The story of Lion Face puts the big into big society. Seven years ago, the 20-year-old gang member from the barrios of Aragua, Venezuela, mugged a security guard from the nearby Santa Teresa rum distillery and stole his gun. When Santa Teresa’s security boss caught him a week later, Lion Face was given a daring ultimatum by the company’s wealthy owner, Alberto Vollmer.

In a move worthy of modern folklore, Vollmer said Lion Face could work for him for three months without pay, or be handed over to the police. It was a risky proposition, but a week later, Lion Face came back – accompanied by around 20 fellow gang members who also wanted to work. Vollmer agreed and Project Alcatraz, as it’s now called, was born (the name reflects the idea that people’s worst prison is themselves and the challenge is to escape from themselves).

The project aims to reduce delinquency and unemployment and involves gang members in an intensive (and mildly eccentric) three-month work-study programme that include rugby training and community service. On completion, participants choose between a formal job – in the Café Alcatraz programme, for example, they learn how coffee is produced and packaged- or further education, perhaps via the on-site housing construction workshop.

Santa Teresa, a 200-year-old family run company, is some 4,500 miles from Westminster, but given the current debate about the private sector’s role in big society – and if big society includes encouraging something other than statutory services to tackle social problems – the tale of Lion Face is a salutary one.

Since 2003, five gangs have completed the project and been disarmed. Local crime has fallen by 40% and last year Project Alcatraz won best social inclusion project at the Beyond Sport Summit to celebrate sport-led social change in London. Professor James Austin of Harvard Business School’s Social Enterprise Initiative has said of the management of Santa Teresa that “its viability and profitability are dependent not only on its ability to produce a superior product, but also to generate social value for its surrounding community”.

And that’s not all, several years ago Vollmer negotiated with squatters who wanted to take over land on his sprawling estate; the result was the creation of Camino Real, a 60-acre 100-house community built by the squatters themselves and funded with government housing agency mortgages.

While most large UK businesses have corporate social responsibility (CSR) programmes that include employee volunteering schemes and donations to local schools or community projects, the ethos and scale of what’s going on at Santa Teresa is closer to the now extinct philanthropic traditions of Quaker companies (think Cadbury, Rowntree, Frys). Vollmer’s philosophy is quite simply that healthy communities lead to healthier profits. As Vollmer himself has said: “If you have growth and well being in the company but not in the community, then you are dead meat.”

Santa Teresa invests about 2% of its profits in social projects and attracts money from other sources including charitable donors. No mean feat given the years of political and social upheaval under President Hugo Chavez’s divisive regime that has pitted poor against rich.

It’s crude to suggest that Project Alcatraz can be replicated elsewhere; the schemes are as much a product of Venezula’s unique political, social and economic context as they are the result of the single-minded determination and social awareness of Santa Teresa’s owner. The best social businesses owe as much to their visionary and determined leaders as to their watertight business strategies and savvy investors, but the Lion Face story shows what is possible when business puts its money where its manpower is.

On a smaller scale, as discussions at a Tory conference fringe meeting today should reveal, there is some evidence that US-style Business Improvement Districts (BIDS) might help plug the gap left by public sector cuts. BIDS are defined areas within which businesses vote to invest collectively in local improvements (and therefore boost their trading environment). The public-private partnership between the local authority and business are funded by a levy on the business rate charged by the council.

Birmingham, for example, has three BIDs which collectively generate around £2m of private sector investment into city centre public areas each year. Birmingham’s BIDs certainly seem successful, winning national plaudits for their nighttime economy and the cleanliness of the city centre streets. Crime figures in the Broad Street BID area, for example, have been dented since the launch of the scheme, from 1,300 incidents in 2005-6 to 995 in 2008-9 and public satisfaction is high.

However, not all BIDs are proving entirely successful, as Edinburgh has found to its peril. Business organisations might be reluctant to participate thanks to the same economic malaise that is leading their statutory sector counterparts to consider retreating from service delivery.

And, given it’s taken five years to get 100 BIDs up and running around the country, how long it will take for the city centre programmes to make large-scale improvements (more to the point, will it be only a handful of BIDs that go beyond the realm of cleaning pavements, erecting floral displays and installing Christmas lights?). Also, as I remember from reporting about West End BIDS 15 years ago when the schemes were being chewed over by a clutch of the capital’s boroughs, there’s a worry about displacement. If improvements stop at the BID boundary isn’t there a danger of creating a two-tier city centre with a clean core and sweeping (literally, in many cases) the problems to the edge of the BID area?

As the public sector cuts back on delivery and all eyes dart desperately towards the twin panaceas of social enterprise and the voluntary sector to adopt its mantle, businesses and business-led partnerships should wake up to the vested interests they have in their local communities. Maybe that’s something to be championed by the new breed of City mayors recently proposed by Communities and Local Government Secretary Eric Pickles?

The UK has enough Lion Faces. Now what we need are a few more Vollmers.

* A fringe event ‘What role can Business Improvement Districts play in the recovery?’ takes place at 5.45pm today at The Mailbox centre, organised by Birmingham CIty Centre Partnership. Speakers include Bob Neill MP, Parliamentary Under Secretary of State for Communities and Local Government and the Broad Street BID’s Gary Taylor.