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The Rt. Hon. Patricia HewittSocial Enterprise & Co-operatives: 21st Century Businesses |
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CHECK AGAINST DELIVERY It's a real pleasure to be here this morning and to see so many old friends and colleagues here from the social enterprise and co-operative movement. Some of you, of course, joined the Prime Minister and myself at breakfast this morning. And, as may already have been reported, we had a really useful and very lively discussion. There is no doubt at all that the potential of co-operatives and social enterprise is very firmly on the Prime Minister's radar screen. And the potential, in particular, of social enterprise to contribute both to our public service reform agenda and to neighbourhood renewal and regeneration is very well understood at the top of Government. It was a very interesting discussion and one of the points that came out most strongly was the fact that we have to understand that social enterprises and co-operative businesses are about both a social purpose and about profit. I am aware that I sometimes use the phrase 'not-for-profit' as a short hand for this third sector whereas actually social enterprises and co-operative businesses have to make a surplus which can then be ploughed back and re-invested. It reminded me of something that Robin Owen said many decades ago. The language is a little 19th century but the spirit still seems to me to be absolutely right, "I was obliged to commence with a combination of the vicious and inferior conditions – conditions to which the population had long become accustomed, and to many of which they were strongly attached. I also had to meet the objections of my partners, who were all good commercial men, and looked for a good return on their capital." And that combination of purpose and profit was very much a theme for our discussions this morning and, I am sure, of this event today. As, of course, was the link between co-operatives and social enterprises. Because although not every social enterprise is a co-operative, it would not be wrong to say that co-operatives are social enterprises. From its very roots in the 19th century, the co-operative movement has had as its core principles social concern and a commitment to fair trading. And today's social enterprises have grown out of that rich and strong heritage and share many of the same values and principles. Although those values and principles stem from the 1840s, they are just as relevant today. I look around the country and I look at the impact of co-operatives, at the impact of the social economy generally. We heard this morning from Mark Richardson from Aspire, an organisation that the Prime Minister has himself visited. In the two years since they began, Aspire has created jobs and found accommodation for 120 homeless people. They are now working through nine regional businesses. Through various business activities, which include their fair trade catalogue, a gardening and domestic services business and a bicycle repair scheme, they offer jobs which pay more than benefits would have done. And all contributing to the intermediate labour market, that enables homeless people to move out of the benefits system, off the streets, to build up their skills and self-esteem, and then move onto further jobs. And Aspire, like many others, is committed to social enterprise activity, moving away from grant dependency. Although Mark properly made the point that for some of their activities, grants or public sector involvement will always be needed. They, and so many others, have also shown that moving an individual into work and away from benefit dependency is absolutely central to enabling us to solve the massive social problems. Aspire is a company limited by shares. But social enterprises aren't defined by a single legal form. The social economy includes co-ops, the trading arms of voluntary organisations and development trusts. And so the social economy sector is a complex area and one where the boundaries are not necessarily distinct and don't need to be. What instead we need to focus on is the set of characteristics – the way of behaving. Of course when you look at that then the connections between modern social enterprise and the traditional co-operative movement become particularly clear. Take for instance autonomy and independence – the 4th co-operative principle – which is at the heart of the social enterprise approach. Part of the strength of social enterprises is their aspiration and their ability to be free to respond quickly to the changing needs of customers and clients. The ability to innovate which, of course, makes them particularly valuable in the enormous task ahead of public service transformation. And often, even though social enterprises might not be organised as worker or customer controlled businesses, social enterprises are close to those they serve, and respect those with whom they work. And in many cases, those whom they serve are also those whom they employ. In spirit, they are close to the principle of democratic member control. And equally they operate in the spirit of the 5th co-operative principle of providing education and training. Many do this directly, others in different ways by giving confidence and a sense of ambition to different and often vulnerable individuals. Finally, it is clear that social enterprises share the 7th co-operative principle of concern for community which, for me, is at the heart of the social enterprise sector. For some social enterprises, their community is a very local one – I see that in my own constituency in Leicester. For others, it is a community defined not by geography but by common characteristics – the long-term unemployed, a history of addiction, a prison record. For others the community is an international one and I have no doubt there is much that we in the British social enterprise sector can learn from colleagues and inspiring examples in many developing countries where social enterprises, the Grameen Bank to name just one, are paving the way in sustainable development. But social enterprise also has its own distinctive features. It has grown out of the co-operative movement. And taking much of the best from that great rich tradition. Social enterprises today really do pride themselves on their innovative, entrepreneurial, flexible