An enterprising society

Social enterprises have played a critical role in Welsh life for decades. Of course, they haven’t always been known as “social enterprises” – but from miners’ libraries, to local co-operative societies and today’s childcare centres – the notion of people coming together, to deliver a local service and to reinvest the proceeds in the building of their community has shaped the Welsh economy and public sphere for as long as we can remember.

They are still very much a part of today’s Wales, with around 1500 social enterprises generating  £1.7bn for the Welsh economy, employing 38,000 people, and supporting a vast network of volunteers.  And they will play an even more visible role in tomorrow’s Wales.

Social enterprises have a key role in shoring up our local economies. Most social enterprises operate locally, often in the most deprived parts of Wales. 53% operate solely within a single local authority area. Most expenditure by social enterprises stays in the local economy and around three-quarters of jobs are filled by people who live locally. These are often jobs in sectors which meet a localised, ongoing demand – such as transport, leisure, youth support and care.

In Scandinavia, co-ops alone account for 19% of GDP. We are far short of that here, but in parts of the UK, local councils acting together with other major local institutions have already started to behave as catalysts to develop their local economies, or actively procure goods and services from social enterprises.

But social enterprise could be far more directly involved in supporting the public sector. For some time, our public services have been going through a process of drastic change from the pressure of new demands, UK-wide spending cuts and now Brexit. For those of us committed to well-funded, responsive public services, these are profound challenges. They demand new levels of creativity in how we promote social justice and support the aspirations of our disadvantaged communities, within a smaller public sphere.  

Many local authorities are increasingly realising that a not-for-profit social enterprise model can be an alternative to losing services. The Welsh Government, which has long supported social enterprise, has endorsed calls to involve co-operatives and shared ownership models to support the transformation of services. We also have the opportunity in services such as care, to regain to the public/social sphere, work which the private sector has claimed.

The recently published Programme for Government prioritises initiatives in social care, childcare and local economic development – where social enterprises already play a part. There are examples all over Europe of public/social partnerships contributing both to improved services and a more resilient local economy.

What we need now is a proactive effort to ensure a robust, innovative social enterprise sector. The sector reports that the main challenge to its sustainability is access to finance. We could add to that, the need to foster the skills required to run an organisation which has management, legal, accounting and marketing demands as well as frontline delivery – and the large-scale capacity building that this entails.  

So as we approach Social Enterprise Day, I have 3 asks:

A social enterprise economy – in the Government’s new economic strategy, social businesses should be seen as partners in developing stronger local economies. Public bodies should actively aim to buy goods and services from social businesses, helping develop short, resilient local supply chains with a focus on community development.

Supporting public services delivery: The action plan for Alternative Delivery Models in Public Service Delivery issued before the election remains Government policy. The Government should commit to a progress report every 6 months on its actions against the plan, giving public bodies a framework to assess the resilience of services and explore public/social alternatives. Equally where there is an existing framework (eg the new Social Services and Wellbeing Act requirement for councils to promote social enterprise in care and prevention) it mustn’t be allowed to stagnate on the statute books. Compliance should be managed proactively, and supported.  

Enterprising communities: As we contemplate the end of much of Communities First, we must identify successful programmes and support them to continue as social enterprises wherever possible.  And the Welsh Government’s Valleys Task Force – where around 500 of our social enterprises are based – must explore innovative ways of involving social enterprise in improving the Valleys’ economies. It should be given the tools to foster the development of locally-based sectors such as food and energy as well as more ambitious developments in care and support, where social enterprises are ideally placed. They can also be part of the solution to directly involving people and communities in defining and addressing their needs.

There are big economic pressures ahead.  Social enterprises – serving and investing in our communities and local economies, can be a vital part of how we equip ourselves to meet that challenge.