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By Ben Metz, June 1, 2010 12:07 pm

Below is the text of the open letter I was invited to write by Caroline Hartnell, editior of Alliance Magazine, for this months edition.  It’s a follow on piece from the publication of my Social Economy in the UK mapping report and the Guardian article published the same week as the Skoll World Forum.  It is intended, as were the previous posts, to stimulate discussion and galvanise action about how to best support the social economy that is emerging all over the world…

Interestingly this same theme has been picked up in a blog post from Tim Draimin, one of the fantastic Canadian team working to develop a thriving social economy across the pond…

Supporting the social economy worldwide?

European foundations have a long history of supporting knowledge exchange to further the social economy, in Europe and increasingly in other parts of the world.  A window of opportunity has now opened up to build a global movement of developing social economies.

FutureBuilders, the loan fund supporting third sector organizations in England to bid for and deliver public service contracts, was established in 2003.  Initially feted as the panacea for social enterprises, the fund has received a somewhat mixed reception.  Despite a highly critical 2009 National Audit Office report, a recently completed evaluation by Sheffield Hallam University finds that the fund has had a positive impact.

So why focus on varying assessments of one particular UK government intervention to support the social economy?  Obviously there are lessons to be learned in the UK, by government and social enterprises alike. But there is a bigger issue at stake, namely the development of the social economy in a myriad countries across the globe.  Individuals and delegations from at least 20 countries are expressing interest, through repeated trips to the UK, in exploring what has and hasn’t worked in the UK.  The recent Skoll World Forum in Oxford had delegations from Canada, China, the US and New Zealand engaging with the likes of Volans and UnLtd to better navigate the maze of social economy support in the UK.

Support infrastructure is beginning to emerge. The British Council has recently allocated £3 million to assist around a dozen countries (including Thailand, Indonesia, Croatia and Turkey) to explore the UK social economy.  But a unique opportunity appears about to be missed.  Any semblance of coordination is lacking.  Sharing mechanisms are not in place. Information is flowing in one direction – from the UK to the visiting ‘beginners’.

We can continue in a business as usual manner with uncoordinated groups from all over the world descending on the UK to be given a less than complete picture of the UK’s social economy.  Or we can expose the whole story of social enterprise development here, and the growing pains, successes and failures experienced on the way.

The UK social economy has a huge amount to share with the world – both good and bad.  Many of the interested countries are less well off than the UK and simply don’t have the resources to make the same mistakes we’ve made.  They may have just one chance to make their social economy work.

So come on foundations and long-term supporters of the social economy, let’s get resourced up to help the rest of the world to take their best shot at getting it right.

Ben Metz
www.benmetz.org

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By Ben Metz, April 23, 2010 7:05 am

My piece on the Guardian blog posted last week (found here) has stimulated a series of interesting reactions and discussions.  Most notable was the rather opinionated and angry blog post by Stephen Bubb, CEO of ACEVO, who accuses me of exactly the same biased view he broadcasts in his piece.  The main complaint he had was my one-sided view of Futurebuilders, the investment fund he is chair of.  Jonathan Lewis, CEO of The Social Investment Business which runs Futurebuilders, posted a couple of much more useful comments to the original Guardian piece.  He provided a link to a recent study by Sheffield Hallam University that gives positive feedback on Futurebuilders in direct contrast to the rather damning criticism of the fund by the National Audit Office and the Public Accounts committee in 2009 and best summarised in Third Sector Magazine.  Credit goes to both of them though for flagging this up – it’s informed a piece I’ve written for the June edition of Alliance Magazine that I’ll post here in due course.  And I’ve adjusted the relevant entry in the report I posted on this blog.

A more balanced discussion was also had with Peter Holbrook, CEO of the Social Enterprise Coalition and Nick Temple, Development Director of the School for Social Entrepreneurs, contributing.  Both pointed out while the Social Enterprise Ambassadors programme, that I criticise in the Guardian piece, has had growing pains it has also delivered real benefits.  There’s an evaluation of the programme due soon so it’ll be interesting to see the findings of this.  Nick also makes a very valid point, asserting that ‘high level strategy’ is exactly what we don’t need and explains that SSE really does practice what it teaches: learning by doing.  A lesson for us all I believe.

