A new report from the Auditor General for Wales suggests that the public sector has missed out on opportunities to support and grow the social enterprise sector in Wales. The report suggests that “Social Enterprises can provide important services, but most local authorities lack a coherent strategy and are not working collaboratively to help support their growth and development.”
On first reading, the report seems to paint a bleak picture of how local authorities interact with and support social enterprises within their communities. Although highlighting some areas of good practice it seems that most local authorities don’t map the social enterprises within their area and therefore don’t understand the potential of this supply chain -a supply chain that ensures that profits are kept locally and reinvested for the good of the community. It also highlights that very few local authorities have a social enterprise strategy or provide specific financial support beyond their generic business grants.
The report highlights the benefits that social enterprises can offer in the fight to tackle poverty in our communities. It notes that social enterprises often offer services in disadvantaged areas that would otherwise not be available; they create new employment opportunities and contribute to economic development in deprived communities, and often directly target their work to help disadvantaged people. This is more important than ever in the face of financial pressures facing local authorities and the cost-of-living crisis facing our communities.
Many local authorities seem to have a reactive approach to working with social enterprises as opposed to proactively looking for opportunities. Very few authorities have specific staff available to support social enterprises and some of the interviewees said they were concerned about the potential risk of working with social enterprises, particularly if they were quite small.
This is all very challenging if we want to see the social enterprise sector grow even further in Wales. However, we need to understand the context of recent history. Prior to 2010 and the period of austerity far more local authorities had dedicated officers who supported local social enterprises, many of these officers also co-ordinated local social enterprise networks and provided access to small amounts of funding.
We now have a great opportunity in the form of the Shared Prosperity Fund (SPF). Local authorities once again have direct access to resources to help them stimulate local economic development and we at Cwmpas believe that social enterprises, employee ownership and community led housing should be at the heart of this. With SPF we can rebuild the local eco system to support the sector in every local authority in Wales. We can help train and support local authority colleagues on the importance of locally owned and anchored businesses that reinvest their profits. We can help to reinvigorate local networks and assess the supply chain potential. There is an opportunity to help local authorities look at current spend and the potential for using that spend to support local social enterprises. We can support authorities to look at strategy development, tying this in the national Social Enterprise Vision and Action Plan that was developed by all the sector support agencies in 2020.
Cwmpas has been supporting social enterprise, co-ops and employee-owned businesses across Wales for over 40 years. Originally Cwmpas team members were funded by and based within local authorities, linking in with economic development staff on the ground and proactively working with communities to help them identify and communicate local problems, and more importantly formulate solutions. These local collaborations more than a quarter of a century ago led to the formation of strong social enterprises, the majority of whom are still trading today.
Social enterprises demonstrate that it is possible to do business better. They illustrate how to be innovative and entrepreneurial whilst still being socially responsible and they are constantly raising the bar of what is considered good practice in business and delivery to the public sector.
The opportunity to work with social enterprises and to maximise the impact of public sector spend is still there. SPF gives us a real opportunity to learn from the past, look to the future and respond positively to the findings of the Wales Audit Report.
Read the Audit Wales report ‘A missed opportunity – Social Enterprises’ here https://www.audit.wales/publication/missed-opportunity-social-enterprises