Judge Business School
There is Another Way: The Social
Economy
Dr Helen Haugh
Outline
Introduction: Background Context
The Social Economy
Policy and the Social Economy in England
Social and Community Enterprise
Community Ownership of Assets
Institutional Change
Conclusion: Rebuilding the Economy through Social and Community
Enterprise
2P
There is no alternative
3P
TINA
Minimal government intervention: reduced expenditure on public
services
Free markets: consumers exercise free choice and producers respond
to demand
Stimulate and support entrepreneurship and innovation
Focus on the individual
Private property
4P
Private property
Property rights extend over the right:
To use
•
Earn income from
•
To own
•
To Control
•
To change of use
•
To change the form and substance of
•
To sell
(Furobotn and Pejovich, 1972; Libecap, 1989)
•
5P
Market Efficiency
Theoretically, free markets are efficient
Not necessarily fair
Market failure
Negative impacts on:
•
Fairness
•
Equality
•
Social mobility
6P
The Economy
Prosperity for some, but not for all
Poverty
Social exclusion
Unemployment
Increasing pressure on public
expenditure
Rising consumer activism
2008 Crisis of capitalism and the
recession
7P
The Recession
How can we rebuild our way out of
the recession?
More of the same TINA
Keynes: manipulate aggregate
demand and increase public
expenditure
Is there another way?
8P
The Social Economy
Cooperatives, charities, voluntary and community organizations,
mutuals, non-profit organizations, community businesses, social and
community enterprises
Estimated 870 000 civil society organizations in UK
•
assets of £210 billion
•
total income of £116 billion
(NCVO 2009)
9P
Social and Community
Enterprises
Distinctive characteristics:
•
Enterprise orientation:
Trading goods and services
Public sector procurement
Asset based development
•
Social aims
•
Social ownership
10
Arts Factory and Power Factory
An independent Development Trust based in the
Rhondda Valleys, South Wales.
Aims to 'build a stronger community' by generating
income through enterprise and using it to provide
community facilities and services.
Established in 1990 by local people who were sick of
being labelled as "problems" and wanted to create
solutions.
Businesses: managed workspace, graphic design,
environmental design, stakeholder consultation.
Partnership with major utilities to create wind farm
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Institutional Support
2001
Social Enterprise Unit, Department of Trade and Industry
2002
Social Enterprise Strategy
1.
To create an enabling environment for social enterprises
2.
To make social enterprises better businesses
3.
To establish the value of social enterprises
12
Government Action
Community Interest Company (CIC)
Futurebuilders - £125 million investment fund
Social Enterprise Coalition
Community Development Finance Institutions (CDFI)
Community Investment Tax Relief
Extended Small Firms Loan Guarantee Scheme to social enterprises
Annual Social Enterprise Day
13
Community ownership of assets
Community assets: physical assets – village halls, community centres,
land and buildings
Enhanced property rights for communities
Income generation from asset based development
Other community assets: knowledge and skills; community action and
engagement
Benefits: for the organization, the community and society
14
Coin Street Community Builders
Located 13 acre site on banks of Thames , London
Has invested in social housing, shops, galleries,
restaurants, cafes and bars; sports and leisure
facilities, community development and support
programmes.
Established by local residents in 1984. Only people
living locally can become CSCB members.
The Board employs staff to manage the company on a
day to day basis.
Profits are not distributed but are ploughed back into
CSCB's public service objective.
15
Community Interest Company
Community Interest Statement
Community Interest Test
File community interest report annually
Asset lock: assets to be used for community purposes or transferred to
another asset-locked body
More than 2 000 CICs created
16
Institutional Change
New legal structure created which will protect community ownership of
assets
New government office and cabinet minister appointed in 2006: The
Office of the Third Sector and Minister for Third Sector
Opened up opportunities for business through public procurement
Created route for transfer of assets from public sector to communitybased organizations
Actively promoted social enterprises across government departments
17
Conclusion
Potential contribution to rebuild the economy through social and
community enterprise
Potential for social economy to be active in regeneration of the
economy and leading a path out of the recession
Top down encouragement and support from government
Bottom up participation of communities
Cross sector support from the private sector seeking new ways of
partnering with organizations in the social economy
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