Most interestingly are the general, face-to-face, discussions that have kicked off.  I’m chatting with a host of the providers of support to visiting international delegations.  We are exploring what coordination can be put in place to realise efficiencies and effectiveness and how we can improve communications so we can learn from these visitors and they can learn from each other.  Watch this space for further updates…

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By Ben Metz, April 5, 2010 6:32 pm

This post is intended to introduce the report now published on this blog: The Infrastructure of the Social Economy in the UK.  It is also intended as a challenge to our sector to share, serve and act strategically to support the development of the social economy internationally.

Thanks to Nova Ekonomika we have a comprehensive report on the state of the social economy in the UK

I recently completed a piece of work for the Czech Republic based organisation, Nova Ekonomika.  The work was to map the infrastructure of the social economy in the UK.  Specifically I was tasked to look at what Government has historically done to support the sector’s development and to identify what support provision is available to social economy actors in the UK.  The entire report is now published on this blog and all chapters are linked to here.

And it’s internationally of interest

With increasing interest from a host of countries throughout the world in the development of the UK social economy, the publication of this report would appear timely.  The British Council is assisting around a dozen countries to explore the UK social economy in an attempt to learn and stimulate development (in Thailand, Indonesia, Croatia, Turkey and China, amongst others).  And with the next Skoll World Forum just around the corner, a host of individuals and delegations from across the world are descending on the UK and are picking the collective brains of our sector.

However, structural problems exist between the UK and the rest of the world

There is, however, a problem.  Coordination is lacking.  Sharing mechanisms for learning are not in place.  Information flows appear to be uni-directional (from the UK experts to the visiting ‘beginners’) rather than flowing in both directions, bringing the potential for important learning back to the UK.  And let’s not even mention the possibility for networked learning across all contributors.

So it’s time to change this…

So this is an initial contribution and possibly a first step in opening up dialogue and building a platform for the healthy sharing of information, globally.  Why I do I think this is needed?  Well there’s a huge amount the UK social economy has to share with the world – both good and bad practice.  And with many of the interested countries less well off than the UK it’s likely they won’t have the resources to make the same mistakes we’ve made.  They may just have one chance to make their social economy work.   And to give them their best shot at getting it right I believe we need a level of openness, sharing, and high level strategic planning that is sorely lacking at present.

This is the opening gambit from me to stimulate the right environment for success.  Watch this space for a few other swerveballs I’ll be throwing in the forthcoming weeks and months.  And please do get in touch if you have something to share or want to take me to task on – on any of the above or any of the report…

And now a quick note on the report

The work turned into a mammoth task: some 110 pages and 27,000 words!  Prior to commencement of the work, Nova Ekonomika agreed that the report be made publicly available.  So the publication of the report here is down to their forward-thinking and intention to foster public benefit.  Everything you see here is published on a Creative Commons license that allows anyone to use it for non-commercial activities as long as the author is credited.  And, if you do use it, it would be great if could credit Nova Ekonomika too.  Without them this resource would never have been born…  So if you want to reuse anything from this report, or indeed from anything from this blog, please go to the end of the table of contents, linked below, to read more about the license arrangements.  Thanks.

And then on with the show!

The Infrastructure of the Social Economy in the UK – Table of contents

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By Ben Metz, April 4, 2010 8:58 pm

Report structure and contents

The report was commissioned by the Czech Republic based organisation Nova Ekonomika to map the infrastructure of social economy in the UK.

The brief required: a map of the main spheres of action in the social entrepreneurship sector in the UK identifying the main parties concerned from public, private and NGO sectors and their roles; a description of the historical development of the government’s approach to social entrepreneurship; and a general commentary on the appropriateness of these developments.

The report details the scale of activity instigated across and undertaken by government and social economy sector actors over approximately the last 12 years and provides commentary on each of the government interventions detailed.

Summary tables are provided at the beginning of the report and a comparative analysis is carried out of social economy support actors using basic X-Y axes built from a simple rating of each organisation of the focus of their activity.