and adaptable ways of working. I am sure that many in the co-operative movement will readily admit that is not always the way the co-operative movement is seen today. And this can be unfair. Look at the work of the Homes for Change Housing Co-operative which has developed one of the flagship schemes for redevelopment in Hulme, Manchester. I look at the way the co-operative stores are transforming themselves. In the deprived neighbourhoods in Leicester, the co-op is very often the only place to shop. And it has been very noticeable over the last few years that many are being refurbished, offering a much wider range of goods and also getting involved very directly in neighbourhood regeneration. There is much that the well-established co-operative movement has to offer to the growing social enterprise sector. We have seen some excellent examples of Co-operative Development Agencies at work. Lancashire CDA, amongst others, has for the last 15 years been providing professional assistance to community businesses as well as co-operatives. We can learn from that example. Douglas Alexander, the Minister for Corporate Social Responsibility and Social Enterprise, and I know that becoming a social enterprise is not at all easy. And I decided when I became Secretary of State for Trade and Industry, to set up the Social Enterprise Unit. We are the department for enterprise – we ought to be the department for social enterprise as well. I believe that we are the right part of Government for social enterprise – working very closely and in partnership with colleagues right across national and local government. Using the Social Enterprise Unit, we want to identify more clearly what the road blocks are and how to remove them; and find out what the opportunities are and how we can help you and new social entrepreneurs to exploit the opportunities. There is a range of issues there. Including access to finance. Which can be a problem for any small business but is particularly difficult for a social enterprise because the banks often don't understand or find it difficult to evaluate. There are, of course, sympathetic banks – the Co-op and NatWest are represented here today as, I see, are Triodos and Barclays. The Community Development Finance Initiative will help to provide access to finance for social enterprises and the Community Development Venture Fund has been developed from the recommendations of Sir Ronald Cohen's Social Investment Task Force. So we need to move ahead. Not just Government but working in partnership with the financial sector to ensure that finance is readily available to social entrepreneurs. We also need to look at the whole issue of public procurement and best value and how we can transform our public services. Everybody here is familiar with the story of Greenwich Leisure. There are many other examples where social enterprises can contribute very directly to renewal and regeneration through public service delivery. I think all too often that those involved in public procurement don't really understand the scope of contracting with a social enterprise or supporting the creation of a new social enterprise in order to meet the objectives set by the local council, health authority or appropriate body. Clearly we have a role with you to try and open up these channels. We need to ensure that the role of social enterprises is very clearly understood in the whole field of neighbourhood renewal and neighbourhood regeneration. All of us who have been involved in this work know that you cannot create sustainable communities in these desperately deprived neighbourhoods simply through public service or simply through the private sector. We have to enable people to get the skills and the confidence. We have to connect them with the jobs that often exist half a mile or a mile down the road. Help them get over the enormous physical and psychological barriers. We need to bring business into the area. We have to create sustainable businesses within the community itself. Some of those will be traditional for-profit private sector businesses. But others will be community-owned businesses that simultaneously build the capacity and the employability of the local residents. That build the capacity of the community and local residents themselves to make decisions about their own future. And create new markets within communities where at the moment there are no effective markets. There is a huge role there for social enterprise which is well understood by some local councils and neighbourhood renewal partnerships but not by all. And we also have to ensure that there is effective business support for social enterprises because they, like every other business, need help with business planning, cash flows and all the other skills to run a successful business. My challenge to Business Links is to make sure that they get out there and meet the needs not only of traditional entrepreneurs but also the needs of the social entrepreneur and entrepreneurs in deprived and disadvantaged areas. And we are seeing some good developments. Social Enterprise London has a seat on the Business Link Board – educating the Business Links community. We heard this morning about a programme in Berkshire Business Link – a real model of how Business Link advisers can take their services into a social enterprise. And in my own region in the East Midlands, the Development Agency and the New Economics Foundation has set up Social Enterprise East Midlands. So there is work going on there but more for us to do within the Small Business Service. What we have been doing within the Social Enterprise Unit is to work with partners – many of you here – in a number of working groups to look at what our priorities should be and how we can most effectively add value. What we can do is to join up the pieces across Whitehall and ensure that there is a home for social enterprise within Government. And that there is a very strong voice for social enterprise. Ensuring that the potential is understood and making it easier for more of you to fulfil that potential. Douglas Alexander and I look forward to working in partnership with you to realise that potential. |
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Other speeches by The Rt. Hon. Patricia Hewitt
(the following are available from the archive) |
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