Can local government help build a social enterprise sector?

Life in the Welsh valleys can be tough for entrepreneurs and the socially-minded. Inter-generational dependency on benefits, poor educational attainment and a lack of attractive job opportunities has created an air of desperation in many communities across south east Wales.

There is no doubt that social enterprise represents a significant opportunity for economic growth and job creation during these times of austerity. With the squeeze on public sector finance causing an inevitable reduction in service provision, the third sector in its widest definition has a tremendous opportunity to position itself as the first choice for delivering any number of services that would have once been the core business of the public sector.

From social care to adult education and leisure provision through to libraries, well-organised social enterprises stand to benefit from the increasing level of devolved contracts issued by the public sector.

Too often, however, these services are ‘spun-out’ of their former host, rather than developing organically in response to a defined need, or to fill a gap in the market with new provision.

Inevitably, in these circumstances there is a degree of cultural continuation, which is to say that simply changing the sign above the door doesn’t change the values of the employees walking through it. Strong leadership is required to make these ventures a success, and there is often pain to be had along the way.

Innovation within the social enterprise sector is critical to maximise the benefits for communities and their residents, and cumbersome, bureaucratic public sector organisations are not necessarily best placed to deliver this.

They can lack the ability to move quickly to fill a gap; have lengthy chains of command resul in protracted decision-making and are inherently – and correctly – risk averse, as there has to remain an underlying commitment that ensures they work for the greater good for the greatest number of people.

This is not necessarily a criticism. Market research has shown that residents have more trust in their local authority to ‘do the right thing’ for them over the long term, compared with major retailers and even central government.

This sense of being embedded in our own communities is invaluable when it comes to social care and education, for example, but does not lend itself well to cultivating an entrepreneurial spirit.

That’s not to say that we can’t work alongside those individuals and organisations that are in a position to innovate!

The public sector needs to be willing to try new things and to use its own assets – including its staff – more flexibly to try to overcome social and economic problems in their areas of activity.

For example, in Torfaen we’ve recently agreed to provide space in a building north of Pontypool to a social enterprise specialising in the provision of co-working space, Indycube CIC.

The space is going to be shared with our local south east wales community economic development (SEWCED) team, whose staff have expertise in banking and corporate finance, planning, management information and data analysis, and our Welsh government-funded enterprise facilitator will support the Indycube tenants to access advice and support at all times during the working day.

This should help the fledgling businesses and solo entrepreneurs – social or otherwise – that are based there to develop and move towards sustainability more quickly than would have been the case working from the spare room or coffee shop, creating job opportunities for local residents along the way.

To quote the vernacular: this isn’t rocket science and, if I am being honest, Indycube will succeed regardless of whether the local authority locates a small team in the same physical space. Is that a reason not to try and enhance the offering, though?

If there is no discernible benefit for Indycube’s clients, then it’s simply a case of ‘nothing ventured, nothing gained’. But who is to say that an idea that would have otherwise been mothballed doesn’t become the next big thing, simply as a result of having access to different people with different backgrounds?

It’s about trying to shift the culture, to meet in the middle and to play to our respective strengths. That’s the opportunity for social enterprise as I see it.