What’s the role of the voluntary sector in local economies?

warren escadaleI hope you’ve had a chance to look at Thriving Places, Voluntary Sector North West’s campaign with the Centre for Local Economic Strategies (Cles).

For us it represents an important statement about the future direction of the sector and its role in local economies and places. We know that the social and the economic are, in reality, two sides of the same coin (one shinier than the other?) and yet the systems that allow this kind of joined-up thinking and working are rare. We think this needs to change and that this is a good time to make that happen.

There’s a developing debate about what a ‘good economy’ looks like.  Leading economists have highlighted the central importance of building human capital and inclusive economies.  The Nobel prize-winning economist Amartya Sen makes the case for focussing on human capabilities and the idea that economic growth must be built on social reforms (education, public health) that give people the chance to engage economically.  Nancy Folbre is reassessing what should, at least in policy terms, count from an economic perspective (e.g. caring for relatives).  While Joseph Stieglitz (another Nobel prize-winning economist) makes the cases for how inequality is holding back growth and how trickle-down economics can be seen as a myth (20 minute TedX talk, drawing on his book, The Price of Inequality).

These aren’t isolated statements.  A recent Associated Press survey of 36 US private, corporate and academic economists agreed with Stieglitz.  And this comes amid a series of highly significant policy papers and literature reviews conducted by the International Monetary Fund which has been analyzing the impact of income inequality on growth and sustainable growth, in particular, Redistribution, Inequality, and Growth, byOstry, Berg and Tsangarides and Inequality and Unsustainable Growth: Two Sides of the Same Coin? by Berg and Ostry.

So, in short, what does this mean?  For me, the big lesson from this growing evidence base is something ridiculously grand about the importance, and important interrelationship, of social and economic inclusion.  They are two sides of a coin that drives sustainable growth.

It doesn’t take a huge leap to see that the voluntary and community sector should have a crucial role in creating a ‘good local economy’.  Thriving Places which builds on our own and Cles’ work and thinking, identifies three important aspects where the sector’s role needs developing:

  1. The sector is a significant economic actor in its own right:  It includes the excluded. It grows where markets fail.  It delivers holistic (social and economic) approaches.
  2. The sector can connect the social and the economic:  It enriches the lives of workers.  It supports entrepreneurial activity.  It builds local economic vibrancy and resilience through community institutions and networks. It supports the creation of human and social capital.  It can support those far from employment into employment.
  3. The sector can reduce public service demand: (e.g. by mobilising relevant and willing community assets).  It mobilises social power and builds self-reliant communities, grows community assets, and supports co-design and co-production.  It can change social norms.  It can build self-help, wellbeing and community-resilient models of organisation.

To do this we think we need to more fully demonstrate the sector’s role in a place and community, and how this can be developed (without sleepwalking into job substitution); we need the right evidence, language and resources; and, we need, as a sector, to be clear about our own collective purpose and role in those places and communities.

We know the conversations are changing, we know that the public sector is going to see far more cuts (we are not halfway with the planned cuts) and increased pressures and we know that the local systems will continue to change. We can see very gradual system change beginning to bring the social and the economic closer together: city deals; whole-place community budgets; new council-driven public health activity drawing on the learning of the Marmot Review into the socio-economic determinants of health inequality and possibly on the evaluation of the Lottery’s wellbeing programme; through the recent development of local EU strategic and investment fund strategies with their earmarked social (and economic) inclusion remit, and, potentially, through new local growth deals currently being negotiated by local enterprise partnerships.

I looked up NCVO’s advice on how to run an effective campaign. It said identify champions of your cause. I think this campaign is more about making people champions of their own cause – providing the right tools and supporting thinking.  But, as a small step, I think we should stop saying ‘social inclusion’ when we talk about the role of the voluntary and community sector. In some ways this phrase has lost its meaning. What we really mean is ‘social and economic inclusion’. How about we say ‘that’s our job’ instead?


Notify of
Inline Feedbacks
View all comments
Help us break the news – share your information, opinion or analysis
Back to top