Search for the Social Formula
John Pearce, April/May 2003
New
Sector Magazine, Issue 55,
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John Pearce traces the development of social accounting in the UK and across
the world.
Contents
The social economy sector was early in the field of developing practical and
workable methodologies for social accounting and social audit. In Scotland,
Strathclyde Community Business (SCB) recognised the need to understand,
account for and report on the social benefits of the community businesses,
which were being established in the 1980s. SCB's thinking and
experimentation led to what became known as the Scottish model which blended
in the mid-1990s with the experience of the New Economics Foundation (NEF)
working with Traidcraft has evolved into the Five Stage Social Accounting
process.
In recent years the practice of social accounting and audit has begun to
expand significantly throughout the social economy sector.
The Scottish model was tested in the early 1990s with community enterprises
in Lothian Region in Scotland and also with worker co-operatives in
Nottinghamshire.
The Beechwood model, originally devised by ICOM (Industrial Common Ownership
Movement) and developed into the Social Audit Toolkit, has been used by a
number of social enterprises in the English Midlands, Bristol, Yorkshire,
South Wales and elsewhere.
In Northern Ireland the Social Economy Agency (SEA) promoted a clustered and
peer supported training course in social accounting and auditing in early
1995. In 1996 the Open College Network accredited the course. The model used
draws on both the Scottish/NEF and the Beechwood models and the training
programme continues to be delivered regularly.
In Liverpool a social audit initiative, sponsored by the City Council has
been running since 1996. The model was developed into an accredited Open
College Network course in 1999 for which the Social Audit Manual was
written. The course is now being delivered by a local facilitation team
through the Merseyside Social Enterprise Network (SEN) and more than 50
local organisations have engaged with social accounting, one now into its
sixth consecutive cycle. A new generation of the programme is now being
extended to the whole of Merseyside and Halton, funded by the North West
Regional Development Agency.
In Scotland, the Community Business Scotland (CBS) Network has worked with
clusters of organisations in Moray and Aberdeenshire, in Edinburgh, Glasgow
and Fife. The cluster approach gives the opportunity for peer support and
mutual learning as well as being a more cost effective way in which to
deliver training and support. A continuing series of training workshops is
organised by CBS around the country and the Moray and Aberdeenshire cluster
is now starting its third programme cycle.
In September 2000 at a symposium held in Edinburgh for social accounting and
audit practitioners in the social economy it was agreed to establish a UK
Social Audit Network (SAN). The Network sees its role:
- to represent practitioners in the social economy;
- to develop agreed methods for the approval of competent social auditors
and of training providers; and
- to develop agreed common standards for the content of social accounts and
for the verification process.
Its register of SAN approved social auditors can be see at
http://www.cbs-network.org.uk/
.
Other clusters, notably in Devon and Cumbria and most recently in North East
England and Somerset, are being introduced to social accounting, while other
community-based organisations such as, for example, the Black Country
Housing and Community Services Group, Total Coverage (a workers co-operative
in Southampton); the Shetland Community Enterprise Network have developed
their own styles of social accounting and audit.
The GB Social Enterprise Partnership (SEP) has included a component on
measuring quality and impact and is examining current practice in the social
economy, testing various models and developing new tools to be used within
the social accounting process.
In Europe, social accounting and audit has featured in a growing number of
European Union funded transnational programmes using both the Scottish/NEF
and the Beechwood/SEP models, with increasing evidence of cross-over or
convergence between the two. CBS Network has experimented with using the
social accounting model to assess and report on the use and creation of
social capital across eight social enterprises in five European nations.
This opens up the possibility of using social accounting not only to measure
the performance of a social enterprise against its own objectives and values
but also against those which may be set down by society more widely.
Further afield, COMMACT Aotearoa has run a social audit programme for social
economy organisations in New Zealand since 1997 adapting the Scottish/NEF
model to local needs. It has also established an organisation, Social Audit
New Zealand, to promote the practice throughout the social economy and the
corporate sectors. Government departments in New Zealand have also shown a
strong interest and the Department of Foreign Affairs has invited Voluntary
Service Abroad (VSA - equivalent to VSO in the UK) to report this year using
the social accounting process. Two Labour Members of Parliament have
committed to adopting social accounting to report on the work of their
constituency offices and one City Council is well advanced in exploring how
a local authority might implement social accounting in its work.
In India CBS Network has been working with Creative Handicrafts, a social
enterprise based in one of the slums of Mumbai, to prepare their first set
of social accounts which are expected to be ready for auditing by the
summer. COMMACT India has also sponsored a series of social audit workshops
throughout the regions of India and is hoping to establish pilot programme
for NGOs (non-governmental organisations) in 2004.
In Queensland, Australia, the Maleny Credit Union has prepared social
accounts for the past three years - the first Australian community
organisation to do so - and the Queensland Social and Environmental
Accounting Network is now actively promoting the practice amongst both
community and corporate organisations. A national body, Jobs Australia, has
also started promoting the practice of social accounting amongst its members
and it is hoped that the first sets of social accounts will be ready for
audit later this year.
Developments in social accounting and audit are fast-moving within the
social enterprise sector. No one can yet claim: "This is how it should be
done." The experience becomes richer and more diverse all the time and the
challenge for those involved is to ensure that lessons learned are lessons
shared and to develop common standards that are relevant and appropriate.
The real surprise is that the interest in social accounting has emerged so
lately. Social enterprises have been slow to understand the importance of
effectively measuring impact so that they can report on performance, account
to stakeholders and make the case for continued investment in their work.
Even more surprising has been the failure of the financiers of social
enterprises to require real evidence of social impact and benefit. So often
their concern is "are they succeeding as businesses?" without seeking
information about how well the intended social added-value has been
achieved. Changes are clearly underway and for social enterprises a further
challenge is to take the lead in developing ways of reporting which are
appropriate to social enterprises and which reflect their values.
The UK Social Audit Network can be contacted at
http://www.cbs-network.org.uk/
New Sector magazine seeks to promote the principles and practice of
collective enterprise, common ownership, co-operation and community control.
In particular it promotes enterprises whose governance, management and
ownership are characterised by democratic and participative structures at
worker, community and member levels. Further information contact the editor
at: editor@newsector.co.uk
or visit: www.newsector.co.uk
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