ONE of Scotland's most successful social enterprises, the Wise Group suffered a seismic shock when it lost a major Government contract in 2011.

Having been responsible for delivering welfare to work policies on behalf of the Department for Work and Pensions (DWP), the company lost out in a tendering battle, as responsibility for delivering the Work Programme in Scotland was handed to rivals in 2011.

The failure to land the bid, which was instead handed to Working Links and Ingeus, was estimated at the time to cost the Wise Group £150 million. Despite having helped 5,300 people into work in 2010 it was forced to restructure, and has since slashed its staff from 650 to 200.

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But the firm has been quietly regrouping, winning contracts to deliver a range of innovative schemes in the north-east of England and developing its successful project mentoring prisoners preparing for release from Scottish jails.

Meanwhile the Wise Group is also part of a consortium bidding to take over probation work in the north-east as UK ministers replace 35 probation trusts in a massive tendering exercise.

The prison mentoring work will soon be expanded, if a bid currently in with the Big Lottery Fund in Scotland is successful.

Meanwhile the group is currently recruiting non-executive board members from Scotland and the north-east with an interest in social enterprise, and a north-east regional director, both through Aspen People. The deadline for applications is Monday.

It's another sign of the firm's increasing confidence, according to chief executive Laurie Russell, who admits the firm has had a testing time. "We've kept below the radar for the last couple of years and survived," he says.

The fact that three voluntary redundancy programmes over the last two years, and the transfer of 150 staff to Ingeus and Working Links have been achieved without any internal grievances is a sign of the organisation's positive culture, he argues.

That culture is one of the elements he hopes will be recognised in future UK and Scottish Government tendering exercises.

Compulsory competitive tendering is a reality the sector has to face, he says. "If it is based on performance and the quality of work we do, it allows us to compete.

"If it goes solely on price, the bigger private sector organisations are at an advantage. But if tendering is done properly and fairly, we as a sector should have nothing to fear."

The process could be more sophisticated though, he suggests. "One of the things that often isn't measured is the social impact you make. The culture of an organisation is also very important. But the governments are in charge. If they want to buy social impact, they can do that."

The shift in geographical focus for the Wise Group is an interesting one, given the different approaches being taken by governments north and south of the border, Russell adds.

The Routes Out of Prison programme in Scottish prisons could hold lessons for England and Wales. The Wise Group and its partners currently provide mentors in every prison in Scotland, trying to ensure prolific offenders do not return to their old ways when they emerge from jail. Recently backed with £2.9m of Scottish Government funding, it has been independently praised for its effectiveness.

Finding sympathetic employers is key to its success, Mr Russell claims. "There are employers who do understand, who perhaps have not been that far away themselves from making mistakes that could have screwed up their life."

He also believes Scotland could do to take a closer look at some of the Wise Group's initiatives in the North East.

The company was recently awarded £8.7m in lottery cash to run the Talent Match youth employment programme in the north east.

Despite the bruising experience with the Work Programme - which was accompanied by controversy over the limited role given to the voluntary sector in many if not most of the contracts - The Wise Group would bid for such work again, he says.

"We win more than we lose, but we lost a very big one. If we lose a contract we try to learn from it."