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The Rt. Hon. Patricia HewittNCVO Annual Conference |
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| I am delighted to be here today and to see so many friends and familiar faces.
As many of you will know, I have spent much of my working life in the not-for-profit sector, at Liberty and then setting up the IPPR. And I think that this is a really exciting time for this sector. Under this Government, we are seeing a relationship develop between the public and private sectors. But we sometimes need to be reminded that there is a third sector – voluntary organisations, self help groups, charities, community organisations and faith groups – the not-for-profit sector. And we need to recognise that these organisations have independence at their heart. Free from Government and from private shareholders. Giving them a unique capacity for innovation. It enables the organisations to move faster and more radically. Enabling people to find their voice. This sector has traditionally relied on donations from individuals and grants. And through the tax review of charities being undertaken by the Treasury and the Giving Campaign, we want to ensure that there is a better operating environment for the not-for-profit sector. But the sector is far more robust than the image of grant-dependent charities might suggest. More income is now raised from investments than is donated by the general public. The NCVO estimate that net assets stand at over £70 billion. A powerful asset base for any entrepreneur. Some within the sector are now turning to business to create new freedom. I did the same when I ran Liberty – then the National Council for Civil Liberties. We started a bookshop which both satisfied the need for information on civil liberties but also generated income and helped remove our dependence on grants. There are now a range of organisations moving to become social enterprises. Like Belgrave Baheno in Leicester which is supporting mainly Asian women in a number of different aspects of their lives. They have a turnover which many small businesses would envy – £250,000. But they have bigger plans. Developing family services through the Peepul's Centre which will provide a focus for the Asian communities as well as a fitness centre, restaurant and recording studio. We all know the work of the Bromley-by-Bow Centre in London's Docklands based on the philosophy of communities working together. But it is not just the role of the voluntary and social enterprise sector to help regenerate neighbourhoods. Business itself has a part to play. I am delighted that Charlie Falconer has today launched Business Brokers, a pilot scheme to bring new jobs to these areas by promoting to businesses the benefits of renewing communities and to make it easier for them to get involved. Social enterprises are also helping to reform public services. Many of you will know about the work of Greenwich Leisure in London – showing how a social enterprise can release the creativity of employees, drive up productivity and improve the provision of leisure facilities at a lower cost to the council – providing a better deal for both the residents and the ratepayers in Greenwich. It is a wonderful example which is being followed by others. Like Kettering Community Leisure in my region in the East Midlands. There are now over 60 local authorities that tender out their leisure contracts to social enterprises. Social entrepreneurs are becoming part of the very fabric of our society. And mainstream thinking is embracing the concept of organisations which embrace moral purpose alongside entrepreneurial expertise. I believe there is now a window of opportunity. A chance to resolve the conflict between strong social purpose and a sense of enterprise. And my Department has a valuable role to play in sponsoring social enterprise. That is why I set up the Social Enterprise Unit in the DTI last autumn. To get a better understanding of social enterprises, to identify more clearly issues which affect them and, where necessary, take down the barriers. I appreciate that the social enterprise approach can be daunting. That we have to ensure that at the same time as strengthening the demand for social enterprises, we build the infrastructure to support them. We need to keep the balance. We need to ensure that expectations can be met on both sides. That is the strong message coming out from the social enterprise-led working groups set up by the Unit. The groups have been looking at the supply and demand issues. How they can be met and how they can be matched. The work of the groups will be brought together formally in April but five major themes are already emerging. Awareness raising First, there is a real need to raise awareness of social enterprises and to understand and deal with perceptions about the sector. I feel that it suffers twice. From a view outside the sector that it is full of amateur do-gooders – whilst some within it still believe that being business-minded means giving up on principles. Both perceptions are wrong. We need to make clear within the wider social economy that being business-like is a way of strengthening independence. Look at the example of the Proper Job Community Co-operative in Devon which started out turning garden waste into compost and giving this free of charge to the community. But as the project grew, it took the next step and began to make a small charge for the compost. That was five years ago. Proper Job now has much broader economic and social development objectives. It runs a market garden, a shop and a café. It has created 14 jobs in an area where employment in agriculture is declining. It makes profits. And it uses these to expand the business and further promote its aims. It helps no end that the Eden project – one of the huge national, and international, successes of the past few years – is a not-for-profit charity. I am delighted that Tim [Smit] is here today. To tell you about this exciting project. The working group looking at how we can raise awareness of social enterprise clearly believes that people like Tim and others like him can help change the view of this sector – giving people a better and more accurate understanding of social enterprises. Building the capacity of the sector Second, we need to make social enterprises want to climb up the quality ladder – to raise their horizons – to see that there are many different ways of achieving their aims. Making the sector more business-like. Showing that moving away from dependence on grants actually allows social goals to be met in a more sustainable fashion. The importance of business support Third, we need to ensure that the specific needs of social enterprise are met in terms of business support. I know there are concerns that Business Links haven't always understood the needs of the not-for-profit sector. That is something I raised when I was Minister for Small Business. I wanted to ensure that Business Links were more inclusive – meeting the needs of people in disadvantaged communities, of women, of ethnic minorities and of the not-for-profit sector. And we are seeing good developments. Social Enterprise London has a seat on the Business Link board. And the East Midlands Development Agency, with the New Economics Foundation, has set up Social Enterprise East Midlands. People are beginning to see this as a sector in its own right. We will also learn from the project run by Business Link Norfolk which, with support from the Phoenix Development Fund, is working with community and voluntary organisations in disadvantaged urban and rural areas – enabling participants to develop entrepreneurial skills and establish new markets and trading opportunities for sustainable businesses. Imaginative financial solutions Fourth, we need to ensure that the right funding is available. This is an exciting time for social enterprises. As well as the traditional sources of finance to which they have had access, new routes to finance are becoming available. Helped by intermediaries such as the Community Development Finance Initiatives. And also by the increasing contribution being played by some of the major banks who are sometimes making relatively small sums available. The group has also been looking at other imaginative financial solutions. Looking, for example, at the role of equity and venture capital funding. Working in partnership Finally, all the groups have been keen to emphasise that the Social Enterprise Unit should not reinvent the wheel. That it should reflect and build on the networks of expertise and experience that already exist.And it has been doing this bringing organisations together to look at the reform of the law – and I am pleased that the Government has given its support to the recent Private Member's Bill – at business support and finance. Conclusion Social enterprises are one model for a more inclusive and sustainable future. And I have been delighted to share my thoughts about them with you here today.I also look forward to working in partnership with you in the future. |
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Other speeches by The Rt. Hon. Patricia Hewitt
(the following are available from the archive) |
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