The work turned into a mammoth task: some 110 pages and 27,000 words!  Prior to commencement of the work, Nova Ekonomika agreed that the report be made publicly available.  So the publication of the report here is down to their forward-thinking and intention to foster public benefit.  Everything you see here is published on a Creative Commons license that allows anyone to use it for non-commercial activities as long as the author is credited.  And, if you do use it, it would be great if could credit Nova Ekonomika too.  Without them this resource would never have been born…  So if you want to reuse anything from this report, or indeed from anything from this blog, please go to the end of this post to read more about the license arrangements.  Thanks.

The Infrastructure of the Social Economy in the UK – Table of contents

Executive Summary

• Report structure and approach
• Study comments: overview
• Study comments: Government intervention in the UK social economy
• Study comments: The social economy support sector

The historical development of the UK government’s approach to social entrepreneurship

Current state of the sector – overview

Comments on the UK government’s approach to the social economy

The main spheres of action in the social enterprise and entrepreneurship support sector in the UK

Summary table of government interventions into the social economy, 1998 to present day

Summary table of the main actors in the UK social economy support sector

Appendix 1: Details of government interventions into the social economy, 1998 to present day

• The Compact
• Policy Action Team 3 – ‘Enterprise and Social Exclusion’
• The Single Regeneration Budget and ESF and ERDF funding
• The Invest to Save Budget
• The Social Investment Task Force
• The Phoenix Development Fund
• The creation of the Social Enterprise Unit
• The Role of the Voluntary and Community Sector in [Public] Service Delivery
• DTI Social Enterprise Strategy
• Social Enterprise Day
• Futurebuilders
• Community Interest Companies
• CapacityBuilders
• The creation of the Office of the Third Sector
• The Social Enterprise Action Plan
• Inclusion of social enterprise in the UK government’s mainstream business survey
• The Action Plan for Third Sector Public Service Delivery
• Report on the future role of the third sector in social and economic regeneration
• The Social Enterprise Ambassadors Programme
• National Programme for Third Sector Commissioning
• Community Shares
• Communitybuilders
• Real Help for Communities
• Social Impact Bonds

Appendix 2: Current engagement with the social economy across government, by department

Appendix 3: The social economy in the devolved administrations

• Scotland
• Wales
• Northern Ireland
• The English Regional Development Agencies

Appendix 4: Categorising the main actors in the UK social economy support sector

• Visual representations of the main actors in the UK social economy support sector foci

Appendix 5: Development support agencies and functions:

• Social enterprise specific support
• Social entrepreneur specific support
• Sector specific support for the social economy
• Business development support for the social economy
• Higher education and the social economy
• Training in the social economy
• Secondary school education and the social economy
• Financing in the social economy (Grants, Foundations and Loans)
• Communications support in the social economy
• Measurement of social impact / social return on investment
• Important commentary on support to the social economy from Rocket Science

Appendix 6: Definitions of terminology used across the social economy in the UK

• Social Enterprise
• Social Entrepreneur / Social Entrepreneurship
• Social Economy
• Social Finance

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By Ben Metz, April 4, 2010 8:56 pm

The report was commissioned by the Czech Republic based organisation Nova Ekonomika to map the infrastructure of social economy in the UK.

The brief required: a map of the main spheres of action in the social entrepreneurship sector in the UK identifying the main parties concerned from public, private and NGO sectors and their roles; a description of the historical development of the government’s approach to social entrepreneurship; and a general commentary on the appropriateness of these developments.

The report details the scale of activity instigated across and undertaken by government and social economy sector actors over approximately the last 12 years and provides commentary on each of the government interventions detailed.

Summary tables are provided at the beginning of the report and a comparative analysis is carried out of social economy support actors using basic X-Y axes built from a simple rating of each organisation of the focus of their activity.

Comments (1)

By Ben Metz, April 4, 2010 8:55 pm

It is clear the UK is the world leader in government backed social economy interventions and is set apart in this respect from any other country.  Therefore no attempt is made to compare UK activity to the Czech Republic or to other countries due to the resource requirements such an undertaking would require.

A range of observations, drawn from the in-depth study of both government and the social economy support sector, can be made and are summarised hereafter.

Consistent pressure applied by lobbying organisations has been a substantial contributor to the development and implementation of much of the government’s intervention in the social economy.  This lobbying has generally taken a position of appreciative inquiry[1], where lobbyists have been challenging but supportive, collaborative and rarely confrontational or negative.  This has led to the development of strong professional relationships between government and the sector which right now are best exemplified by a series of high level job swaps between government ministers and social enterprise chief executives[2].

