Ash cloud lessons on social enterprise in the UK

Canada has a rich history of social enterprise, especially seen through the lens of Quebec’s social economy or the broader community economic development movement. Less well developed is a nationally scaled social enterprise and social finance movement, which has not had the benefit of supportive and comprehensive national public policy. In that sense, Canada trails behind other jurisdictions like the United States or the United Kingdom.

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I was very fortunate in April to have learned a lot about the UK’s experience when I travelled there to attend the 2010 Skoll World Forum. The forum coincided with the start of the UK election and, as it turned out, I was trapped in the UK for a second week due to the Icelandic ash cloud. Like my prolific UK-reporting colleagues Robin Cory and Al Etmanski, I had an unanticipated, intensive and policy-rich exposure to the UK scene.

A key benefit was connecting to UK social enterprise leader Ben Metz, who has just finished mapping the UK’s social economy. His report is a highly useful introduction and overview explicitly geared to facilitate outsiders drawing lessons. As Ben said in his recent Guardian blog, he wants to ensure people don’t get an “airbrushed account” of the UK experience.

Several pertinent impressions emerged for me:

• EARLY POLICY INTERVENTION WORKS: The UK SE community enjoyed nearly a decade of supportive public policy helping accelerate the development of social enterprises and their critical support systems; Ben’s historical map points to one early success: in 2002 many of the foundational ideas shaping this policy framework emerged from a process managed by the Department of Trade and Industry in which leading figures from the SE movement collaborated with government officials on eight policy working groups (from finance to procurement to legal to business training to evaluation and metrics). The resulting 81-page document, Social Enterprise: From Strategy to Success, is an insightful policy blueprint. The DTI/SE community process reminds me of the social innovation principle of “co-production,” in this case co-producing public policy.

• STRONG POLICY ADVOCACY IS PERMANENTLY REQUIRED: In the intervening period following the DTI exercise, the UK SE community has focused a lot on public policy. One important result was that the recent election boasted strong social enterprise content in the manifestos of both Labour and Conservative parties. The two support the creation of a social investment bank, with Conservatives calling it the Big Society Bank. Following the election, the Conservatives published more details on their social agenda (which is available via the Wellesley Institute.) As well, the new minister for civil society, Nick Hurd, says: “We are committed to bringing a clear vision to the sector that will mean charities, social enterprises and voluntary organisations are easier to run and not overwhelmed by interference and bureaucracy.” As welcome as these commitments are, the sector has cautioned government that there will need to be close co-operation to make it happen in an effective manner, using the sector’s knowledge and on-the-ground experience.

• POLICY INNOVATION NEEDS SUPPORT FROM ENGAGED FINANCE LEADERS: The social finance aspects of the social enterprise movement were greatly helped by the blue ribbon Social Investment Task Force called into being by then-chancellor Gordon Brown and headed up by Sir Ronald Cohen, the father of venture capital in the UK. In their first report in 2000, the Task Force made five important recommendations:
  1. A Community Investment Tax Credit.
  2. Community Development Venture Funds.
  3. Disclosure of individual bank lending activities in under-invested communities.
  4. Greater latitude and encouragement for charitable trusts and foundations to invest in community development.
  5. Support for Community Development Financial Institutions, including Community Loan Funds, Micro-loan Funds and Community Development Venture Funds.

   

  Three subsequent reports followed, including the final report published several weeks ago on the eve of the election. The swan song report reviewed the results of the initial recommendations but added three more:

  1. Create a Social Investment Bank (a recommendation from Sir Cohen Commission on Unclaimed Assets and an idea already in the policy mix, see above).
  2. Create new tools to deliver social change through financial instruments such as Social Impact Bonds (an exciting new way to finance social programming that focuses on prevention).
  3. Legislate a UK Community Investment Act like the CRA in the United States in order to generate a larger flow of mainstream capital into social finance serving disadvantaged areas. Why? Because, “since the call by the Task Force for voluntary disclosure of lending, some banks have improved their transparency, but the sector as a whole still does not systematically disclose lending.”)

Ben Metz is wise to admonish those of us outside the UK to critically evaluate the UK experience. But my big UK take-away is that if Canada’s social enterprise movement is to hit its stride, our practitioners have to step up their policy work. And that is the big opportunity of next week’s National Summit on a People-Centred Economy. I hope to see you there!

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Tim Draimin is the executive director of Social Innovation Generation (SiG) and Chair of CAUSEWAY.