It is helpful to consider some of the common characteristics that social enterprises display: A strong drive for financial autonomy A flexible, non-bureaucratic way of working A willingness to take risks and adapt to changing need A close understanding of and commitment to their client groups A commitment to staff development Re-investing profits in the social aims of the business or local community The ability to deliver on social objectives while delivering services
Social enterprises contribute to local regeneration in four ways (RTP & UWE 1999)*: Jobs and Training Goods and Services Re-cycling Income Capacity Building
Jobs and Training As regeneration areas have high levels of unemployment, much of it long-term, community enterprises' emphasis on employing local people is useful to partnerships seeking routes back into jobs for local residents.
Community enterprises' training is usually linked to a job on completion, so that it is particularly useful in areas where there is a degree of cynicism about training schemes, because people have been cycled through them more than once without finding a job.
It must be stressed, however, that community enterprises in a regeneration area will not create remotely enough jobs to make a major impact on local unemployment in the area on their own within the lifetime of a scheme - developing enterprises and helping them grow is very time consuming. But their ability to target those excluded from the conventional labour market, together with the contribution they can make to other regeneration objectives, make them a useful weapon in the regeneration armoury. They can be very effective in providing experience, skills and the confidence to enable residents to enter the conventional job market for the first time or after a long absence.
Goods and Services Regeneration areas often lack commercial facilities and services because of residents' low spending power. Community enterprises can potentially meet this need at affordable prices. Similarly they may be able to provide social and community services in ways that are responsive to local needs and priorities.
Re-cycling Income Poor areas tend to be caught in a downward spiral: residents' already low incomes are largely spent on goods and services 'imported' from elsewhere, reducing even further local incomes and job opportunities. Typically, even with the public money made available to provide public services and relieve disadvantage, a high proportion is spent on the salaries of professionals and others who live in more affluent areas. By employing local people to provide locally consumed local services, community enterprise can reverse the spiral. It may also be able to trade outside the disadvantaged area, increasing the income of its residents through 'exporting' to other areas.
Capacity Building Community enterprises are often initiated by a group of residents. So the process of working up their idea, training in business planning, forecasting and consultation increases the capacity of those involved to a much greater degree than if they were merely to access jobs as employees. However, local residents who are employees may also receive training which enhances their abilities. Other members of the community will be involved as directors, so capacity will be increased by the training and experience they obtain.
By using business solutions to achieve public good, the Government believes that social enterprises have a distinct and valuable role to play in helping create a strong, sustainable and socially inclusive economy. Successful social enterprises can play an important role in helping deliver on many of the Government's key policy objectives by:
Helping to drive up productivity and competitiveness Contributing to socially inclusive wealth creation Enabling individuals and communities to work towards regenerating their local neighbourhoods
Showing new ways to deliver public services; and helping to develop an inclusive society and active citizenship
The Government’s vision is of dynamic and sustainable social enterprise strengthening an inclusive and growing economy. In July 2002, the Government launched a three year strategy, Social Enterprise: a strategy for success, setting out a programme of action to work towards this vision. The strategy identifies the issues that directly contribute to the success of the sector and seeks to remove the barriers that prevent its growth and development. Working with key partners, the Government aims to achieve three key outcomes:
create an enabling environment for social enterprise
make social enterprises better businesses establish the value of social enterprise
Nigel Griffiths MP, Minister for Small Business and Construction, took on responsibility for Social Enterprise in June 2003 as part of wider changes to ministerial responsibilities within DTI following the reshuffle. Mr Griffiths was appointed as Minister for Small Business in June 2001. DTI’s Social Enterprise Unit (SEnU)* has responsibility for carrying forward the strategy.
The Policy Action Team 3 (PAT3)* recommended that the Small Business Service (SBS) should extend its service to include social enterprises. Business Link has been experimenting (using Phoenix and EQUAL funding) with different ways of identifying and supporting social enterprise. Initial evidence on the Business Link database demonstrated a lack of acceptance that a problem/need existed although this has now changed (HM Treasury 1999).
There is a sizeable body of data available on charities and even the ‘social economy’ in its widest sense. The data-mapping group established by the DTI’s SEnU concluded that it was difficult to determine the number - or economic contribution - of social enterprises, as there have not been any comprehensive studies to date. They concluded that further, more carefully defined, research is needed to map fully the social enterprise sector. It also recommended that guidance should be issued for use in future mapping exercises o help establish a reliable body of information. The absence of such information currently restricts the extent to which policy makers feel they have robust evidence about the impact of the sector, and may therefore place an undesirable constraint on the role of social enterprise in service delivery.
Indeed, governments, including that of the UK, have formally signed up in their National Action Plans to bringing forward measures both for the promotion of the social economy and local development initiatives. Commenting on these, the EU Commission asserts that:
“The social economy and the activities oriented to meet the needs unsatisfied by the market can lead to the development of a new sense of entrepreneurship particularly valuable for economic and social development at the local level. This sense of entrepreneurship is closer to the aspirations and values of people that do not seek profit making but rather the development of socially useful activities or jobs. These forms of entrepreneurship have a useful role in promoting social cohesion and economic local (sic) performance".
Communities characterised by deprivation and disadvantage do not offer the same legitimate opportunities and in many cases exclude the young people from the legitimate labour market (Lavitt & Venkatesh 2000). Given the high levels of unemployment and lack of opportunity it is not surprising that drugs and associated illegal activity have risen in prominence. The Office of National Statistics calculates that the value of the UK drugs market is between £3.9 and £8.5 billion a year.
In the last 20 years this rise in drug prominence has only been possible by gangs taking an economic view - i.e. driven by profits from drugs.
Drug Street value per Kg (£x1000)
Amphetamine Cannabis Cocaine Crack Heroin
9 40
117 71 63
Fig. 3.6 Street value of drugs Source: The Job (2005)
The gangs which populate our cities fulfil the needs of young people not provided by legitimate agencies. Lavitt & Venkatesh (2000) note that ‘soldiers’ earn relatively low levels of income but are motivated by future potential further up hierarchy. Contrary to ‘popular’ belief the associated gang wars are not cost effective for those involved given loss of life (concentration of dealer deaths during wars), loss of profit (violence alienates customers), drop 20-30% of price and quantity sold.
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*Refer reference pages 45 - 46
*Refer reference pages 45 - 46
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