However, both the quality of government interventions and that of support provided by second tier providers are highly variable.  Numerous examples of ill configured, delayed or badly timed and poorly executed government policy, legislation and financing exist throughout the history of government intervention in the sector.  Equally, support organisations often establish inappropriate services based on aspiration rather than need that are inefficiently configured.  Further inefficiencies, in government and the support sector, are often compounded by high overheads relative to size of resources allocated for direct support.  This fragmentation of support drives reduces impact realisable from the finite resource based allocated.

Both government and the support sector appear to fall victim to a “political need for success” which overshadows the benefits that honest evaluation and transparency would have on the potential to improve government intervention and support services.

An obvious disadvantage the UK experience is the lack of opportunity to compare its interventions and overall approach with similar activities undertaken by other countries.  This is the case due to the fact that the UK is significantly ahead of most of the world in terms of government intervention and the provision of support.  Where comparison is possible it has generally not been undertaken, possibly in part due to the relatively introspective approach the UK takes to itself.

[2] http://www.cabinetoffice.gov.uk/third_sector/news/news_stories/10-01-29_divine_job_for_a_minister.aspx

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By Ben Metz, April 4, 2010 8:54 pm

The Office of the Third Sector, based in the Cabinet Office, has been instrumental in the acknowledgement of social enterprise as worth engaging with by no less than eight government departments.  Of note is the Department of Health’s social enterprise unit and investment fund, which has allocated £100 million to social enterprise development within the public health service.  It also created the “Right to Request”, which empowers National Health Service (NHS) workers to request their department be considered for externalisation as independent social enterprises delivering services back into the NHS.

Public service delivery by social enterprise has been a consistent and strengthening interest across government.  From early acknowledgements of the role of community based waste management organisations to deliver the national waste strategy (2000) through the creation of the £215 million Futurebuilders investment fund (2003) to the £100 million health fund (2009), much of government is committed in some way to scale social enterprise, and therefore community, involvement in public service delivery.

The future for social enterprise in the UK is unclear.  Both major parties have made clear policy statements in support of social enterprise.  However with broad and deep public sector expenditure cuts looming it is clear social enterprise and the third sector as a whole will be hit hard.  Within this environment it is broadly anticipated that financial mechanisms such as the Social Impact Bond detailed below are likely to come to the fore and replace a substantial part of the grant funding that has been underpinning government’s engagement with social enterprise to date.  Commentators are already warning about the loss of innovation acknowledged as a key feature of the social economy movement, as focus turns to delivery of outputs, outcomes and measurement of cost savings.

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By Ben Metz, April 4, 2010 8:53 pm

Support services to the social economy in the UK are well developed but not yet fully mature.  Many support functions are well provided, especially geographic and sector specific support, to nascent and early stage social enterprises and social entrepreneurs.  Later stage social enterprises generally have resources to purchase the support they require and are more suited to accessing mainstream business support in the UK from the likes of Business Link^[1].  Mid sized social enterprises often suffer from a lack of appropriate support availability.

The social economy support sector has emerged as an influencing force, both regionally and nationally, with government.  Many organisations initially established to foster the social economy have increasingly taken advocacy and lobbying roles to help drive and shape policy, legislation and funding regimes.  Indeed it could be said that support services have gone ‘hand in glove’ with intensive lobbying efforts conducted by the sector and aimed at government.

The results of successful lobbying have often resulted in the creation of funds and services designed to support the development of the sector.  Successful provision of support is noticed by government and can inform the configuration of their service provision.  So it can be said that there is a virtuous circle created when either lobbying or support is successful, and a vicious circle, where government withdraws funds and services, created when support is not perceived to deliver a successful outcome.  Additionally it is also worth noting the potential for conflicts of interest created by less than strongly ethical organisations desirous of retaining and building revenues when lobbying offers opportunities to build their organisations rather than meet the needs of the sector/s they serve.

Pressure on support providers and service providers / front line organisations is evident.  This pressure can be articulated as the need to be seen to be doing well when in some cases the service may be badly configured, wrongly targeted or simply poorly delivered.  Funders require success so it is in the support organisations best interests to prove they are successful rather than paint a more honest picture that might indicate the sector they serve is under developed, the service they provide is inadequate or the aspirations of the initiative are too high.  This desire for support organisations to be seen to be successful in fact reduces quality and perpetuates inappropriately configured services.

