Making sure more is better
Helen Seymour and John Goodman, May/June 2002
New Sector Magazine, Issue 50,
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Helen Seymour and John Goodman from the Co-ordination Unit at the
Co-operatives UK consider the options for providing consistent support for
developing social enterprises throughout the UK. Contents
Social enterprise development is complex. It ranges from nurturing new-start
enterprises to helping well-established businesses to grow. It covers all
aspects of business operations and sometimes community development as well.
It may also include specialist areas such as property management, business
succession or complex employee-ownership structures. Social enterprise
development workers may need to have knowledge of particular trade sectors
or of particular client groups.
Providing advice to democratically owned and managed businesses often
requires a radically different approach, in both style and content, from
providing it to investor-owned businesses. Getting the entire workforce to
sign up to a financial strategy requires a different approach than in a
conventional business where what the owner says goes. Setting up procedures
to deal with incompetent workers or management structures that involve
community representatives is also different.
"Social enterprises are on the government's radar screen," said Secretary of
State Patricia Hewitt at a conference at the end of February. The recently
created Social Enterprise Unit at the Department of Trade and Industry has
been looking at the business support needs of social enterprises, and the
Small Business Service in England has charged its franchisees (Business
Links) to take social enterprises seriously. Invest Northern Ireland,
Business Connect in Wales and Scottish Enterprise are making similar moves.
But have they all really thought about how social enterprises are made and
grow?
Creating social enterprises is too important to be left just to the
mainstream business providers.
There are several existing models for the delivery of social enterprise
development services, including specialist bodies, such as co-operative
development agencies (CDAs), social enterprise consultancies (some
themselves structured as co-operatives), specialist services within agencies
with a broader remit (such as councils for voluntary services and rural
community councils) and specialist services within mainstream bodies such as
Business Links and local authorities.
Some consumer co-operatives are entering into partnership arrangements to
ensure that social enterprise support is provided on the ground. Oxford,
Swindon and Gloucester Co-operative puts 2 percent of its annual surplus
towards the funding of the development organisation Co-operative Futures.
Southern Co-ops has set up South West Hants and Wight Co-operative
Development Agency, while Lincoln Co-op is joint funding a social enterprise
worker in its own patch. Other social enterprises are also looking to grow
the sector: in Liverpool the Furniture Resources Centre runs the Cat's
Pyjamas programme to help share expertise.
But is the mainstream business development model good enough? Should
Business Links, Business Connect, Scottish Enterprise and Invest Northern
Ireland be the providers of all services? Are they up to giving support to
businesses whose structures offer a direct challenge to the capitalist
market-driven business norm.
Some might say that creating social enterprises is too important to be left
just to the mainstream business providers and for all sorts of highly
practical reasons specialist organisations are the most effective approach.
Specialist support organisations:
- Are familiar with the range of specialist business options that might be
available and the necessity of working with what the would-be entrepreneurs
want.
- Understand the legal structures and governance needs of the various types
of social enterprises.
- Have experience of the management structures and processes of social
enterprises and the need to be accountable to the key stakeholders in the
enterprise.
- Understand the community within which the group of would-be entrepreneurs
or the existing enterprise operates and has the trust of that community.
- Can provide a link to other social enterprises for mutual support,
inter-trading and joint business development and shared services.
But they need to work closely with the rest of the business support and
regeneration infrastructure. Mainstream bodies need to:
- Be fully aware of the role, significance and range of social enterprises.
- Refer social enterprise clients to local specialist support bodies where
possible.
- Contribute to the funding of those specialist bodies' support for social
enterprise clients out of core budgets, which should have a ring-fenced
allocation for this purpose.
Collaborative working relationships between mainstream and specialist
support organisations should be established in all areas. Ideally these
should be enshrined in partnership agreements or even, as has happened in
some places, formal partnership structures. For example, Co-operative
Futures has developed a partnership with Community First (the rural
community council) to provide social enterprise support across Wiltshire as
part of the Business Links service. Co-active Ltd (formerly Devon
Co-operative Development Agency) has a contract to provide social enterprise
support in Devon and Cornwall.
Getting the partnership agreement right is crucial. It should cover issues
such as the definition of social enterprises, referral procedures, data
sharing, quality standards and the basis for payments.
Where suitable specialist support organisations do not exist, the public
authority should help by encouraging existing organisations to broaden their
remit, or as a last resort, by setting up new organisations. There may also
be need for national task forces to address particular developments (e.g.
large employee-buyouts). The agenda is starting to be ours:
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