Community development worker Conal McFeely, of Creggan Enterprises, says Derry, and particularly its poorer areas, is facing a bleak time economically. But Stormont could help - by using the city as the base for a new initiative for development and jobs.
The world economy is in crisis. In fact it’s facing three distinct crises simultaneously.
The global financial system is in turmoil, following the so-called ‘credit crunch’; food prices around the world have risen so high that many people can’t afford the most basic foodstuffs; even in the ‘developed’ world, energy charges are rocketing so quickly that many people struggle to heat their homes.
Today – wherever they live on the globe – people are suffering because of the fall-out from a financial crisis which was not of their making. While corporate profits rise, the gap between rich and poor is widening; employment levels in mature economies are falling; small and medium-sized businesses – which have been starved of capital – struggle to survive; and access to essential local services is diminishing.
On each of these fronts, the Social Economy is picking up the pieces. Social enterprises and co-operatives are playing a critical role, but their contribution could be even greater if their potential was harnessed better.
Social enterprises play a strong role in our local economy, building on a tradition of self-help and co-operation. This approach has already spawned many successful social enterprises such as credit unions, housing associations, agricultural co-ops and community economic development organisations.
In addition, a wide range of voluntary and charitable groups deliver everything from health and social care, housing, retail and wholesale services, insurance, workspace and educational/training services, through to community environmental and arts initiatives.
Despite these successes, the sector remains relatively under-developed. If harnessed and resourced properly, the sector could significantly assist the Northern Ireland Executive in meeting the objectives in the 2011-2015 Programme for Government and help Derry deliver the kind of regeneration envisaged in the city’s ‘One Plan’.
Social enterprises are real businesses, set up to tackle social, economic or environmental issues. They engage in activities of a commercial nature in order to produce economic, social and community gain.
They often step in where the markets fear to tread, supporting disadvantaged groups and communities, meeting environmental challenges, regenerating urban and rural areas and supporting labour market interventions.
The Social Economy employs more than 11 million people in the EU, a staggering 6% of total employment. The livelihoods of three billion people – almost half the world’s population – are to a significant extent made secure by the Social Economy and more than one billion people world-wide belong to a social enterprise (including one person in every three households in Japan).
Countries and regions where the sector is well developed regard it as an integral and dynamic part of the ‘real’ economy, while accepting its unique character and social remit.
In December 2011 the European Parliament introduced a new investment priority in the ESF Regulation – the promotion of the social economy and social enterprises – offering some €190 million financial support through the Programme for Social Change and Innovation.
Social enterprise initiatives are one of the hidden gems of our local economy, but there are limited statutory support mechanisms available to initiate and support their development. This contrasts with the substantial help available to the private sector.
For the social enterprise sector to fulfil its full potential, the Executive, the wider Assembly and the statutory sector must help it overcome the barriers it faces by:
• Recognising the value of the sector and the considerable contribution it makes to our society, both economically and socially;
• Incorporating support for social enterprise within existing enterprise funding mechanisms (e.g. grant aid);
• Providing seed capital for new ventures or projects;
• Offering management expertise and support to start, grow and sustain social enterprises;
• Allowing them to compete for public procurement contracts on an equal footing with the private sector.
Both the PfG and the Ilex ‘One Plan’ contain proposals for developing and resourcing social enterprise programmes. Therefore a unique opportunity exists for regional and local government to devise a framework, which will help the Social Economy to fulfill its potential.
The Social Economy model can prove particularly effective in those areas most in need of recovery.
The Social Economy contributes directly to local economic and social well-being and to active citizenship through the provision of services linked to training and employment opportunities. Its inclusive nature addresses both economic disadvantage and social exclusion.
The Social Economy can help deliver some of the key priorities identified in the Programme for Government 2011-15, including:
• Invest in social enterprise growth to increase sustainability in the broad community sector;
• Provide £40 million to address dereliction and promote investment in the physical regeneration of deprived areas through the Social Investment Fund;
• Invest £40 million to improve pathways to employment, tackle systemic issues linked to deprivation and increase community services through the Social Investment Fund.
The problems identified in the PfG suggest that existing private and statutory responses have failed to deal with the problems affecting our most marginalised communities. We need a new body to bridge this “gap in the market”; we need to ensure that it is properly resourced and supported. I propose that a Social Enterprise Support Unit (SESU) should be established.
SESU should be set up as a non-departmental public body mandated to support, invigorate and sustain social enterprise across Northern Ireland. While its brief should be province-wide, there is a strong argument for basing the unit in Derry (given the history of self-help and models of best practice that already exist in the North West).
The proposed Social Economy Support Unit should:
• Provide a range of appropriate development supports to existing and emerging social enterprises;
• Proactively promote mutual exchange and transfer of experience and knowledge within the Social Economy sector;
• Identify and carry out appropriate research activities to assist the development of the sector;
• Promote and improve access to affordable social and equity finance provision;
• Generate greater employment opportunities through social enterprise.
The establishment of a dedicated support unit to assist Social Economy organisations towards sustainable development could:
• Generate new social enterprise start-ups in deprived communities;
• Create new pathways to employment;
• Attract investment into disadvantaged areas (which would be retained and reinvested in communities);
• Create greater community cohesion and sustainability by allowing the process of employee and community ownership to fulfil its potential.
Any enabling framework must be able to offer specialist advisory and appropriate financial support packages, and the SESU should itself be resourced – initially – for one Assembly term at least (around five years). If the Executive is serious about tackling economic disadvantage and unemployment in our most marginalised communities, then it must consider committing funding in the order of £20m for the development of the Social Economy. That figure might sound somewhat daunting; however, in January this year, Invest Northern Ireland confirmed it was handing back more than £21m from its annual budget because it hadn’t spent it! The previous year it returned more than £17m.
As the most recent unemployment figures show, Derry faces a bleak economic future in which our poorer communities will suffer most. Communities, which bear the brunt of poverty and unemployment, cannot address such enormous problems on their own. They must be empowered through genuine participation and local ownership, and they must be given the necessary resources. Therefore, any meaningful framework or policy in support of the Social Economy must include agreed, defined commitments, with realistic objectives, as part of a properly resourced strategy.
The statutory sector must ensure that it and the Social Economy sector work in harmony to harness the dynamism that exists in our communities and to identify opportunities. Stormont and local government must commit themselves to supporting and working in partnership with social enterprise initiatives, not just to tackle unemployment, poverty and disadvantage, but also to create a strong and diverse indigenous economic base.
The merit of a properly-resourced Social Enterprise Support Unit – to meet the growing needs and harness the undoubted potential of the sector in Northern Ireland – should be obvious to OFM/DFM and to the other government departments.
Ráth Mór Centre