Definitions in the social economy

The final section of the report briefly defines a number of key terms used across the social economy in the UK. It also touches on the history of their development in case any lessons can be ascertained from this for the Czech Republic.  This section makes no attempt to discuss contemporary issues around whether for profit activity may be counted as social enterprise or social entrepreneurship and the impact this has on balances between public and private benefit realised by social economy actors.

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By Ben Metz, April 4, 2010 8:52 pm

Social enterprise in the UK has a long history, from the cooperative movement and mutual organisations of the 1800’s to the long-standing trading activities of many charities^[1].  Throughout the second half of the twentieth century support was provided to co-operatives to different degrees by different governments, culminating in a near complete withdrawal of central government support to co-operative development during the Conservative government of 1979-1997.  During the “lean years” of the 1980’s and early 1990’s co-operative and community development organisations often turned to European funding programmes to finance their work.  Then, as is the case now, committed individuals – both volunteers and paid – often subsidised projects, organisations and initiatives through their “sweat equity”, the provision of their own time, and sometimes funds, to ensure projects continued.

The mid 1990’s saw parts of the co-operative movement rebranding co-operatives as social enterprise, leading to the building of the current social enterprise movement and government embracing the concept.  This was very much driven by a concerted campaign from cooperative and social enterprise organisations.  The first government document to acknowledge social enterprises as a group of organisations concerned with delivering social or environmental objectives through trading was the Policy Action Team 3 paper titled “Enterprise and Social Exclusion” published in 1999.”^[2]. The report led to a number of government interventions and, combined with a strong lobby from sector leaders, instigated and focused initial government interest in the sector.

In 2002, the government launched a Social Enterprise Strategy^[3] and set up the DTI Social Enterprise Unit to co-ordinate its implementation.  The Social Enterprise Unit was borne, at least in part, from the continued lobby of government from the emerging social enterprise sector, and in particular the newly formed Social Enterprise Coalition. The Unit was established within the Department of Trade and Industry, and in 2006 became part of the newly created Office of the Third Sector^[4] (OTS), within the Cabinet Office^[5] at the centre of government.

The DTI’s Social Enterprise Unit and the subsequent Office of the Third Sector is at least in part responsible for the creation of units within many government departments and more than £500million of public investment^[6] targeting growing social enterprises and social entrepreneurs.  It has also been instrumental in developments such as The National Programme for Third Sector Commissioning, which has seen more than 2,000 public sector commissioners be trained in how to engage with social enterprise to procure services.

[2] http://www.hm-treasury.gov.uk/d/97.pdf

[3] http://www.cabinetoffice.gov.uk/third_sector/social_enterprise/action_plan.aspx

[4] http://www.cabinetoffice.gov.uk/third_sector.aspx

[5] http://www.cabinetoffice.gov.uk/

[6] Aggregate amount from four major placements (UnLtd = £100m, DoH SE fund = £100m, Futurebuilders = £225m & Community Builders = £70m)

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By Ben Metz, April 4, 2010 8:52 pm

There are more than 62,000 social enterprises in the UK, employing over half a million people, with a combined turnover of more than £27bn a year. Social enterprises account for 5 per cent of all businesses with employees and contribute £8.4bn a year to the UK economy – almost one percent of annual GDP^[1].  A notable feature of the UK social economy is the ready availability of data, something that is lacking in the other countries with developing social economies.

The vast majority of social enterprises in the UK can be considered small with only 19% having turnovers of more than £1million, are predominantly urban based (89%) and have a staff comprising, on average of 40% volunteers^[2].  Further, anecdotal evidence suggests that a very large proportion of social enterprises can be considered lifestyle businesses – where the entrepreneur pursues ideas and activities that inspire them emotionally or intellectually rather than choosing to tackle a particular issue strategically.  It is unclear whether this is a result of lifestyle choices made by social entrepreneurs or due to a lack of strategic capacity within support organisations and intermediaries across the sector (although probably resulting from a combination of factors including, but not limited to, these two).

[2] UnLtd Market size project August 2007 – report available upon request.