably, the increase in energy prices, but also the rising cost of food and transportation, as well as the ongoing consequences of the COVID-19 pandemic, such as isolation, mental health problems, stretched services and changes in the employment market. As the ‘Poverty in Scotland 2022’ report notes, the resilience of households, particularly those on low incomes, have been eroded over many years by these various contributing factors. 

The demographics that are deemed to be most at risk from the rising cost of living are those already affected by inequalities: 

• Single-parent families are ‘more likely to be locked out of work due to childcare responsibilities.’  
• Disabled people, people living with long term conditions and unpaid carers are also ‘more likely to have lower incomes and higher expenditure, they are at greater risk of struggling to keep up with the consequential increases in prices for food, clothing, transport and other utilities.’  
• Young people have also noted their mental and physical health suffering as a direct consequence of the cost of living crisis, as well as missing on their studies due to working extra shifts to afford daily essentials. 
• Professionals from Black, Asian, Mixed Race and minority ethnic backgrounds have been reported to be ‘at greater risk of redundancies, debt and a mental health emergency.’ 
• Individuals living and working in remote rural areas of Scotland already pay much higher prices for food, clothing, household good and transport, with a ‘third of households in remote rural areas are classed as ‘extreme fuel poor’, compared to only 12% in accessible rural areas and 11% in the rest of Scotland.’ 

In terms of the negative impacts of the cost-of-living crisis on individuals, the detriment to physical and mental health and wellbeing is most concerning. There have been countless reports of individuals finding themselves in unimaginably difficult situations such as needing to drastically cut down on food, choosing not to heat or wash, isolating themselves from friends and family due to the costs of transport and socialising. Diminishing physical and mental health can in turn further negatively impact individuals’ resilience and prospects, creating a vicious circle and deepening inequalities. 

Where does the Social Innovation Challenge fit in  

As mentioned earlier, the Social Innovation Challenge aims to fund and support innovative solutions to pressing challenges. The programme vision is to enable solutions that provide long-term benefits by tackling deep-rooted issues in innovative ways. Therefore, the Social Innovation Challenge award is not a crisis grant. Instead, the programme will seek to support new solutions which develop sustainable and long-lasting ways in which individuals, households or communities can shield themselves from the negative effects of such challenges. We hope that by maintaining this focus on innovation and supporting ideas that might struggle to get support otherwise, we can uncover solutions which can be replicated or adopted more widely to deliver far-reaching change. 

Whilst it is outwith the remit of the programme to fund emergency responses, we understand that unfortunately these will continue to be needed for some time to ensure that people have the resources that they need to see this crisis through. Therefore, we will seek to signpost, wherever possible, to other sources of support from organisations that can provide immediate help to individuals or communities.  

In terms of what is needed to address the challenge, some of the survey responses and third sector reports alluded to potential solutions. Addressing the cost and availability of childcare or transport, particularly for economically disadvantaged groups, could increase their financial resilience, as would increasing their access to healthy food or providing affordable housing. Developing renewable energy and energy efficiency measures could shield individuals from the volatile nature of the energy markets, as well as providing environmental benefits. Focusing on strengthening hyper-local economies could support an entire community to become more self-sufficient and resilient in the face of these challenges. Targeted mental health support could be ‘a vital means of reducing poverty.’ And employers themselves were seen to have a role in enhancing their employees’ resilience through flexible arrangements. 

All of these are opportunity areas, where social enterprises could make the difference between thriving and surviving for individuals and communities. We can already see social enterprises tackling these issues in innovative ways.  

• Our own 2022 Social Innovation Challenge winner are a worthy example. Whilst their primary goal is to deliver an environmentally friendly solution to heating a remote island population, at its core their mission is to improve the lives of individuals at risk of fuel poverty.  
• In terms of supporting local wealth building, Isle20 is a project committed to supporting small businesses in the Scottish islands, thus enabling entrepreneurs from the most remote corners of Scotland to reach wider audiences.  
• As for helping individuals or households reduce costs, KLAS Care is a great example of an affordable childcare service in Renefrewshire. The social enterprise delivers additional social benefits by reinvesting profits in subsidised fees for low-income families, allowing inclusive access to the service and providing accredited training to volunteers. 

Of course, these are just a handful of examples and there are many other inspiring ones all over Scotland. But these examples prove that social enterprises can indeed help tackle challenges in innovative ways, pushing the boundaries of what is thought possible and creating alternative, more equitable ways of accessing services and products. 

If you have an idea of your own, the Social Innovation Challenge might be able to help you. The 2023 edition will be looking to support new social enterprise ideas for removing the deep-rooted obstacles that prevent individuals and communities from living fulfilling and dignified lives, particularly in light of the rising cost of living. Expressions of interest will open in April, and the deadline for applications will be Monday 31^st July. 

To find out more about the theme, the eligibility criteria and the key dates, please see our Social Innovation Challenge page. If you would like to speak to someone about this programme, get in touch with Carmen, the Social Innovation Challenge Programme Manager, at carmen@firstport.org.uk.